Foreign investors in Nigeria are dumping more of their shares in the country. The Nigerian Stock Market suffered foreign investment outflows of N41bn in April, compared to N30.20bn in the previous month. This means that they have withdrawn N166bn in four months
Oscar Onyema, NSE Boss
A Breakdown of The Movement
Data obtained from the Nigerian Stock Exchange on Thursday showed that that a total of N166.03bn was pulled out of the Nigerian Stock Exchange in the first four months of the year.
While total transactions, whether domestic or foreign on the Nigerian Stock Exchange is put at N148.91bn (about $485.9m) in April, total foreign transactions increased by 37.13 per cent from N56.09bn in March 2019 to N76.92bn in April 2019, according to the NSE’s Domestic and Foreign Portfolio Investment Report for April.
Nigerian Stock Market Analysis For The Month of March
Total foreign outflows also increased by 38.34 per cent from N30.20bn to N41.78bn whilst foreign inflows increased by 35.76 per cent from N25.89bn to N35.15bn between March and April 2019, the NSE said,
The NSE said the total value of transactions executed by foreign investors outperformed those executed by domestic investors by four per cent. Foreign portfolio investment outflow includes sales transactions or liquidation of portfolio investments through the stock market, while the FPI inflow includes purchase transactions on the NSE (equities only).
The report showed that the value of the domestic transactions executed by institutional investors’ outperformed retail investors by 18 per cent in April.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Who says giving Nigerian notorious okada riding business model a new repackaged outlook cannot be a viable business model?
Nigerian Lagos-based on-demand motorcycle taxi app Gokada has proven to be up to the game. The startup has just raised US$5.3 million in Series A funding with a plan to expand the number of its motorbikes and available drivers, increase its daily ride numbers as well as grow its team.
Gokada Is Just A Year And Three Months Old
Although Nigerian commercial city, Lagos, has banned motorcycles from plying its major highways, Gokada, defied this rule and formed itself into a more refined business model in February 2018, with a neat, safety-driven business model and more trained drivers.
Customers who need rides in the heavily congested commercial city and the smallest Nigerian state in terms of land mass with a population of 17 million people, can just download Gokada app on their smartphones, or visit Gokada’s website and input their locations and destinations and they would be matched with an available Gokada motorbike. The startup did all that magic in just a year and three months. It secured close to 1,000 bikes and completed around 5,000 rides across Lagos’ Mainland each day, with rides approaching one million in total.
The latest funding is part of the startup’s plan of expanding. Gokada is trying to play a safe game with its highly dangerous business model that demands well-trained drivers.
Govenment’s rule against the use of motorbikes on the highways of Nigeria’s most populous city is so tight. Recently, the Lagos State Task Force on Environmental Sanitation and Special Offences impounded 115 motorcycles, including 22 branded commercial motorcycles, including ‘Gokada’ and its competitor ‘Maxokada’, for violating the state road traffic laws.
The new funding was mostly led by Rise Capital with Adventure Capital, First MidWest Group, IC Global Partners and other several local investors joining. The impact of this round of investment is expected to be felt in the areas of its fleet of drivers, who are sometimes thousands of kilometers away from the location of the hailers.
The startup would also target an increase in the number of its daily rides. At least a 10% increase won’t be bad. In the long run, it is also looking at acquiring more local tech talent who would have to do some jobs about the highly faulty application upon which the startup runs its business. It also intends to explore new verticals for business growth, and provide more value added services to drivers.
Gokada’s biggest competitor is Maxokada which is a bit older, having been founded in 2015, although its initial focus was on-demand delivery where order or packages are delivered in no more than 3 hours. Maxokada may have to fight to retain its market share with its higher pricing model compared to Gokada which is relatively cheaper, although it has better app functionality, and has nearer drivers.
“Our green Gokada motorcycles have become a regular feature of Lagos’ roads in the 14 months since our official launch. Gokada was built with the intention of becoming the future of two-wheel transport in West Africa, and we are fast becoming the go-to platform to hail a motorcycle ride in Lagos. Today’s announcement allows us to accelerate our growth projections significantly, as we continue to grow our market share and look to introduce more product features and services,” said Fahim Saleh, co-founder and co-CEO of Gokada.
