As some South Africans go up in arms against African nationals living in that country, the energy is being felt on the Johannesburg Stock Exchange, Africa’s largest stock exchange. 

Here Is All You Need To Know

• MTN Group Ltd., Africa’s largest mobile phone operator, fell as much as 2%, after the company closed its offices in Nigeria following attacks on its premises in three cities. 
• Shoprite Holdings Ltd., Africa ’s largest food retailer, dropped after its stores were attacked in Lagos. 
• The benchmark South African index was 0.2% higher as of 2:27 p.m. after climbing as much as 0.7%. The MSCI Emerging Marketz Index rose 1.5%.

“It’s exactly the reason why local retailers and stocks like MTN who have African exposure are losing ground today,” said Henre Herselman, a derivatives trader at Johannesburg-based Anchor Private Clients, which oversees 38 billion rand ($2.6 billion) for clients. 

“I have seen several announcements from companies stating they have closed shops out of a fear a retaliation.”

Muhammadu Buhari✔@MBuhari I am sending a Special Envoy to President Ramaphosa to share our deep concern about the security of Nigerian lives and property in South Africa, and to ensure that the South African Government is doing everything within its power in this regard.

4:38 PM — Sep 3, 2019

Attacks broke out in Johannesburg, South Africa on Sunday and saw the destruction of more than 50 shops and business premises mainly owned by Africans from countries in the rest of the continent. Cars and properties were torched and widespread looting took place. The violence against African nationals may be a reaction to extra competition for jobs and services in Africa’s most-industrialized economy.

”From footage I’ve seen, it most definitely will hit Shoprite hard because it goes beyond lost sales, but also cost of repairs and restoring the damage,” said Nolwandle Mthombeni, an analyst at Mergence Investment Managers in Cape Town. “I don’t think this is a permanent deterrent from expanding into rest of continent, but it does mean any short term plans may be pushed out till the attacks are well in the rear-view.”

Source: Bloomberg

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

Facebook: https://web.facebook.com/Afrikanheroes/

As part of efforts aimed at restoring confidence after a devastating xenophobic attacks that led to destruction of business outlets across over four South African cities, the South African government has kick started a campaign to seek the understanding of the business community aimed at providing assurances, and calming frayed nerves. This is coming against the calls by business leaders urging the government and the ruling African National Congress (ANC) to work towards progress especially with the prosecution of people suspected of corruption, for confidence to be restored in the country.

President Cyril Ramaphosa on the other hand addressed business leaders on the country’s attractiveness as an investment destination in an atmosphere weighed down by the violent crime sweeping the country. A move many see as face saving, judging from the negative impact the attacks have had on the World Economic Forum which kicks off today in Cape Town, South Africa.

Brand SA used the present national mood in South Africa as opportunity to host an impromptu meeting between the President and business leaders from across the country on the sidelines of the World Economic Forum (WEF) in Cape Town. The President used the opportunity to comment on the negative news that has pervaded the country in recent times, especially that of women who were murdered by some men and also those who died during the xenophobic attacks.

Speaking yesterday evening, President Ramaphosa said that it is most unfortunate to meet at a time when the country is going through a spate of horrible news. He harped that the nation is in deep mourning; “we are all deeply disturbed by the killings of women. … It calls on us as men to rise up and say this should never happen in our name. As men we should stand up and say that we are going to bring an end to the abuse of women and children,” he added.

Continuing, the President said that South Africa is facing a challenge of people taking laws into their hands, “as much as they have certain grievances I have said that taking action against people from other nations should never be allowed. SA is a home for all. We are not the only country that has become home for people who are fleeing their own countries,” he said. Making references to reports of residents who took part in co-ordinated attacks, looting foreign-owned businesses in Tembisa, Alexandra, Hillbrow, Cleveland, Jeppestown and the Johannesburg CBD since Sunday. The violence continued on Tuesday, spreading to other areas including Germiston on the East Rand. Similar violence also took place in the Pretoria CBD last week.

President Ramaphosa of South Africa

Ramaphosa provided business leaders with a report back on the government’s progress in improving SA as an investment destination. On coming into office Ramaphosa set a target to achieve a top 50 status in the World Bank’s ease of doing business index. SA is rated 82 out of 190 countries. He said demonstrable progress had been made on reforming the visa regime; decreasing rail and port tariffs; improving policy certainty in mining; and on the drafting of an oil and gas bill. He said the Integrated Resource Plan — SA’s long-term plan for meeting SA’s energy needs — was “close to being finalised”.

