News - Afrikan Heroes

Lagos Now Has Its Own Commodity Exchange

June 19, 2019

Good news for investors in Nigeria, particularly in Nigeria’s most populous city, Lagos. A few months from now, trading would fully begin on the newly approved Lagos Commodity Exchange. Nigeria’s Securities and Exchange Commission, the highest securities regulator in Nigeria has granted final approval for Lagos commodity exchange.

“In the exercise of the power conferred on it by the Investment and Securities Act (ISA) No 29 of 2007 and the Rules and Regulations made there-under, the Commission has granted your Company, registration to perform the function of a Commodities and Futures Exchange in the Capital Market with effect from June 14, 2019. By virtue of this registration, you are authorised to perform the function for which you are registered,” these are the words from SEC that changed the game.

A Look At Lagos’ New Commodity and Futures Exchange, LCFE

The Lagos’ New Commodity and Futures Exchange, LCFE will be the first by any state in Nigeria, apart from Nigeria’s national Commodity Exchange.
At present, only two commodity exchanges are registered by the Securities and Exchange Commission in Nigeria: the privately-owned AFEX Commodity Exchange, registered in 2014, and the much older government-owned Nigeria Commodity Exchange (NCX).
The LCFE is promoted by the Association of Securities Dealing Houses of Nigeria (ASHON).
A commodities exchange is a legal entity that determines and enforces rules and procedures for trading standardized commodity contracts and related investment products. A commodities exchange also refers to the physical center where trading takes place. The commodities market is massive, trading more than trillions of dollars each day.
Traders rarely deliver any physical commodities through a commodities exchange. Instead, they trade futures contracts, where the parties agree to buy or sell a specific amount of the commodity at an agreed upon price, regardless of what it currently trades at in the market at predetermined expiration date. The most traded commodity future contract is crude oil, gold, natural gas, diamond, etc.
The Lagos Commodity and Futures Exchange according to the letter of approval from SEC will fully take effect from June 14, 2019.

“SEC has shown a commitment to open up the commodities market ecosystem for ASHON’S initiative of floating LCFE to come to fruition. Congratulations to the market, the operators and the economy. We are really grateful to SEC, shareholders, and all our partners NSE, CSCS, technology providers etc that collaboratively bathed this new baby,” ASHON’s Chairman, Chief Patrick Ezeagu said

Will The New Commodity Exchange Be A Different Success Compared To Nigeria’s Struggling Commodities Exchanges?

Although there are already two commodities on the ground in Nigeria, Uche Uwaleke, Nigeria’s first Professor of Capital Market and President of the Association of Capital Market Academics of Nigeria notes that:

The sub-optimal performance of Nigerian Commodity Exchange, despite its potential to transform the agriculture sector, has been blamed on several factors including the fact that the conversion from a stock exchange to commodity exchange was done without due regard to the availability of the necessary conditions. The requisite infrastructure for physical trade including warehouses and grading laboratories is deficient.

Although, the cheery news of the approval has elicited jubilation among stockbrokers with torrents of congratulatory messages to ASHON and the management of LCFE. Analysts were quick to say that Nigeria’s capital market was long overdue for a thriving commodities exchange in view of the ongoing occasional shocks in the international oil market and the federal government’s resolve to give agriculture a pride of place as the country’s major income driver.

Perhaps The New LCFE Would Beat Ethiopia’s Commodity Exchange (ECX) Considered A Success Story In Africa

In a 2015 study on ‘Commodity Exchanges and Market Development’ Shahidur Rashid, of the International Food Policy Research Institute, noted that ‘although the ECX was launched in 2008 with a mandate to trade cereals, it was soon realized that its trade volumes were insufficient.

In late 2008, the government, therefore, passed a proclamation requiring all coffee and other export crops grown in Ethiopia to be exported through the ECX. At one point in late 2008, the government had to confiscate 17,000 tons of coffee from 80 exporters attempting to bypass the ECX’.

As documented in the study, this measure was positive for the ECX which generated over US$1.0 billion in revenue in 2012, sufficient to defray the cost of its own operations.

In all, the government piper performs according to how the government wants the tune to be dictated.

