“The amendment seeks to discourage gambling and to deter a licensee from allowing illegal gaming,” the committee said in a report. “The amendment seeks to remove the use of credit cards to gamble or bet…and seeks to provide for other modes of payments which a player may use, that is mobile money transfer.”
Here Is What You Need To Know
The bill which seeks to repeal the Betting, Lotteries and Gaming Act of 1966 was introduced to police the betting industry which has seen massive growth over the last couple of years.
The biggest winners following this reversal are telcos and betting firms while the biggest losers are banks affected by the removal of the use of credit cards to bet.
African online gambling market share. Source: European Gaming and Betting Association
Under Section 60 of the Bill, online gamblers are not to bet anything less than KES 100 on any competition. The initial limit used to be KES 50, a big business opportunity for betting companies.
This boost is mostly associated with the fact that the lawmakers raised the minimum amount of an online gambling bet to KES 100 ($0.92).
This proposal would sound familiar to the British as it mirrors a similar decision made by the UK’s Gambling Commission earlier this year.
According to GeoPoll, 88% of gamblers in Kenya have once used their phone to place bets. Out of the 88%, 55% are gambling on their phone once a week or more. The report also goes ahead to show that 83% bet on football the most.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
The central African country of Cameroon wants to raise money from its 23 million phone users and it is doing so by way of taxes. A cascade of digital taxes, it may be called. After introducing Facebook ads tax, the country’s government has added mobile devices and application downloads to the list.
“A lot of people in this country don’t even have jobs. Many of them are working using their phones to make ends meet, and you want to take that away just because you can? Entrepreneurship isn’t fertile here (Cameroon) because you people (government) don’t do much for us to be creative. #EndPhoneTax,” a Twitter user who identifies herself as Becky tweeted.
Here Is What You Need To Know
By a directive jointly signed by the country’s Ministers of Finance and Posts and Telecommunications on March 13, 2020, applications downloaded from phones and tablets, for use on mobile phone devices are now subject to customs duties and taxes at a flat rate of 200 FCFA ($0.36)per application and per unit download, in accordance with the eighth article of the 2019 Finance Law.
Added to the application tax is a new way of paying customs clearance fees on imported mobile devices.
By the new approach, the burden of paying customs clearance fees now lies on the final user where there is a default by the importer.
The new measure, which also makes customs clearance mandatory for all telephones coming into the country from now on, was expected to officially come into effect on 15th October, 2020.
However, the plan now appears to have been put on hold following strong resistance from Cameroonian subscribers and mobile operators, who went online to protest against the measure using #EndPhoneTax.
“The telephone user has always paid the 33% tax. The Customs department has not created any new tax. The only issue is that we have changed the way the tax can now be paid. It’s now either physically (at points of entry into the country) or by electronic means…,” Guy Innocent Diffouo, a top Cameroonian Customs official said in a press conference in Yaounde on October 12.
The electronic payment platform to be manned by a company known as Artificial Intelligence Technology (ARINTECH) SARL alongside relevant Cameroonian agencies aims to force mobile telephone network providers in the country to configure their systems in such a way as to avoid any phones and tablets that have not been cleared from connecting to their respective networks.
New 19.25% Value-Added Tax (VAT) On Ecommerce Companies In Cameroon
Added to the wave of taxes above is also a new 19.25% VAT introduced under Cameroon’s new finance law. According to the country’s Ministry of Finance (Minfi), goods and services sold on Cameroonian territory through e-commerce platforms, as well as related commissions, are now subjected to VAT.
The implication of this is that online businesses would now have to pay 19.25% VAT, added to the 33% corporate tax and other additional taxes they would have to pay if they were companies.
The central African nation is a buoyant market for mobile phones and other mobile devices. There are more than 23 million mobile subscriptions in the country, representing about 90% of the total population. However, while mobile subscription is high, only about 6 million people, representing about 23.1% of the population have access to the internet. The country’s Directorate General of Customs has also disclosed that about four million telephones are imported into the country every year.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
Are you are media-focused startup in South Africa, most notably offering video-on-demand or music streaming services? Your attention is immediately needed.