But in the panel discussion following Ramaphosa’s speech, business leaders said they needed to see more demonstrable progress, in particular with the prosecution of people suspected of corruption, for confidence to be restored. The Chairman of Absa Wendy Lucas-Bull said that the biggest frustration for South Africa at the moment is [not] seeing action in our plans. “We are very good at coming up with plans but we have not delivered with the speed that the circumstances demand. We are in a turnaround situation and a turnaround situation needs very visible leadership and very consistent leadership.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

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The full impact of the ongoing xenophobic attacks on foreigners in South Africa has been described as an ill wind that will have negative effects on the ailing South African economy. This was the submission two key leading business groups in the country. Business Unity South Africa (BuSA) and Business Leaders South Africa (BLSA) openly condemned the attacks saying that it will have far reaching impacts on the country’s economy calling on the government to take more decisive actions against the perpetrators and also prevent a recurrence of such incident.

With the World Economic Forum in Cape Town coming up, several African leaders have started cancelling their participation in protest to the killings and attacks. This development, analysts say will definitely hurt the country’s image, and also businesses.

The xenophobic attacks which led to the death of five people in Johannesburg and Pretoria have led to the arrest of 189 people so far. The South African President has come under severe criticisms for his failure to speak out against the attacks early enough. To forestall future attacks, the South African authorities have deployed more policemen to hot spots after two more deaths were reported in Coronationville on Tuesday afternoon. This is even as the South African Police have come under severe criticisms for their handling of the crisis because many allege the Police treated the arsonists with kid’s gloves.

The Police Spokesperson, Col. Lungelo dlamini was quoted as saying that the Police have increased deployments to cover all the areas identified as hot spots. Violence has seen several shops being looted‚ burned and property being looted, noting that the situation had been stabilised in parts of Tshwane‚ Ekurhuleni‚ Johannesburg Central‚ Jeppestown and Cleveland. But violent clashes continued in Coronationville.

The South African Police Minister Bheki Cele said that criminals latched on on the crisis to perpetrate their criminal acts. “We can’t rule out pure criminality, of criminals using a sensitive situation where there are real grievances on issues of unemployment and foreign nationals,” he added, but he has ruled out sending in the army, as the government did in Cape Town in July to quell gang-related killings.

Police said they used rubber bullets to disperse a crowd that planned to loot businesses in Thokoza and Kempton Park earlier on Tuesday. Dlamini said criminals gangs were taking advantage of the chaotic situation and breaking into businesses. He said attacks were indiscriminate and not only foreign-owned businesses were being targeted.

The process of identify leaders of the violent groups was under way. “Arrests will be made once full evidence against them has been gathered‚” said Dlamini. Gauteng police commissioner Lt-Gen Elias Mawela thanked members of the public who provided information during the protests. No unlawful activities will be tolerated, he said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Facebook: https://web.facebook.com/Afrikanheroes/

One startup that is particularly tackling the problem of electricity across West Africa, the Ghana-headquartered pay-as-you-go (PAYG) solar company PEG Africa has raised a US$5 million debt funding round from ElectriFI to continue its growth in its existing West African markets.

Here Is The Deal

• The funding comes in the form of subordinated junior debt and will be used for growth in PEG’s existing markets, where chief executive officer (CEO). Hugh Whalan said it had been almost doubling in size every year since 2015.
• The company raised a US$25 million Series C round from existing and new investors towards the end of last year, taking its total raised funding to date to US$50 million, and has now added to that with US$5 million from ElectriFI, the Electrification Financing Initiative, which is funded by the European Union and managed by the EDFI Management Company, established by 15 European development finance Institutions.

PEG Africa uses a PAYG financing model to provide credit for solar home systems to underserved households in Ghana, Ivory Coast and Senegal, and serves over 60,000 households with 400,000 daily users.

“The fact we are now able to raise a significant amount of our funding in debt demonstrates that our approach is financially sustainable. We are delighted to work with ElectriFI to further accelerate our growth,” he said. 