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/

At Last Ethiopia Opens Up Its Telecom Industry, Bidding To Start September

June 16, 2019

At the moment, there is no MTN, Airtel, Safaricom, Vodafone or any other mobile telecom operator in the East African country of Ethiopia, but that will no longer be the case before this year ends. The country is set to award its first set of telco licenses to multinational mobile companies by the end of 2019.

Before this happens, Ethiopia’s government has continually monopolized the country’s telecom industry. Hence, this is expected to end a state-wide monopoly and open up one of the world’s last major closed telecoms markets.

When This Happens, Investors Would Be Looking At Ethiopia’s Population As A Big Bait

With a population of 105 million people, the second most populous country in Africa after Nigeria will be baiting in squads of investors.

“There will be a bidding war. It’s the last greenfield site. There’s an opportunity to be market dominant,” said one company executive.

A law to create the new watchdog — the Ethiopian Communications Regulatory Authority — is already being debated by parliament. The new telecoms regulator will issue the licenses when the law is approved and this institution set up.

“By this time next year, we hope that many Ethiopians will be using different SIM cards. We are operating on a very aggressive timeline,” Ethiopia’s State Minister of Finance Eyob Tekalign Tolina said.

Vodafone, South African operator MTN, France’s Orange and Etisalat of the United Arab Emirates are likely to be among the leading contenders vying for entry into the Ethiopian market. Senior executives from those companies attended a telecoms conference in Addis Ababa this week and met with government officials.
The bidding process for two licenses will open in September and the licenses would be awarded in December.
Company executives who met with government officials this week were told to expect an announcement on the liberalization plan, possibly next week.

A Look At Ethiopia’s Telecom Market

Right now, the average rural inhabitant of Ethiopia has to walk 30 kilometers to the nearest phone. The ETC announced 7 September 2006 a program to improve national coverage and reduce the average distance to 5 kilometers. The ETC has also stated that the rural telecom access within 5 km radius service has currently reached 96 percent.
Since 26 September 2017, it is not possible to buy and use Ethio Tel SIM cards in mobile devices that haven’t been purchased in Ethiopia or registered with the authorities.
As of 2012, 20.524 million cellular phones and 797,500 mainline phones were in use.
Use of voice over IP services such as Skype and Google Talk was prohibited by telecommunications legislation in 2002.
In 2007, there were just 89 internet hosts. There were 447,300 internet users in 2009. In 2010, just 0.75 percent of the population was using the Internet, one of the lowest rates in the world.
Telecommunications in Ethiopia is a monopoly in the control of Ethio Telecom, formerly the Ethiopian Telecommunications Corporation (ETC).

With the proposed new reforms, Ethiopia would be seeking to liberalize the country’s economy.

Government officials are already looking at several potential options, including the sale of a minority stake in Ethio Telecom, granting of new licenses to multiple telecoms operators or a combination of both.

The government will expect the winning companies to start operations next year, initially using Ethio Telecom’s infrastructure to run their networks, the sources said.

Ethiopia’s potential as an untapped market could outweigh concerns about any risks, including Ethiopians’ low-income levels and the country’s over-valued birr currency.

There are 31 countries in Africa where there is a state-owned incumbent telco that is either dominant or has monopoly privileges that hamper the growth and efficiency of the market.

These are: Algeria; Angola; Benin; Burundi, Cameroon, Central African Republic, Chad, Comoros, Congo-Brazzaville, DRC, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Libya (which has several state entities), Mali, Mozambique, Namibia, Niger, Sao Tome, Sierra Leone, Swaziland, Tanzania, Zambia and Zimbabwe.

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/

Angola: Africa’s Richest Woman Is Offering to Buy 25.6% of One of Brazil’s Leading Telecoms

June 15, 2019

Africa’s richest woman Isabel dos Santos is poised to widen her wealth margin. Her latest offer is for a 25.6% stake, representing € 1.2 billion in one of Brazil’s leading telecom operators, Oi.

Here Is The Deal:

Isabel dos Santos is making a preliminary offer for the acquisition of shares of Portugal Telecom SGPS, a company in the process of merging with Oi, for a total of € 1.2 billion.