On 9 October 2020, the South African Minister of Communications and Digital Technologies published the Draft White Paper on Audio and Audiovisual Content Services Policy Framework: A New Vision for South Africa 2020. Cabinet had approved the White Paper on 9 September 2020.
Stella Ndabeni Abraham, South African Minister of Communications and Digital Technologies
The White Paper sets out new mechanisms to regulate audio and audiovisual content services (“AAVCS”). In particular, the White Paper spells out that the current statutory definition of broadcasting services is too narrow and too platform-specific in its application to capture the range of new audiovisual content services that are now available online. The White Paper therefore seeks to address issues of regulatory parity with regard to on-demand content and user-generated content, and more.
The White Paper also proposes to change the limitations on foreign control of commercial broadcasting ownership. The current legislative framework prohibits a foreign firm from exercising control over a commercial broadcasting licensee by limiting financial interest, interest in voting share or paid-up capital to a maximum of 20%. Similarly, not more than 20% of the directors of a commercial broadcasting licence may be foreigners. The White Paper recognises that the regulatory environment for foreign direct investment is one of the key factors that is likely to influence the location decisions of foreign investors.
As a result and in an attempt to stimulate growth and development of the ICT sector, the White Paper proposes retaining the limitations in respect of foreign ownership of linear individual audiovisual content services (broadcasting services) but subject to them increasing to a maximum of 49% to stimulate investment. In the case of foreign firms from African Union (“AU”) member countries, the maximum of 49% should be capable of being waived so long as there is a reciprocal agreement between South Africa and the relevant AU country.
media regulations South Africa media regulations South Africa
The White Paper also proposes that the must carry regulations are no longer necessary in law and that legislation should allow the SABC to negotiate retransmission consent agreements on commercial terms with AAVCS in South Africa and internationally, subject to certain provisos.
Furthermore, the White Paper proposes that South African content quotas should remain in place for broadcasting services (including those online) with an emphasis on the need to continue to reinforce South African content and music in all genres and formats.
Finally, the White Paper also sets out a list of recommendations in respect of national sporting events to guide the regulation of the broadcast of these types of events.
Members of the public and interested persons are invited to submit their comments, input or written representation on the White Paper within eight weeks of the date of publication of the notice, being 30 November 2020 at 16h00.
Want to read more about the policy framework? Click here.
All written comments and enquiries should be directed to:
The Acting Director-General, Department of Communications and Digital Technologies
Physical address: Block A3, IParioll Office Park, 1166 Park Street, Hatfield, Pretoria Postal address: Private Bag X860, Pretoria, 0001 Email address: aacsedtps.gov.za
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
More than 337 unregulated digital mobile lenders and micro financiers have been barred from forwarding the names of loan defaulters to Kenya’s credit reference bureaus (CRBs). The CRBs say the number of firms allowed to blacklist defaulters with the bureaus has dropped to 2,254 in September from 2,332 in May last year.
CBK governor, Patrick Njoroge
Ban On Digital Lenders
According to the Central Bank of Kenya (CBK) in a statement released in March this year, digital and credit only lenders will no longer submit credit information on their borrowers to Credit Reference Bureaus (CRBs).
In the statement, CBK explained that the withdrawal is in response to numerous public complaints about misuse of the Credit Information Sharing System (CIS) by the lenders and particularly poor response to customer response.
“The withdrawal is in response to numerous public complaints over misuse of the CIS (credit information sharing) by unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints,” the CBK said in an earlier statement.
Under the new rules, only defaults above Sh1,000 will be shared with CRBs. Borrowers who had been blacklisted for lower amounts are now required to be cleared unconditionally.
Firms such as Tala and Branch were locked out at a time when the bulk of accounts negatively listed with the CRBs — Metropol, TransUnion and Creditinfo International — are linked to mobile digital borrowers.
In March this year, Kenyan Parliament considered a petition to launch investigations into the operations of digital money lending institutions over claims of exploitation of borrowers.