Why ElectriFI Invested

Dominiek Deconinck, ElectriFI fund manager, said the fund was thrilled to support PEG Africa on its growth path.

“With 82.000 direct new connections by the end of 2019, together adding not less than 1.7 MW with solar home systems, ElectriFI’s investment in PEG will strongly contribute to improving quality of life through renewable energy in the markets it operates in,” he said.

ElectriFI Has Been The Active VC In Africa’s Renewable Energy Startup Ecosystem

The Electrification Financing Initiative (ElectriFI) is a flexible financial facility funded by the European Union and managed by the Association of European Development Finance Institutions. ElectriFI aims to support investments that increase and/or improve access to modern, affordable and sustainable energy services. The projects must lead to new and improved connections for populations living principally in rural, under-served areas as well as regions affected by unreliable power supply in developing countries.

Read Also: How Startups In Nigeria Are Disrupting Nigeria’s Electricity Problems

The fund claims to have made 19 investments, totalling 27 million euros and enabling:

• 794 kilotons of C02 avoidance
• 243 MW capacity installed
• 1 800 715 connections
• 1 146 GWh renewable energy per year

In June 2019, ElectriFi was one of the investors that invested a total of $9 Million in a Series A round of funding in the Nigerian distributed utility company, Arnergy. The investment was however led by Breakthrough Energy Ventures with the Norwegian Investment Fund for Developing Countries (Norfund), All On, all participating. 

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

Facebook: https://web.facebook.com/Afrikanheroes/

The race is on for two of Africa’s largest economies. While Nigeria’s GDP in the second quarters of 2019 slowed by 0.16%, South Africa’s GDP expanded by 3.1% in second quarter.

Nigeria’s GDP Falls To 1.94% From 2.10% Recorded In First Quarter, 2019

Nigeria appears to be making progress here, compared to what the situation was this time last year. Figures from Nigeria’s National Bureau of Statistics, the country’s central data center indicate that Nigeria’s Gross Domestic Product (GDP) grew by 1.94% in the second quarter of 2019 compared to the second quarter of 2018, which recorded a growth of 1.50%. Compared to the time last year, this just represents a growth of an increase by 0.44% points.

However, the sad part would remain that compared to the GDP earlier this year, the GDP lost 0.16% points. This is because the GDP recorded in the first quarter of 2019 was 2.10%, whereas the current figure is 1.94%, a decrease of 0.16% points.

In simple terms, the common rationalisation would be that Nigeria’s economy was better before and during Nigeria’s national election, but has steadily declined after the elections.

Here Is All You Need To Know

• During the quarter, which ran from April 1, 2019 to June 30 2019, Nigeria’s aggregate GDP stood at N34,944,151.61 trillion in nominal terms. This figure represents an increase of 13.83% over the performance in the second quarter of 2018 and 9.8% over the preceding quarter.
• The performance observed in Q2 2019 follows an equally strong first quarter performance, and was likely aided by stability in oil output as well as the successful political transition.
• Overall, a total of 15 activities grew faster in Q2 2019 relative to last year, while 13 activities had higher growth rates relative to the preceding quarter.
• On a half year basis, real growth in the first half of 2019 stood at 2.02%, higher than in 2018 which was 1.69%.
• Quarter on quarter, real GDP increased by 2.85% compared to a decline of –13.69% in the preceding period. For better clarity, the Nigerian economy has been classified broadly into the oil and nonoil sectors.

The Oil Sector

In Q2 2019, Nigeria recorded average daily oil production of 1.98million barrels per day (mbpd), or 7.6% higher than the daily average production of 1.84mbpd recorded in the same quarter of 2018 but slightly less than output recorded in Q1 2019 (1.99mbpd-revised from 1.96 mbpd).

The oil sector posted a real growth rate of 5.15% (year-on-year) in Q2 2019, representing a 9.10% points increase relative to the rate recorded in the corresponding quarter of 2018. It also indicates an increase of 6.61% points when compared to Q1 2019(revised). Quarter-on-Quarter, the oil sector recorded a growth rate of –1.55% in Q2 2019. The sector contributed 8.82% to total real GDP in Q2 2019, up from levels recorded in the corresponding period of 2018 but down compared to the preceding quarter.