Hence, if the merger becomes successful and Isabel finally acquires the 25.6% stake in Portugal Telecom SGPS, she would invariably be holding a 25.6% stake in Oi Telecom.
But it appears she is doing this as a strategy to block the sale of Portuguese Telecom assets by Oi, of which she may be affected. In the merger with Portuguese Telecom, the Brazilian Oi Telecom incorporated the PT Portugal subsidiary, which brings these assets together.
In order to raise funds for the consolidation of the telecommunications market, Oi is going to sell the operational PT after the merger.
The move comes just days after European group Altice voiced interest in the PT’s assets in Portugal for about € 7 billion. Terra Peregrin, controlled by Isabel, said it was willing to pay € 1.35 per share of PT, an 11% premium. But Isabel appears to have an edge because she is a shareholder of the Portuguese operator competitor NOS. The negotiations for the Portuguese assets continue and new proposals may be presented.

The eventual offer of £1.2 billion by Isabel is coming with a condition: Isabel wants the merger between PT and Oi to be suspended until the 30th day after the settlement of the offer. The Board of Oi seems stuck at this point. It recently announced that it is considering “untimely” changes in agreed terms in the process.

Isabel is not seeing this deal as a hostile one at, all. Her spokesman told Portuguese newspapers that the offer for the shares of PT SGPS is not “hostile” and has as its objective the acquisition of a minority stake in Oi, allowing the maintenance of the Portugal Telecom group unit.

Once the merger is completed, the holding company PT SGPS no longer has the assets but has a relevant stake in Oi and the right of veto in strategic decisions. The share of PT SGPS in Oi is 25.6% and may be raised to 37.3% within six years.

The movement, according to the spokesman, was made in harmony with the objectives set out in a joint statement issued by Zopt last week. Zopt, the operator of the operator NOS, announced that it entered the battle for PT to defend the “national interest”.

But The Price Offer May Be Far From It

£1.2 billion? That may seem a serious far-cry from analysts. The Association of Investors and Technical Analysts of the Capital Markets, an entity that brings together minority shareholders of PT, has since issued a statement in which it supports the increase of the offer to € 1.94 per share – the value corresponds to the average share price in the six months prior to the offer.

Shares in Portugal Telecom, Lisbon, closed up 11.83%, to € 1.36 on Monday. Oi’s preferred shares rose 6.67% to R $ 1.28.

“If the offer is in fact serious and with the intentions described, the offeror should review it for the purposes of mandatory bidding, in particular by adjusting the counterpart (…). Otherwise, said offer can only be understood as a fun and strategic maneuver aimed at other interests, “the statement said.

A Simpler Picture

Portugal Telecom SGPS is a holding company that is a partner of the Brazilian operator Oi, with 25.6% of the shares.
The stake was originally 37.3% but was reduced after Portugal Telecom bought 897 million in commercial paper from Rioforte, an arm of the Espírito Santo Group (GES), without the knowledge of the Brazilian operator’s direction and despite the economic fragility of the conglomerate, of which PT is a member.
The company took default in July. In addition to having a reduced share in Oi, PT SGPS is also the “owner” of the debt left by Rioforte. As Gores, owner of Rioforte has entered into judicial reorganization, the market finds it unlikely that the money will be recovered.
Isabel is considered a symbol of the “influence of power and wealth in Angola,” according to the Financial Times.
In an interview published in the diary in 2013, the Leading Business Woman of Africa described herself as an ordinary person, who drives on her own in Luanda and faces traffic like anyone else.
Africa’s richest woman’s fame, however, is that of an influential business woman who has created thousands of jobs to Angolans. “I do business.”

Isabel Dos Santos At A Glance

Aged 46, with a net worth of $2.3 billion, Isabel Dos Santos is the 8th richest person in Africa. She owns shares of Portuguese companies, including telecom and cable TV firm Nos SGPS.

In one of her interviews, Africa’s richest woman shared her advice to entrepreneurs:

‘‘Your best business bet is you, your skills, your motivation, and your passion.
You must have an idea, make a five year plan, prepare your money, ground your idea in detail, be persistent, and partner yourself with a trusted team. Stay passionate always, and execute — don’t delegate.’’