The Startup Did Not Take The New Funding For Free Though
With the largest investment from Rise Capital, Mr Ayodeji Adewunmi, director at Rise Capital and the co-founder and former CEO of Jobberman, would be displacing former CEO Deji Oduntan. Adewunmi would be taking over as Gokada’s Co-CEO, a role previously performed by Deji Oduntan.
“It is an incredible time to be joining Gokada on this journey to transform transportation in Nigeria and the rest of Africa. I am truly excited about the promise of Gokada becoming the operating system of how cities function optimally and efficiently across Africa. There is no doubt in my mind that this will become one of the most important companies in Africa,” Adewumni said.
Nazar Yasin, founder and managing partner at Rise Capital, said Gokada’s rapid entry into Lagos’ transport market had been transformative.
“We have noticed that some markets like Nigeria and Indonesia, which both have large populations and inadequate road infrastructure, are more likely to be dominated by motorcycle-hailing companies rather than traditional car-hailing players, and Gokada’s relentless focus on product, customer service, and safety has enabled them to take advantage of this dynamic and produce some truly impressive growth metrics. They are reshaping the tech-enabled transport market in Lagos, and we are excited to be partnering with them as they scale,” he said.
In the meantime, this is a big win for the young Nigerian startup. However, there is still so much work to be done to convince the government that it is worthy to be spared from the long-standing ban against local motorbikes on Lagos’ major roads. This would be a highly defining moment in its next ten years’ future as it looks to build a sustainable business. With high emphasis on safety of both its users and other road users and its appreciably cheap fares, the startup would hope to convince Lagos residents that it is a good alternative to the reforming Lagos transport system and the burning agony of spending several hours on Lagos traffic, in a city that is the smallest in Nigeria and that actually would take about three hours to go round in a mini van with an average speed limit.
According to Nigeria Watch Database, Traffic accidents account for the most fatalities in Nigeria. In 2015, FRSC stated that 5440 people died as a result of car crashes.
(c) Proshare Nigeria, 2017
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The Chinese are never leaving Nigeria soon. Aside from the loans the Asian country is throwing into Nigeria, the President, China Chambers of Commerce in Nigeria, Mr Ye Shuijin has just said there are now more than 160 Chinese companies operating in Nigeria with more than 200, 000 Nigerian workers, and the quantum of investment in the Nigerian economy by these Chinese companies is now pegged at $20bn, representing about 5% of Nigeria’s current Gross Domestic Product (GDP).
This should constitute the 8th largest contributor to Nigeria’s GDP after Agriculture 21.65%; Trade 17.06%; Information & Communication 12.41%; Manufacturing 9.91%; Mining & Quarrying 9.67%; Oil 9.61%; Real Estate Services 5.63%.
Areas of Chinese Investment In Africa, 2018
More Chinese Loans, More Debt
The more investment, the more the loan. Nigerian Federal Government recently announced plans to borrow another loan from China of up to $1 billion. The credit facility which will be provided by the China-Exim Bankwill increase Nigeria’s escalating debt profile to N360 billion.
Nigerian Debt Management Office (DMO) record last year showed that over $73.2 billion were borrowed by the Nigerian government as at June 2018.
It doesn’t appear the loan is finishing soon. Mr. Ye Suijin said apart from national loans, Chinese companies in Nigeria are owed several sums of money for contracts already completed.
“The government still owe us for the Murtala Muhammed expressway project in Abuja which was completed in 2010. In 2015, we faced payment issues because of the recession, but what we did was to ensure the payment of our members of staff, not only CGC but all our chamber’s members. Many Chinese companies had to bring in money from China to pay their workers. The recession almost wiped off Chinese companies in Nigeria. At the end of 2016, the government commenced payment, but we still have many challenges,”he said.
The allegation is that the Chinese prisoners are often shipped into the country as expatriates while Nigerian Immigration Service (NIS) complete the remaining deal of allowing them free entry. The Chinese Chambers of Commerce President has since denied this report saying it was not possible to do such a thing, and that the Chinese embassy monitored the Chinese companies. However, there still remains some clouds about how many Chinese workers are really in Nigeria.
Chinese Ambassador to Nigeria, Zhou Pingjian, in a 2017 interview didn’t seem to know the exact number of Chinese in Nigeria.
‘‘We don’t have the registration system. According to our assessment, I think there are 40,000; some say there are 50,000 Chinese compatriots here. I got it from the news, even for the Spring Festival, that a lot of Chinese are going back home. And they stay in Guangzhou and other places in China, maybe some similar number of Nigerians are doing business in Chin,’’ he said.