The Non-Oil Sector

The non-oil sector grew by 1.64% in real terms during the reference quarter. This was –0.40% points lower than recorded in the same quarter of 2018, and -0.83% point lower than the first quarter of 2019. During the quarter, the sector was driven mainly by Information and communication, Mining and Quarrying, Agriculture, Transportation and Storage, as well as Other Services. In real terms, the Non-Oil sector contributed 91.18% to the nation’s GDP, lower than the share recorded in the second quarter of 2018 (91.45%) but higher than the first quarter of 2019 (90.78%)

Deductions From The Report

• From the report, crop production added two times more to the GDP than the oil sector, at 17.02% against 8.59%.
• This is closely followed by trade at 15.36%, and Telecommunications & Information Services at 10.82%. Other notable sectors include real estate at 6.36% and construction at 6.87%.
• Overall, the agricultural sector declined from 3.17% in the first quarter to 1.79% in the second quarter. This is the most striking decline because this would be the lowest decline since September 2018, despite Nigeria’s claim at food sufficiency and recent ban credit for importers of milk and other products.
• The industrial sector is the only sector that saw real growth in GDP with the report indicating a rise from 0.42% in the first quarter of 2019 to 2.1% in the second quarter of 2019.
• The services sector, which is the largest contribution to the GDP in 2018 (at 52.63%) fell to 1.94% in the second quarter from 1.94% in the first quarter. The services sector include banking, insurance etc.

South Africa GDP expands 3.1% in second quarter

South Africa avoided a second recession in two years, with the economy growing by 3.1% in the three months to end-June, according to Stats SA.

This is much stronger than expected: A Reuters poll of economists had forecast growth of 2.4%.

SA’s economy shrank in the first quarter after more than 270 hours of load shedding, weak investment levels, a gold mining strike and a weak grape harvest.

In the second quarter, the mining sector rebounded with growth of 14.4% — contributing a full 1.0 percentage point to GDP growth. This was thanks to the end of strikes at gold mines, but also due to a major rally in metal prices. Gold is currently trading at its highest level in six years, while platinum jumped from below $800/oz in June to above $930 currently.

Finance, real estate and business services increased by 4.1% in the second quarter. Trade, catering and accommodation increased 3.9% and general government services increased 3.4%.

The agriculture, forestry and fishing sector continued to shrink, however, and in the second quarter was 4.2% smaller than in the first. Construction was down 1.6%.

The economy was still only 0.9% bigger in the second quarter of 2019 than a year before. On Tuesday, Stats SA revised the first-quarter GDP number down from -3.2% to -3.1%.

Ahead of the release of the data on Tuesday morning, economists expected a “technical rebound” following the end of load shedding.

While SA avoided a recession, the outlook for the economy remains bleak. Investment levels remain subdued, and businesses are struggling. The latest Absa Purchasing Manager’s Index (PMI) data shows weaker levels of private sector activity, and a grim outlook on future business conditions. Also, South Africa recorded a shock R2.88bn trade deficit for July as imports exceed exports, the South African Revenue Service reported last week.

Accordingly, the latest growth number may not rule out a rate cut when the monetary policy committee meets from September 17 to 19.

In July, the committee cut the benchmark repo rate by 25 basis points to 6.5% from 6.75% — the first cut since March 2018.

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

Facebook: https://web.facebook.com/Afrikanheroes/

For a business that was started in 2015, this is a big deal. But then, expect more from South Africa’s Livestock Wealth, a crowdfarming startup that allows people to invest in livestock and earn from the sale of the offspring. The startup ’s latest investment, although by way of loan, is coming from South Africa ’s AlphaCode, Rand Merchant Investment Holdings (RMI)’s investment vehicle.

“We have granted Zande and Bright On, with whom we’ve been associated for over four years, around ZAR 10 Mn in supplier development loans each and Livestock Wealth has been granted ZAR 2 Mn,’’ says the head, AlphaCode Dominique Collett

Here Is The Deal

• AlphaCode, Rand Merchant Investment Holdings (RMI)’s incubation, acceleration and investment vehicle has awarded R23 million supplier development loans to three fintech startups, Zande Africa, Bright On Capital and Livestock Wealth.