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/

Kenya: $5m New Investment In Agri-tech Startup Twiga Foods Makes It One Of The Most Funded Startups So Far In Africa

June 14, 2019

African startups are not looking back. Kenyan agri-tech startup Twiga Foods has received a US$5 million secondary investment from France’s richest family, the Mulliez family, to support its growth, making it one of the top-funded startups in Africa for the year 2019.

The startup is one of the best-funded on the continent, securing a US$10.3 million Series A funding round in 2017 and a further US$10 million last November, and has now raised an additional US$5 million from the Mulliez family’s investment firm Creadev.

As part of the secondary transaction, early investors in Twiga Foods including Adolf H. Lundin Charitable Foundation, Blue Haven Ventures, Crescat Limited, Omidyar Network, and Index Ventures have partially sold their stakes in the startup as it looks to accommodate later-stage investors.

“Having Creadev join our shareholding is a huge boost to our mission to deliver safe, affordable high-quality food to urban consumers, while providing reliable markets for farmers. It will support our efforts towards growing our ecosystem of farmers and retailers,” said Twiga Foods chief executive officer (CEO) Peter Njonjo, who recently joined the company after 21 years at Coca-Cola.

Sarah Ngamau and Pierre Fauvet, Africa heads for Creadev, said they were proud to enter into a long-term partnership with Twiga as the startup answers a massive market need — the structuration and formalization of the food logistics supply chain.

“We are impressed by Twiga’s fast growth, driven by an experienced and result-oriented management team. We believe the appointment of Mr Njonjo as CEO is another proof of Twiga’s ambitions and willingness to grow to the next level,” they said.

“We will leverage on Creadev’s international retail network and future funding capacity to support the team in executing this ambitious expansion plan and continue delivering their strong value proposition to small-holder farmers, informal retailers, and end customers.”

What The Startup Does

Founded in 2014, Twiga Foods is a business to the business food distribution company that builds fair and reliable markets for agricultural producers and retailers through transparency, efficiency, and technology.

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/

WorldRemit: Ugandan Businesses Can Now Receive Or Send Money To UK Faster

June 13, 2019

Businesses, entrepreneurs or contractors in Uganda selling goods and services to small and medium-sized enterprises (SMEs) in the U.K. can now receive payments faster and more conveniently following the launch of WorldRemit for Business in the country.

What This Means

With this launch from the world leading digital remittances firm WorldRemit, U.K.-based SMEs can quickly pay their employees and contractors in 140 countries worldwide, including fast-growing emerging markets such as Kenya, Uganda, and South Africa. The new service will first be available to U.K.-registered businesses.
For Ugandan entrepreneurs and contractors doing business with clients in the U.K., this service will lead to significant time and cost savings.
Traditional bank payments, which are still the dominant international transfer method for businesses sending money abroad to Uganda, can take up to a week, and often incur high fees and exchange rates. In contrast, WorldRemit’s low fees and exchange rates are shown up-front and customers can send money easily via the app or website.

Transfers To Uganda To Be Processed With 24 Hours

With this new service, users sending funds to Uganda can easily track their transfers in real-time on the WorldRemit app and opt-in to receive daily exchange notifications to send money at the optimal time.

Transfers to Uganda are processed within 24 hours or less and local entrepreneurs can receive payments via bank account, mobile money or cash pick-up — whichever method is most convenient for them.

“When I first started WorldRemit, I was frustrated with the high charges and long delays in sending money abroad both as a business owner and consumer. Over the past 9 years, we’ve made it easier for 4 million people around the globe to send and receive money,’’ Ismail Ahmed, Founder and Executive Chairman at WorldRemit said.

Today, we’re pleased to extend that service offering to businesses, and put an end to the steep fees that many pay, especially when sending to Uganda. We’re committed to making it quick, safe and easy for you to pay individuals across borders, leaving you to focus on growing your own business.”

WorldRemit customers complete over 1.4 million transfers every month from over 50 countries to over 140 destinations using its app or website and remains committed to providing innovative solutions to meet money transfer needs across the world. Earlier this year, the company announced a new partnership with FINCA and Diamond Trust Bank to further solidify its vast partnership network.