As seen in Figure 4 above, Chinese investment has increased globally, and Africa is the third-largest destination for Chinese investment behind Asia and Europe
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
More and more startups in Africa are finding more funding for their businesses. The latest in town is the Cairo-based foodtech startup, Yumamia, which has raised $1.5 million in its Pre-Series A funding round.
Saudi Arabia-based boutique consulting firm, Pure Consulting, is providing the funding for the startup. The funding round would take Yumamia’s total investment raised so far to $2.8 million. This would make it one of the best-funded startups in Egypt.
The startup has already decided on what it is going to do with its latest funding: expand to Saudi by launching in Riyadh later this year and accelerate growth in Egypt.
Yumamia Food At A Glance
The startup was founded in 2014 by Belal El Borno. What Yumamia does is to deliver junk-free (wholesome) food prepared by professional chefs using premium ingredients and top hygiene standards to customers in Cairo. It has also recently expanded into corporate catering, with an additional business-to-business (B2B) solution.
Yumamia’s Strategies
To make the startup stand out, it partners with Food & Beverages outlets to assist them in making money out of their underutilized resources. They do this by outsourcing their entire food preparation operations.
Yumamia relies on a franchise-like model that allows these F&B outlets to operate using existing resources while following operating rules and recipes of Yumamia.
Yumamia takes the food and sells it to companies through its corporate catering solutions.
With its ordering platform for offices, employees of companies (that partner with Yumamia) may order food (lunch) on a daily basis. The platform comes with a dashboard for HR/Operations to manage the invoices.
Yumamia charges the companies who can either provide the food for free to their employees or charge them perhaps by deducting the monthly invoices from their payroll.
Yumamia also has a food delivery platform for consumers (B2C), although over eighty percent (80%) of its revenue comes from its B2B platform.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The South African government helps South African entrepreneurs and business owners through numerous business funding projects. The National Empowerment Fund is one of them.
The National Empowerment Fund which derives its powers from the National Empowerment Fund Act of 1998 is to provide black South African entrepreneurs with financial and non-financial knowledge and consultation services which are important in helping them to grow their businesses.
The National Empowerment Fund In Summary
The Fund helps South African business owners and startups find the right equity investment for their businesses, as well as offer them adequate advisory services on how they may effectively manage their businesses or their employees.
The Empowerment Fund is also a business fund that can help South African entrepreneurs make better forecasts about how the state of the South African and global economies can affect their businesses.
In summary, what the National Empowerment Fund does is to enhance and empower the various existing South African startups and businesses.
Services rendered by the NEF are structured into 4 business operational areas, namely Advisory Services; Corporate Transformation Services; Market Making Services; Group and Entrepreneurial Schemes.
The Startup Areas That Attract The National Empowerment Funding:
NEF offers its financial and non-financial services across different business areas, especially as it concerns the popular businesses carried out by most South African black community members.
These areas include businesses related to:
Food-related
Transportation
Energy
Food and Beverages
Information and Computer Technology
Financial Services
Engineering
Energy
Construction and Materials
Chemicals and Pharmaceuticals
Agro-Processing
Wood and Paper
Industry Manufacturing
Media
Mining Services
Motor Industry
Printing Services
Property Retail
Textile Industry Services
Transportation Tourism and Entertainment
Others
Startups In South Africa Can Get Funding Under The National Empowerment Fund Using Any of These Five Schemes
Startups which are just planning or starting off their ventures may use this scheme. For entrepreneurs who wish to make equity investment or offer expansion capital support to startups, they may find new or existing startups to invest in under this scheme.
What the iMbewu Fund does is to provide financial support either through loans, purchase of equity in these startups or existing business enterprises. Funds that can be procured under the iMbewu Fund range from R250, 000 as the minimum amount and R10 million as the maximum amount.
What the uMnotho Fund does is to help black business owners in South Africa have more access to Black Economic Empowerment (BEE) capital, which is meant to support black businesses in South Africa.
Funds may be procured under the uMnotho Fund for acquisition of other businesses; to aid expansion projects of most businesses; to assist startups and black-owned businesses to have more funds to invest in their capital markets fund operations as well as for the running of their warehouses.