Here Is Why Shezi’s Livestock Wealth Is Not Just Your Regular AgricTech Startup

• Livestock Wealth was only started in 2015 when Shezi realized there was an untapped commercial opportunity around livestock farming in South Africa that could leverage the African community’s close links to cattle.
• Currently, the startup has a turnover of ZAR 17 Mn with 71 staff.
• So far, the startup has over 2000 cows at various partner-farms valued at ZAR 40 Mn.
• There are currently over 1200 local and international investors on Livestock Wealth’s platform.
• The KwaZulu-Natal-born electro-mechanical engineer Ntuthuko Shezi’s Livestock Wealth offers people with no access to land, time or skills the opportunity to own livestock within a professionally managed farming operation.
• The Web and mobile application allow investors to invest their money in cows rather than in unit trusts, shares or exchange-traded funds.
• Through connecting its network of small-scale partner farmers to investors, the business model allows farmers who cannot afford to scale their business to access capital, while offering the investor an opportunity to invest in assets which are not influenced by financial market trends.
• Potential investors can buy online, from the partner farmer, while Livestock Wealth facilitates and manages the assets like an investment portfolio.
• In fact, Shezi did his research well: Cattle farming in South Africa is estimated to be worth around R142 billion, behind poultry, with the local beef industry generating an estimated $144 million in exports in 2017, according to data from Trade Map. This is the opportunity he pounced on.
• The growth in the livestock business was so overwhelming that the investment startup says it has now expanded its offerings to include an array of agricultural assets that can be owned by potential investors, including sugar cane plants, macadamia trees, and maize plants, and a separate option of investing in a connected garden system which grows all types of organic vegetables.

Read Also: South Africa’s Startup Livestock Wealth Is Now Worth More Than $7 Million

Why AlphaCode Chose Livestock Wealth

According to Dominique Collett, head of AlphaCode Livestock Wealth got the approval for the funding because these type of businesses hardly get the funding they need.

“As part of our commitment to partner and grow financial services startups, we’ve leveraged our supplier development spending to support them,”she said. 

Apart from granting Livestock Wealth the development loan because it belongs to a sector that is largely underfunded, it appears Livestock Wealth’s loan need was easily considered because the startup had always, at all times, been part of the AlphaCode history. 

“We have been part of AlphaCode since 2015 when we won R500 000 at a pitch evening. At that stage, we only had 26 customers. We have grown to over a thousand customers. Our platform has grown to become a dependable supplier to large off-takers such as Woolworths,” noted , CEO, Ntuthuko Shezi who also revealed that the investment will be channeled to build Livestock Wealth’s team.

“We have also grown beyond cows into a platform that connects farmers with investors where the investor owns real, high value, agricultural assets. These assets grow in the farmer’s care and earn profits when the products are sold at maturity,” he said.

About other startups that secured the funding

Bright On Capital

Bright on Capital is  South Africa ‘s peer-to-peer online enterprise-lending startup, serving as an online market place allowing SMEs to raise working capital with ease from traditional and non-traditional lenders.

The startup has grown its SME lending book beyond R25 million and expects the lending book to exceed R50 million by early 2020, increasing to potentially R100 million in 2021. The team has grown from the initial two co-founders, Tsepo and Koena Headbush, to six permanent staff.

Zande

Zande started in 2016 with just two founders, Siya Ntutela and Mdu Thabethe. The business provides trade and merchant finance to spaza shops to enable stock purchases. It now has a turnover of R17 million with 71 staff and it is about to open a third depot in Orange Farm, south of Johannesburg, after growing its operations in Nelspruit and Ermelo.

Siya Ntutela the co-founder of the startup said the loan will be used to improve the firm’s technology platform as well as aid the company in setting up its third depot in South Africa.

 — — — — — — — — — — — — — -

1 United States Dollar equals 15.25 South African Rand

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

Facebook: https://web.facebook.com/Afrikanheroes/

Logistics and distribution startup ElasticRun is in talks to raise $50–55 million, led by South African internet and media group Naspers, valuing the company at $250 million, multiple people aware of the matter told ET.

Pune-based ElasticRun is an asset-light transportation network that caters to industries including consumer goods, online retail, manufacturing, automotive and hospitality.

The company, which is based on the shared economy concept, aggregates spare logistics infrastructure capacity from businesses like kirana (corner) stores, local couriers, and small and medium businesses to fulfill customer orders.