Image result for which country most dependent on remittances

The U.K. is one of Uganda’s most important trading partners, with Uganda mainly exporting tea, coffee, and horticultural products. However, with the advent of digital technologies such as e-commerce, smaller entrepreneurs have been able to capture a growing share of U.K.-Uganda trade, especially in the services sector. WorldRemit for Business will enable this new class of digital savvy Ugandan entrepreneurs to get paid quickly and securely.

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/

Kenyan Logistics Startup MPost Completes Pre-Series A Round of Funding

June 12, 2019

More startups in Africa are simply moving ahead of others, and faster. Kenyan logistics startup MPost is the latest to join this league.

The amount of fund raised by the startup was not disclosed, but the funding came from South Africa’s Cape Town-based VC firm HAVAÍC.

“We are excited that Havaic is investing in MPOST. As a seasoned investment and advisory firm, HAVAÍC will undoubtedly bolster MPost’s growth and impact in the region. This is a vote of confidence in our product and indeed our vision as a company,” said chief executive officer of MPostAbdulaziz Omar was quoted as saying.

The startup which has developed a patented technology allows users to transform their phone into a unique mobile postal address and mobile postal box.

“This partnership with Startupbootcamp, HAVAÍC and MPost will enable us to enhance the efficiency and user experience of the product, and improve the long term benefits to our clients and stakeholders,” said chief technology officer (CTO) Twahir Mohamed.

MPost At A Glance

The startup was founded in 2015 by Abdulaziz Omar and Twahir Mohamed. The startup allows mobile phone numbers of its users to be converted into official virtual addresses which will allow the users to be notified whenever they get mail through their postal addresses.

The startup has already gained 40,000 users, mostly as a result of its partnership with the Postal Corporation of Kenya. It has been primarily self-funded but obtained some angel investment last year. The latest round of funding comes from established investment and advisory firm HAVAÍC, which also plans to participate in MPost’s forthcoming Series A round.

HAVAÍC’s Rob Heath, the partner responsible for pan-African and international business at the firm said HAVAIC invested in the startup because:

“After spending time with Aziz and Twahir in Nairobi and seeing the solution in action, it’s clear that this is not just a technology and commercial product. MPost makes a real impact on people’s daily lives and as an investor, it’s rewarding when we can tie these two elements together. That being said, this is a great example of African problems producing global solutions — one of the cornerstones of our investment thesis at HAVAÍC.”

MPost is further moving to Uganda ahead of further launches in Rwanda, Botswana, Tanzania, and South Africa.

Last year, the startup participated in the Startupbootcamp AfriTech accelerator program in Cape Town, where it was introduced to HAVAÍC. MPost will also welcome Startupbootcamp AfriTech co-founder Zachariah George onto the board to represent both his business and HAVAÍC.

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/

What Kenyan Businesses Need To Know About The New Currency Policy In Place In The Country

June 11, 2019

As you would expect, the first implication of the Kenyan new currency policy (which is that the country’s currency would be replaced with a new generation of banknotes and that Kenyans must return their 1,000 shillings ($10; £8) notes to banks by 1 October, in a bid to fight money laundering, counterfeits, and corruption) is that many businesses would go in for it.

The new currency notes will be in Sh50, Sh100, Sh200, Sh500 and Sh1000 denominations. Although Kenya’s Central Bank Governor Prof Patrick Njoroge said the Sh50, Sh100, Sh200 and Sh500 notes will be phased out slowly, he has however insisted that:

“The emergence of counterfeits has become a great concern. All the Sh1000 notes were withdrawn by a gazette notice on Friday. Those in possession [of the bank notes] have until October 31, 2019 to release them,” said Prof Njoroge who urged Kenyans to have the notes changed.

Below are the implications of the change in this currency policy on Kenyan businesses.

By November This Year, All Those In Possession of The Old Ksh1000 Notes Will Not Be Able To Use Them

This is directive of the Central Bank of Kenya. Mr. Njoroge said the Central Bank of Kenya is giving all Kenyans in possession of the old Ksh1000 a four-month transition period in order to allow them enough time to change the old currency within their possession.

For Kenyan exchanging less than 5m shillings, they would be able to do so at their local bank but any amounts higher than that will need approval from Kenya’s central bank. Those are to seek approval from Kenya’s Central Bank include those without bank accounts and with over Ksh.1million of the old currency.