Hence, for instance, black entrepreneurs who are starting new businesses, expanding their existing enterprises, or Black Economic Empowerment (BEE) enterprises that are in the process of listing on the Johannesburg Stock Exchange may get funding under this scheme.
This funding is meant for cooperative societies in the rural communities of South Africa which can show evidence that they are running sustainable businesses.
Hence, the fund helps black South African communities to engage in large-scale economic transactions. The aid or funding here is extended to the acquisition of more businesses, expansion of businesses, financing of money-consuming capital projects , whether for New Ventures, Start-up or Greenfields. It can give for as low as R1 million funding to this group of businesses. The highest available fund is R50 million.
South African government here focuses on projects that promoteindustrial development. It does this through the Department of Trade Industries National Industrial Policy Framework. The fund is also dependent on the report by the Industrial Policy Action Plans (IPAP) of the South African government, coupled with the government’s growth plan strategy.
Startups in South Africa interested in tourism may go through this fund. In June 2018 the Department of Tourism (NDT) signed an agreement with the NEF to establish the Tourism Transformation Fund (TTF) which focuses exclusively on the transformation of the South African tourism sector.
According to this agreement the NDT will transfer a total of R120 million to the NEF over a 3-year period to be applied as grant funding for the benefit of qualifying enterprises that meet the funding eligibility criteria as set out by the two institutions. To date, the NDT has transferred a total of R80 million towards the TTF.
The NEF finances the loan and shareholder loan portions of the transactions and NDT funds are applied as grant funding through the TTF. The fund provides a maximum grant of R5 million or 30% of the total project funding requirement to each eligible transaction.
The Best Way To Apply For The National Empowerment Fund
To secure the support of the NEF for your startups in South Africa:
Obtain and fill the NEF application form. The aim of this is to enable the officials to go through your business case and make the necessary assessments concerning the NEF criteria.
Work on your startup’s business proposal or plan. This should contain certain comprehensive data that test or explain the commercial viability and the financial status of your business. The NEF application form is usually equipped with simple business plan guidelines that will provide you with necessary information concerning the vital topics and sections that you should cover before submitting your business proposal.
Submit your business application form to the NEF.
The Fund and its partner agencies, such as South African Department of Tourism for the Tourism Transformation Fund, will vet your application and then make approval and order funds to be released to help you proceed with the next phase of your business.
Checklists of Document and Information For NEF Funding
NEF application form
Deviant form from the available company/business members confirming the acknowledgment of the provided NEF application form details Three years.
Audited financial records of the business transactions.
Business projections for five years.
Current management accounts.
Applicant personal statements that include both assets and liabilities of all the current company members that are inclusive of the married members with their spouses.
Business bank statements (past 12 months).
Both certificate and Identification cards (ID) copies of all the business members.
CK 1/ CK 2.
CM1 attached with memorandum and articles of association.
Franchisers detailed profile if available .
In-depth information on why your business is on sale .
Sales agreement (where applicable) .
The CV of Principal Applicant .
Proof of residence through Fica compliance .
Historical financial records of business-related franchisers .
Information concerning the lease agreement pertaining to the new company
NEF Contact Information
Physical Address:
187 Rivonia Road,
Morningside, Sandton, 2076
Postal Address P.O. Box 31,
Melrose Arch, Melrose North, 2076
The dti call center: 0861 843 384 Tel: 011 305 8000 Fax: 011 305 8001 General inquiries: Email: info@nefcorp.co.za
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
SMEs in Kenya now have access to new loan facilities without collateral. About five Kenyan commercial banks are now backed by the Central Bank of Kenya to provide loan facilities targeting small businesses.
Under The New Loan Structure (Known as ”Stawi”)
Micro, small and medium enterprises (MSMEs) will be allowed to access loans without collateral ranging between Sh30,000 ($297) and Sh250,000 ($2500) from the new loan product dubbed “Stawi”.
The loans will be accessed and processed through mobile phones.
Unlike other mobile loans like that issued by Branch, you can request for a second loan if you have managed to pay 80% of the first loan you owe Stawi.
Interest And Repayment Period
The loans have a repayment period of between one year and 12 months and an interest of nine per cent (9%) per year.
Other charges to be collected upon disbursement are facility fees of four per cent, insurance cost of 0.7 per cent and excise duty at 20 per cent of the facility fee
“We are excited to work with the five banks to minimise the complexity of developing new and more accessible loan offerings as they bring much-needed capital to this underserved yet vital segment of the market,” CBK governor, Patrick Njoroge, said during the launch of the product at Nairobi’s Gikomba Market.