Kenya digital lending startups Kenya digital lending startups
Implications for Digital Lending Startups In Kenya:
This will continue to be a hard time for startups desiring to set up a money lending business in Kenya anytime soon. Without having the power to report customers for blacklisting to the country’s central credit information sharing center, it is only safe to say that their business model has become entirely a highly risky one.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
As part of efforts aimed at boosting food production and improving agriculture, the Senegalese government has ordered the removal of fixed electricity charges for rice producers. With this development, rice producers will soon no longer pay fixed charges to Senelec, the national electricity company. Macky Sall, the President of the Republic has indeed instructed his ministers of Agriculture and Energy to take measures to ensure that this charge is removed.
President Macky Sall
In Senegal, the President of the Republic, Macky Sall has instructed his ministers to abolish the fixed premium paid by agricultural producers to Senelec, the national electricity company.
“The Head of State asked the Minister of Energy and the Minister of Finance and Budget to ensure the abolition of the fixed premium on electricity, from pumping stations and rice fields, and to the exemption from non-recoverable VAT on inputs for the rice sector industry ”, we learned in the Council of Ministers press release.
The abolition of these premiums is a complaint introduced some time ago by rice producers in the Senegal River valley, whose motor pumps run on electricity. “What we can remember is that everyone has complained about the burden of the fixed premium to be paid regularly to Senelec by producers, even if the latter do not go into the countryside” , had confided last June , Mouhamadou Moctar, the governor of the region of Matam during a tour of the plantations.
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 knowled
Nigeria’s lack of foreign currency reserves may push the government into seeking to raise funds by selling a stake in state-owned Nigerian National Petroleum Corporation (NNPC). “They’ll want to raise the money,” says Steve Hanke, professor of applied economics at Johns Hopkins University in Baltimore. He points to the difficulty that even larger Nigerian companies are facing in obtaining foreign currency as evidence that the country’s FX reserves are lower than reported.
Steve Hanke, professor of applied economics at Johns Hopkins University in Baltimore
Nigeria has been forced into a series of currency devaluations this year. Its foreign-currency reserves held steady in September at $35.7bn. Hanke questions whether that figure is realistic. “They’re running out of FX,” he says. “They’re in a corner.”
Approval of Nigeria’s Petroleum Industry Bill would turn the NNPC into a limited liability corporation and open a new avenue for fund-raising by allowing the sale of a stake. President Muhammadu Buhari has sent the bill to the Senate, which, along with the House of Representatives, must give its approval.
The bill, which has existed in various versions since 2008, also proposes the creation of separate regulatory authorities for upstream, midstream and downstream operations. It would reduce the royalty rate from 10% to 7.5% for offshore fields producing up to 15,000 barrels per day.
An improved regulatory framework for upstream production is essential in a world which needs less oil. Multinationals with Nigerian petroleum projects which are still awaiting final investment decisions include Shell, Exxon, Chevron and Eni.
According to Hamish McArdle and Tom Edwards of the Baker Botts law firm in London, these projects would bring in $47.6bn of new investment and raise Nigeria’s current petroleum production by about 40%.
Obstacles
“Investors will not only be concerned with legacy but also expose risks, including moral hazard, which can only be mitigated by putting proper structures and corporate governance in place,” says Deji Olatoye, a partner at The Lodt law firm in Lagos. A minor stake of about 5% would do little to address moral hazard, he adds. A “substantial shareholding” would be needed to give “a level of control over governance.”
The Nigerian market is not deep enough to take on that sort of deal, says Olatoye. Focusing on a foreign sale will require putting better structures in place, which will be “beneficial ultimately” to the institution and even local investors, he adds. There are obstacles to the bill’s full implementation, says Khalil Woli, an energy analyst at CardinalStone in Lagos. These centre around the reluctance of exploration companies to shave off 10% of monthly net profit to the proposed Petroleum Host Community Fund (PHCF), says Woli.