Another strategy would be to block all ways of exploiting the new policy. The bank is already in talks with managers of foreign-exchange bureaux and money-remittance providers to put in place controls to prevent illicit financial flows.

There is an alleged feeling of desperation among those suspected to be hoarding money acquired illegally and who are hence unable to bank it as they cannot openly declare its source. Such individuals are faced with the challenge of losing the money when it is devalued on 1st October as Kenya officially moves on to the new currency as is dictated by the 2010 Constitution, reports Kenya’s Investment Company Soko Directory

Commercial banks are expected to obtain confirmations from customers on the nature of their businesses that generate the respective large cash transactions.

Kenyan Shillings Can Be Used Once In A While In Uganda and Tanzania, But This Is No Longer Going To Be The Case

With this new policy, Kenyan businesses using Kenyan shillings to transact or do foreign exchange businesses in Uganda and Tanzania will not be able to do so again. Mr. Ngoroge has communicated to banks across the East African region where Kenyan shillings is often used as a legal tender to ensure that Kenya’s illegal money did not get exchanged in their countries. To this effect, the Bank of Uganda, Uganda’s highest bank has mandated all banks in Uganda to stop accepting Kenyan currency at the counter.
A statement from Uganda’s Central Bank said the move is aimed at boosting Kenya’s fight against counterfeits and illicit flows.

“The Central Bank of Kenya has informed Bank of Uganda that they have issued a new series of Kenya banknotes effective May 31, 2019…..in light of new developments, BOU will not accept Kenya shillings at its counters with immediate effect,” the notice reads.

The memo also said the new currency is only available in Kenyan banks.
The bank further directed all commercial banks in Uganda to subject all cash flows from and into Kenya to due diligence. The Tanzanian central bank has also stated the same.

The Change Will Most Likely Make More Money Available To Businesses. The Best Time To Borrow May Be Now

With the new move, expect previously hoarded cash to be collected back for redistribution. There are a total of 217.6 million pieces of 1,000 shillings in circulation in Kenya according to a statement by the Central Bank of Kenya (CBK).

The Kenya Association of Manufacturers is leading the pack of those Kenyans who see opportunity from this. KAM chairman, Sachen Gudka has been quoted as saying:

“This change is likely to redirect monies that are presently hoarded and funneled into funding illicit economic activities into the formal banking and lending structures to finance the production of real goods and services.”

He also believed that the move will give citizens a better purchasing power and push for higher demand and supply for local products, and as such boost positive legit businesses in the country.

There Is A Big Question On Whether The Design Of The New Currency Is Constitutional

Article 231 (4) of the Constitution of Kenya states that “Notes and coins issued by the Central Bank of Kenya may bear images that depict or symbolize Kenya or an aspect of Kenya but shall not bear a portrait of any individual.”

Activist Okiya Omtatah has since gone to court to block the new currency over the inclusion of the portrait of Mzee Jomo Kenyatta, contrary to the requirement of the constitution.

The Chief Justice David Maraga has been asked by the High Court to constitute a 3-judge bench to deliberate on the matter.

But the CBK governor has said that design was well within the Constitution’s directions.

Countries That Once Toed Kenya’s Footsteps

In 2016, India changed almost all of its cash overnight, which some critics claim caused long-term financial problems. The Indian government said it was a necessary move to tackle tax evasion and terrorism funding, and in a country where 90% of transactions are in cash, to move towards a cashless society.

Nigeria introduced a similar ban on old notes in 1984 in an attempt to crack down on corruption, as did Ghana in 1982 to help with tax evasion.

This may be a big-time signal for businesses in Kenya to consider storing their cash in foreign domiciliary accounts.

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/

Thirteen Leading Global Banks Plan To Launch Cryptos in 2020

June 10, 2019

Good news for users of cryptos. There are plans by thirteen of the world’s largest banks, including UBS, Barclays, and Santander, to launch crypto versions of major global currencies in 2020, according to the Financial Times. The banks would be led by UBS and they have been working on crypto, nicknamed Utility Settlement Coin (USC) since 2015 to determine if blockchain can help optimize processes in wholesale banking.