The scheme will also see good borrowers rewarded with cash based on their borrowing profiles.
“Small and mid-size enterprises are the lifeblood of any economy, but many have struggled to secure the necessary financing to continue operations in the current economic climate,” said Ngoroge
The latest intervention is coming after private sector credit grew just 3.4 per cent in the year to February In Kenya, well behind the Central Bank of Kenya’s target rate of 12–15 per cent that is needed to support economic development.
Kenyan borrowers were recently spared a rise in the cost of loans after the CBK retained its benchmark rate at 9.0 per cent amid mounting defaults and reduced appetite for lending to individuals and small enterprises by commercial banks.
How to Apply for Stawi Loan?
To apply for and get Stawi Loan, download the Stawi Mobile application on your phone(play storelinks will be shared when it goes live in Mid June 2019 ).
After downloading the mobile app, register with an agent and create your wallet and request for a loan. Your loan will be issued via your wallet.
To be among the 3500 traders who will benefit from the first round of Stawi loan that will be issued to SMEs on pilot test, register with an agent through any of the listed banks above.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
That the Johannesburg Stock Exchange is the largest in Africa doesn’t mean it says one thing and means the other. Recent data from the Bank of America Merrill Lynch Global Research shows that more foreigners own shares on the Johannesburg Stock Exchange than South Africans themselves. To be precise, about 52% of the shares on the Johannesburg Stock Exchange are owned by foreigners.
Again, latest numbers from the JSE indicate that foreigners resell most of their South African shares. The amount resold from the start of April to the first week of May, 2019 stood at R5 billion. In fact, foreigners resold about R3 billion shares in the three days before the national and provincial elections alone.
What Areas The Foreigners Are Going To Most
Mining
Some 62% of mining shares on the JSE are now in foreign hands, and overseas investors have increased their mining holdings over the past year, particularly in platinum and gold companies, except for Harmony.
Financial And Industrial Shares
The percentage of foreigners who go for local financial shares is 37% and industrial is 54%.
Foreigners also bought Clicks shares — but sold Woolworths, Massmart, Foschini, Truworths, Dis-Chem, Shoprite and Spar.
Foreigners were also net buyers of of Reunert and Reinet, the property shares Resilient and Intu, and added to holdings in Capitec.
Telecom and Retail Shares
Foreigners have also been selling their stakes in South African-focused companies over the past year, particularly telecom and retail shares.
The report shows that foreign investors sold Vodacom and MTN, but were net buyers of Telkom in the past year.
Source: BofA Merrill Lynch South Africa Strategy
The Top Foreign-owned Stocks
The top five foreign-owned stocks are now Richemont, BHP, Gold Fields, Harmony, and Anglo Gold.
The domestic names foreigners are going after are Clicks, Lewis, Tiger Brands, Discovery and Telkom which have the highest foreign holdings.
Foreign holdings in Naspers — which represents a fifth of the Stock Exchange — has fallen from 65% in 2016 to 62%.
The report found that if shares listed on other exchanges — like BHP Billiton and Richemont — are excluded, foreign investors owned only 46% of domestic shares, down from 48% last year.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The trade war between the US and China means that Huawei Technologies Co. Ltd, a Chinese multinational telecommunications equipment and consumer electronics manufacturer, headquartered in Shenzhen, Guangdong, China is the latest victim.
Google has just announced it has cut off Huawei’s Android licence, a move which would have serious implications for the manufacturer’s smartphone business.
Global smartphone market share
“We are complying with the order and reviewing the implications. For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices,”Google said in a statement which attributes the revocation of the licence to compliance with US government policy
What This Means
The short term implication of this is that Huawei will lose access to Android updates, which means that existing Huawei smartphones will not be able to receive any official Android OS updates going forward.
Huawei will only be able to use the open-source version of Android and will lose access to proprietary apps and services from Google.
While the Chinese manufacturer can still use the Android Open Source Project (AOSP) licence to develop its software, this licence however, does not encompass applications such as Gmail, YouTube, and the Chrome browser.
These applications require a commercial agreement with Google and are available to download through the Google Play Store. These are what Google has blocked.