According to a previous draft of the bill, the fund will be designated for developing economic and social infrastructure of communities in petroleum-producing areas. The government’s continued control of the new NNPC “may raise concerns of a likely continuation of the old practices, particularly weak accountability,” says Woli.
There are “vested interests in the Nigerian oil and gas industry that can hinder the implementation” of the legislation, says Moses Ojo, chief economist at PanAfrican Capital Holdings in Lagos. These include the NNPC’s bureaucratic structure and regional loyalties, he says.
Still, Woli adds, the bill is likely to support a shift to free market setting of gasoline prices. Every downstream player including the NNPC will able to operate on “the same level playing field,” he says.
Political Will
The long-term decline in Nigeria’s foreign currency reserves over the last decade has not been transparent, leading to questions over what became of some of the cash, says Hanke. He sees no sign of any institutional improvements to give confidence that the proceeds from a NNPC sale will be clearly accounted for. “The money might not even go into the central bank,” he says.
The only way to strengthen Nigeria’s institutions, Hanke argues, is for the currency to be pegged to the US dollar. That, he argues, would provide discipline as it would prevent the fiscal system from borrowing from the central bank.
“Real political will be required to get the bill passed and to implement it,” says Olatoye. The current government will likely be approaching if not exceeding the first half of its maximum second term, and since the second half of the term in Nigeria is typically occupied by the politics of election and transition, this may affect implementation, he argues. “Only a new government with a fresh mandate will succeed in kick-starting implementation.”
Bottom line
Raising money through a NNPC stake sale will at best be a short-term fix unless Nigeria’s institutions are strengthened.
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
The Tunis Stock Exchange has finalized plans to create a digital trading exchange intended to finance labeled startups. This project, which will be carried out with the support of the German International Cooperation Agency (GIZ), is part of the Startup Act, which constitutes a legal framework dedicated to Startups and supported by the Tunisian Government, affirms the Managing Director of Securities Exchange (BVMT), Bilel Sahnoun.
Managing Director of Securities Exchange (BVMT), Bilel Sahnoun
“Through this project, the BVMT seeks to contribute to the development of Startups’ activities and their integration into the country’s economic fabric by providing them with solutions to the financing problem in order to help them consolidate their predisposition to create added value. and increase their employment capacity, ”Sahnoun said.
Here Is What You Need To Know
In a statement to the Tunisian Press Agency, Sahnoun explained that this project, the reflection of which was initiated in early 2020, will use new Blockchain technology.
He also explained that the digital stock market will be carried out in four sequential steps. It is about the execution of the action plan of this project which began with the realization of an operational benchmark, the second stage will relate to workshops with the actors, the operators and the interveners concerned by this project and the ‘’ identification of the needs necessary for the success of the latter (project).
“The overall cost of the project and the related details will be finalized and calibrated during this stage,” he explained.
The third step concerns the launch of the terms of reference of the project, while the fourth will relate to the deployment of the Digital Exchange project and its implementation.
The objective sought is to guarantee the success of this project, which should constitute a benchmark by targeting a population of innovative issuers, underlines Sahnoun, adding that “the digital stock market is intended for informed investors who seek profitability in the diversification of risks. using innovative technology ”.
According to the official, the Tunis Stock Exchange also wants to bring innovation and consolidate its role in the Tunisian financial system and in the economy of the country in general.
The Tunis Stock Exchange ‘s latest plans for startups in Tunisia is one of the growing benefits of Tunisia’s newly passed Startup Act
For Sahnoun, the startup’s stock market listing can also be the best medium for advertising and communication at the local and even international level.
“The scholarship reflects the success of the startup’s Business Model and support for carrying out the second or third fundraising necessary to support its development,” said the manager.
It is also a question of maximizing the value of the sale of some or all of the stakes of the initial investors in the startup in a transparent and regulated market, he added.