Since it does not own warehouses or delivery centres, the cost structure is variable and on a “per delivery” basis, unlike traditional logistics players. The company claims this significantly reduces the capital required to build a national-level network, eliminates capacity wastage in lean periods and loss of business during a spike in demand. Even though this network would have high per-unit variable costs, its net spend on logistics would be lower than fixed cost networks.

“Naspers believes that this model is the most capital efficient way to build a scalable technology logistics network in India. The intent for Naspers is to double down on the investment in the next eight to twelve months,” said one person directly aware of the deal. 

Naspers and ElasticRun did not respond to emails till press-time, Sunday.

NTex Transportation Services, which owns and operates ElasticRun, said in regulatory filings that revenue for fiscal year 2018 stood at Rs 63 crore on a loss of Rs 17 crore. The company closed fiscal year 2019 at about Rs 200 crore, sources told ET. In August, ElasticRun raised Rs 58.2 crore from Kalaari Capital Partners and Norwest Venture Partners at a valuation of Rs 513 crore, regulatory filings show.

ElasticRun was founded by Sandeep Deshmukh, formerly a senior executive at Amazon India, and Saurabh Nigam and Shitiz Bansal, who were both with EdgeVerve, the product and platform unit of Infosys. Just before starting ElasticRun in 2016, Deshmukh was at Amazon India leading a similar business vertical “I Have Space” (IHS) — a crowd-sourced transportation channel for the etailer, and prior to that, Amazon’s Kirana Now initiative.

ElasticRun competes with Matrix Partners and Stellaris Venture Partners-backed Loadshare, which was founded by former Myntra top executive Raghuram Talluri.

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

Swvl is invading its Kenyan market with over Sh1.5 billion ($14.5 million) investment to finance an aggressive route expansion plan in Nairobi.

“The investment will go into building the ecosystem, including supply and demand, bringing in drivers and creating awareness,” said SWVL co-founder and CEO, Mostafa Kandil, during the firm’s official launch in Nairobi on Thursday.

Here Is All You Need To Know

• Swvl is already operational on multiple Nairobi routes, has set a target to grow its network to 500 routes served by 1,000 buses.
• The app-based public service transport operator that launched in Nairobi on a test basis seven months ago has already signed up 150 buses on 100 city routes.
• The firm, which started in Cairo, is seeking to take advantage of Nairobi’s chaotic and largely unreliable public transport system. 

“Kenya is a market with a need for a stable solution for the perennial traffic snarl ups and SWVL believes that we can be of great benefit to the local consumer and the transport sector as a whole,” said Mr Kandil.

• The tech company leases the vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes. It tops up the daily collection if the earnings for the day are less than the daily leasing amount, but collects any income above the agreed rate.
• The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.
• The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.

“We’re building a mass transit system. The investment will keep us going in this market,” said Shivachi Muleji, SWVL general manager for Kenya.

• The firm says its popular routes include Ruiru to the CBD/Upper Hill, Karen to CBD/Westlands via Upper Hill, Ongata Rongai to Westlands/CBD via Upper Hill, Ruiru to Westlands, Ndenderu to CBD/ Upper Hill, and Kikuyu to CBD/ Upper Hill.
• According to Mr Muleji, the company is in negotiations with local Ford dealers and a financial institution to provide vehicles at 20 percent cheaper than the market rate as well as financing options for drivers. This is aimed at growing its bus network to meet the demand of the planned route expansion. The app company, which has received pushback on some of its routes from PSV (matatu) operators, says it is engaging some Saccos in the sector to invest in the business.
• The service currently charges a flat rate of Sh200 but has plans to offer distance-based pricing at the end of 2019 or early next year.

“Kenyans are picky consumers so you have to offer a premium service for the extra 10 percent you charge,” said Mr Muleji.

• Tech-based solutions in the transport sector have been causing a ripple locally with Uber making its entry in the taxi business several years ago despite protests by taxis at the onset.
• Kenyan-based Little Cab also offers a similar shuttle service in the market while Safiri is still in the pilot stage of data collection.

Charles Rapulu Udoh

Charles Rapulu Udoh is 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 organizations 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.

Facebook: https://web.facebook.com/Afrikanheroes