Intel, Others Follow Suit With Google
Among the four chipmakers, Intel is Huawei’s primary supplier of chips used in its data centers.
Additionally, Intel also provides processors for Huawei’s Matebook series of laptops.
Qualcomm sells it Snapdragon SoCs for various entry-level devices like the Honor 8C as well as some network chips.
Qualcom also licenses aptX codec for Bluetooth audio to Huawei.
Meanwhile, Xilinx provides programmable chips for networking while Broadcom supplies packet switching chips for telecom equipment.
In all, there are more than 30 companies in the U.S. considered as “core suppliers” by the company, and all of them are likely to follow the same route.
Huawei would lose all that bar for green Android with this new development
What This Means For African Businesses
The implication of this move by Google is that African businesses and other western markets using Huawei products could lose access to YouTube, Gmail, Google Maps, Chrome, and other popular apps on their Android smartphones, which are the proprietary rights of Google. This could be devastating for users in the Western markets where Huawei operates.
However, it is still uncertain how Huawei adjust its platform to tackle this the suspension of its Android licence.
Huawei may opt to migrate its devices to its own proprietary operating system, which it confirmed it has been developing in case it loses access to Android.
However, moving to this new operating system would not affect China so much, because most Google applications are banned are already banned there and users have since adopted Chinese equivalents.
Huawei has greatly expanded its presence in the African market, with its devices proving extremely popular due to their lower prices and solid design.
However, regardless of whether Huawei decides to migrate to its backup OS or stay with an open-source version of Android, its Android licence suspension will have a significant impact on Huawei users in South Africa.
This termination may give rise to serious trust issues against the Chinese companies. American spy chiefs in a classified info hinted that “The Chinese government and Communist party pose the greatest long-term threat to US economic and national security. It’s important that US companies, universities, and trade organizations understand fully that threat.”
“Huawei has made substantial contributions to the development and growth of Android around the world. As one of Android’s key global partners, we have worked closely with their open-source platform to develop an ecosystem that has benefitted both users and the industry.
Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally.
We will continue to build a safe and sustainable software ecosystem, in order to provide the best experience for all users globally.”
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
Fast technological revolution may mean that the global truck and shipping industry may soon become one of the most valuable online business models in the world.
This would mean that instead of struggling truck drivers who normally spend countless hours on the road making deliveries, and most times charging less, a new generation of truck drivers would mount the roads and steer the best bargain out of their searing sufferings.
Key Insights Into The Global Business of Trucking
The total global revenue for the trucking industry is $1.2 trillion, according to McKinsey & Co. Of this number, $260 billion, representing 20% of the global market share is generated in the US trucking industry.
Trucks deliver two-thirds of all products shipped each year.
The business is highly fragmented, meaning that many players fight for the available market share although publicly traded transportation industry leaders still dwarf the disruptors. C.H. Robinson and XPO Logistics, for instance, maintains between $15 billion and $20 billion in annual sales; UPS has close to $72 billion in revenue.
In a bid to reduce the number of times third party truck drivers run empty trucks, a lot of entrepreneurs and investors have leaped into the market with technology-driven solutions.
A Look Into The Changing World Of Trucking and How Some Start-ups Are Offering a Wider Range of Transportation Services
With the Convoy App, trucks are matched with any available shipments. Drivers can automatically bid for loads, submit their bills and get paid quickly. Shippers on their own can post a job, get real-time quotes and track their shipments.
Convoy was founded by Dan Lewis and Goodale, both former employees of Amazon, where they had a close-up involvement with a massive logistical task. The startup has since reached a $1-billion-plus valuation.
Barely five years old, Convoy has up to 500 employees, raised $265 million and reached a valuation of more than $1 billion. Its investors include Alphabet’s late-stage venture arm CapitalG, Amazon founder Jeff Bezos and venture capital firm Greylock Partners.
“Trucking is the background noise of America. Companies like Unilever and Starbucks are moving thousands of shipments every day. We’re trying to help trucking companies and truck drivers run their businesses more efficiently.”
Lewis said that Convoy might have succeeded because its timing was just right, when smartphones were just starting to gain widespread use among truck drivers.
To Reid Hoffman, a partner at Greylock and co-founder of LinkedIn:
“Convoy’s mission starts with getting to a world with zero waste, addressing the 40% of miles driven without a load.’’