Here Is What This Means

To make this a reality, the 13 banks, in addition to Nasdaq, have also invested £50 million ($63 million) in a new venture, Fnality, to run the USC project.
The USC will make it possible for users to get digital cash instruments to settle their transactions.
The system will be denominated in major global currencies including the US dollar, yen, euro, and sterling.
Each unit of the crypto denominated in a specific currency will be backed by the corresponding unit of traditional currency, so as to keep the price of the coin stable.
At the outset, the project will focus on creating niche applications. That is, Fnality will initially focus on creating the necessary market infrastructure that will make the crypto to work.
These initial applications will include meeting margin requirements in derivatives trades. A derivative is referred to as the security or financial instrument that depends or derives its value from an underlying asset or group of assets.
They are simply contracts between two or more parties. The value of such a contract is determined by changes or fluctuations in the asset where it derives its value from.
Currently, that process takes at least a day to be satisfied, but it would become almost instantaneous with the USC, according to Fnality CEO Rhomaios Ram cited by the Financial Times.
Beyond that, the USC could soon make it possible to clear and settle trades immediately. This could prove to be transformational, according to Hyder Jaffrey, head of strategic investments at UBS’ investment bank.

This May Suggest That More Banks Are Finding Blockchain and Cryptos Acceptable

Although this is not assured, USC suggests that banks are gradually finding confidence in blockchain and cryptos. However, these 13 banks will most likely still have to scale some legal and regulatory challenges in their efforts to adopt the technology and will need to prove that the scalability issues that hamstrung early experiments in crypto have been resolved.

The journey may be a tougher one though. This is because to develop an ecosystem that will be enough to convince the majority of banks and financial institutions (FIs) across the world to throw away existing processes for transaction settling will take time.

Indeed, the USC is a major step towards sealing a major approval for the technology but the end of the road is still far. The weight of the banks backing the USC should help the project secure traction — but this won’t guarantee success.

The Implication of All These

It appears blockchain technology is gradually gaining momentum. Facebook is seriously ready to launch its own crypto solution. The social media network has been busy pushing out efforts to enter financial services via a crypto solution. The solution will aim to provide payment options for its 2 billion users. A 2020 launch date is expected any moment from now.

A group of banks in Japan is also considering a 2020 calendar date for the launch of the group’s own cryptos. For sure, 2020 is going to be a year of blockchain technology. When these happen, blockchain tech may be signaling that it has become accepted into the mainstream system as a legitimate way of transacting, a hope that has since been hanging unfulfilled.

Combine all of these with USC, you get to find that cryptos are beginning to gain traction both within retail and institutional settings.

However, blockchain’s potential would still need to convince more of its believers. The head of Germany’s central bank said, for instance, that its trial of using blockchain to transfer and settle securities didn’t prove to be faster or cheaper than existing processes. Bank of America’s (BofA’s) tech and operations chief, Cathy Bessant, also echoed that she has yet to see a genuine use case that can scale to meet enterprise needs — despite the bank holding or having applied for the most blockchain-related patents among US FIs.

Should the USC finally work as desired, it would be an end to all these speculations and fear. Repeated over and over again without much concern, blockchain would finally come to stay.

Image result for banks that use blockchain

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/

MTN Group Launches Africa’s First Artificial Intelligence Service for Mobile Money

June 8, 2019

MTN Group is not relenting in its quest to fully utilize the power of technology to innovate. The telecommunication company has announced the launch of Africa’s first Mobile Money (MoMo) artificial intelligence service or “chatbot”. In a statement from MTN Group, the chatbot went live in Ivory Coast in May and will be rolled out across MTN’s MoMo footprint in the next few months.

What The New MTN Chatbot Looks Like

Like the Chinese WeChat bots integrated into WeChat app, that can set medical appointments, call a taxi, send money to friends, check in for a flight and many many other, MTN’s artificial intelligence mobile money “assistant” enables customers to engage with MTN’s MoMo services, including payments, on various social media platforms such as WhatsApp and Facebook Messenger, and via SMS.

The chatbot is an artificial intelligence guide that assists users to navigate MTN’s MoMo services and provide other useful information. This innovation leverages messaging and artificial intelligence to drive customer engagement and enhance their MTN MoMo experience.

The service will also be included over time, in MTN’s own newly released advanced instant messaging service “Ayoba”.

***How a Chatbot Works***: *Example of user request analysis.*

Commenting on the launch, MTN Group President and CEO, Rob Shuter said:

“We are passionate about bringing the power of our mobile money solutions to more than 60 million customers across Africa over the next few years. Harnessing modern technologies like artificial intelligence can improve in scale, how MTN interacts with customers, enabling them to reach us anytime and anywhere, through a variety of channels including social networks and messaging applications. We can also harness the power of artificial intelligence to provide our customers with the right answers to their questions at the right time.”

“We are committed to improving financial inclusion with a range of solutions aimed at addressing the needs of various market segments. While MTN has made great strides in these areas, we will continue working to deliver our vision for MTN to become one of the largest Fintech players across our footprint.”

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/

South African New Tax Law: What Businesses in South Africa Need to Know

Businesses in South Africa would now have to pay new taxes, thanks to the Carbon Tax and the Customs and Excise Amendment laws which will both come into effect from 1 June 2019.

Key Points About The New Laws

Both laws will work together in dealing with administrative issues surrounding the implementation of the new carbon tax.

‘Carbon tax’’ according to the new law is a tax on the carbon dioxide (CO2) equivalent of greenhouse gas emissions.

A person is a taxpayer under the Act and is therefore liable to pay an amount of carbon tax calculated in respect of a tax period if that person conducts an activity in South Africa resulting in greenhouse gas emissions above the limit allowed under the Act.

**Cyril Ramaphosa, South African President**

Under the new law, taxpayers are expected to pay R120 ($8.3) per ton of carbon dioxide according to the amount of greenhouse gas emitted by the taxpayer. This rate would be increased from R120 to any amount depending on the prevailing market inflation in South Africa, plus an additional 2% for the tax period between now and December 31 2022. After 31st December 2022, the carbon tax rate would depend on the prevailing market inflation alone.

Those given some allowance from taxation under the new law include industrial taxpayers; taxpayers engaged in activities that cannot reasonably prevent the emission of carbon dioxide; taxpayers who are exposed to carbon dioxide emission by reason of their exports or imports activities; taxpayers that have implemented measures to reduce their greenhouse gas emissions in respect of a tax period (5% tax allowance); taxpayers that operated within a city limit for carbon dioxide emission even though they emitted the gas (5% allowance).

All taxes are to pay in accordance with South Africa’s yearly environmental levy prescribed under the Customs and Excise Act, 1964 (now 2019 as amended), for every tax period. Hence, the essence of the Customs and Excise Amendment Act is that a new levy known as the environmental levy (which is the carbon tax) is now to be charged by the South African customs on goods, whether imported into or manufactured in South Africa.

Who Is Going To Feel The Impact of the New Carbon Tax?

South African Motorists

With the introduction of the Carbon Tax Act South African motorists and car owners, as well as potential car buyers, will feel the greatest impact. Already, there is a planned fuel increase of 9 cents per litre on petrol and 10 cents per litre on diesel which will start from the 5 June 2019.

The new tax will also affect any substantial drop in petrol price, with South Africa’s Central Energy Fund’s data for mid-May, 2019 showing a 5 to 7 cents per litre increase (including the tax) in the price for the month of June for these both petroleum and diesel products.

The contributions of economic sectors to global greenhouse gas emissions. Credit- From the FAO report‘Greenhouse Gas Emissions from Agriculture, Forestry and other Land Use’ 2016.

Longer Impact

South Africans should also expect ‘trickle-down taxing’ on emissions that escape by accident in the petrol and diesel value chains from oil production, transport and venting systems which will likely be passed down to consumers. The heavily hit would be industries that rely heavily on carbon dioxide.

Global carbon dioxide emissions by sector from data from FAO 2017. Credit: Our World in Data

Enforcement?

Expect the South African Tax Commissioner to go all out to implement the new Carbon Tax law. This is because, under the new law, he must annually submit to South Africa’s Energy Minister a report showing the total amount of greenhouse gas emissions reported in respect of which taxpayers are liable for the carbon tax and the amount collected as a carbon tax.

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 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.