The startup is based in San Francisco. It says it is a digital-first freight forwarder. Apart from trucking, the company also manages sea, air and rail delivery and customs processing, using what it calls its “operating system for global trade.”
With over 10,000 clients and suppliers in 110 countries, 1,100 employees and reported revenue of $441 million in 2018, Flexport has raised more than $1.3 billion in several rounds, including a $1 billion round in February led by the SoftBank Vision Fund, that was backed by Saudi Arabia and Dubai. The company’s valuation was reported at $3.2 billion in its last fundraising round.
“We’re doing this by combining technology, access to physical logistics infrastructure, and industry expertise to build a product that allows our customers to plan, move and even finance their cargo more efficiently,” said Flexport founder and CEO Ryan Petersen.
Flexport is Already Quelling the Trade War
With a highly flexible focus, Flexport is exploiting the tension between China and the US over trade relations. Immediately President Donald Trump announced new tariffs on imports from China, Flexport’s cloud-based software and data analytics platform allowed the company to immediately identify customers who would be affected and begin working with them to mitigate losses.
As an example, the startup required an industrial materials client based in Hong Kong to identify cargoes that would be hit by the new tariffs based on the commodity codes. Flexport prioritized those shipments for loading and rerouting just to avoid the tariffs.
The recently introduced OceanMatch, helps customers to identify available space on ocean-bound containers, which ship on average just two-thirds full.
These Startups Are Already Squaring Up Against Industry Giants
Apart from Convoy and Flexport, major industry players such as Uber and Amazon are or have already invaded the market. Uber launched Uber Freight in 2017 and expanded into Europe in March 2019. The company stated in its pre-IPO filing, that its revenues from Uber Freight reached $373 million. Amazon also has confirmed that it is testing the freight-forwarding market.
Convoy’s Lewis says he is not worried.
“It’s a big market. There’s plenty of space for innovation,” he said
Bottom Line
African entrepreneurs and startups may have opportunities here.
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The rush after sources of taxation is not yet over for the Nigerian government. Next on the line of taxation is online transactions. And Nigerian Federal Inland Revenue Service (FIRS), an agency of government responsible for the collection of taxes in Nigeria is not going to do so by deploring tax police after physical businesses. It is going to come by way of demanding Nigerian banks to put a Value-Added Tax (VAT) on every online transaction they are processing on behalf of their customers.
FIRS Boss, Babatunde Fowler
“Not that it is something new; it actually should be in existence. “We will certainly follow up to make sure that every VAT that is due to be collected is collected. Soon, we will ask banks to impose VAT on online transactions for purchases of goods and services,”the Chairman of the agency, Mr Babatunde Fowler said.
Nigeria’s Revenue History Over The Years
‘’We Are Going After Everybody’’
Hard day for online purchasers in Nigeria. Expect an extra deduction each time you purchase goods or services online, local or international.
The Nigerian agency has further explained that it is hustling hard to meet its N8 trillion revenue target for 2019. And it doesn’t stop with online purchasers.
The FIRS also seriously wants to increase Nigeria’s current tax population to 45 million. To do that, it would be relying on multiple information sources, Mr Fowler said. And that would include invading the country’s Bank Verification Number database and other related agencies with relevant information.
“We are going after everybody. I am sure you have heard that we have placed lien on some accounts of defaulters that have a billion naira turnover annually. So certainly, we are not leaving anyone out of the tax net,’’ he said.
Voluntary Asset and Income Declaration Scheme (Nigeria’s Tax Amnesty Programme was launched in 2017) Is Going After Companies.
The programme gave tax defaulters in Nigeria a one-year period of grace to declare and settle their unpaid taxes. This appears to be a hard time ahead for most companies in Nigeria.
Most taxpayers are insisting that the scheme was just designed to eliminate them from business. Mr. Fowler said “administrative error” should take the blame arising from the huge number of accounts involved.
“Well, there is certainly one or two instances where we made administrative error, but when you are looking at over 50,000 accounts. There is a tendency that sometimes an error might be made. For those that we made errors on, I wrote them personally apologising and of course we lifted the lien on their accounts,” he said.
External Debt in Nigeria averaged 9263.57 USD Million from 2008 until 2018, reaching an all time high of 29591.68 USD Million in the third quarter of 2018 and a record low of 3627.50 USD Million in the first quarter of 2009.
Compare the debt profile against Nigeria’s revenue
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