According to the annual report of the Startup Act in Tunisia 2019- / 2020, the labeled startups, whose number has reached 248, generated a cumulative turnover, in 2019, of 66 million dinars, of which 72% is made on the Tunisian market. All of the 248 labeled startups employ 2,829 people (April 2020), including founders, with an average of 11 people per startup.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
Egypt is pushing for progressive legislations in support of its investors. The country’s Board of Directors for General Authority for Investment and Free Zones (GAFI) has approved new a regulation permitting foreign investors to obtain residency for 5 consecutive years, with the option to renew for similar periods throughout their projects.
parliamentary speaker Ali Adel-Aal
Here Is What You Need To Know
GAFI is Egypt’s chief governmental authority involved in regulating and attracting investment in the country.
According to GAFI CEO Mohamed Abdel Wahab, the new controls will activate the Investment Law, which permits investors to secure residency depending on the nature of their business, the number of workers employed, the size of their capital, and the location of their work activity.
Egypt is a small open economy with many sectors dependent on foreign trade and heavy FDI inflows. According to the International Monetary Fund (IMF), Egypt is the Middle East and North Africa (MENA) region’s only economy that is forecasted to expand in 2020. Source: Daily News Egypt
Egypt foreign investors residency visas Egypt foreign investors residency visas
The board’s approval comes as part of the authority’s efforts to provide Egypt’s workforce with more job opportunities and secure foreign investment in sectors targeted by the state for economic development.
Earlier this year, a new law was passed scrapping the imprisonment of investors over fears that imposing jail terms on businessmen affects investment in the country.
“I will never allow the imprisonment of businessmen involved in financial violations,” parliamentary speaker Ali Adel-Aal was quoted as saying.
In December, 2019, Egypt’s cabinet has also approved five requirements to grant citizenship to foreigners by investment in the country’s economy, per Law №90 of 2019, a law recently approved by the Parliament.
Under the new law, there are five main conditions of eligibility for Egypt ‘s citizenship by investment, each independent of the other. The conditions include:
Either purchasing state-owned or public juridical person-owned property valued at $500,000 or more; or
Establishing or partnering in an investment project with $500,000 or more.
Other cases include depositing $750,000 through direct wire transfer from abroad into a special Central Bank of Egypt (CBE) account and to be retrieved in Egyptian pounds after five years without interest;
Or depositing $1m through direct wire transfer from abroad in a special CBE account, and to be retrieved in EGP after three years without interest.
The fifth case is to deposit $250,000 non-refundable, through a direct wire transfer to the CBE.
The cabinet approved the establishment of a special unit to look into citizenship by investment applications.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
In Ethiopia, there is only one telecommunication company, called Ethio Telecom, although plans have been on since October last year to allow private companies to take part in the market. While Ethio Telecom is waiting for that to happen, it is adding banking via mobile money to its range of offers. After series of negotiations and deliberations, the National Bank of Ethiopia (NBE) has finally granted a license to the company to start mobile money service in the east African country.
CEO of Ethio Telecom, Frehiwot TamiruMobile Money statistics in 2019 for Sub-Saharan Africa. Source: GSMA
Late To East Africa’s Booming Mobile Money Market?
Despite being the second most populous country in Africa with a population of more than 109 million, only about 33.86% of Ethiopian adults has formal accounts at financial institutions in Ethiopia, compared to the neighboring Kenya with over 82%.
In 2019, the Global System for Mobile Communications (GSMA) declared East Africa number 1 in the world in terms of transaction volume and value of mobile money. With more than 102 million active accounts, generating more than 17.1 billion transactions — an unmatched $293.4 billion in value and a 24% increase from 2018 — the region is the highest of any other sub-regions in the world. Sadly, none of these figures included Ethiopia.
It is therefore little wonder that a 2018 report by the GSMA described Nigeria, Ethiopia and Egypt, home to a combined adult population of over 242 million, as Africa’s mobile money sleeping giants.
Ethiopia’s low rate of mobile money usage could be attributed to the rigid regulatory walls that have ensured monopoly and lack of innovation. Telecommunication, aided by enabling legislations, has particularly driven the widespread adoption of the relatively new financial service type across Africa.
Safaricom’s M-Pesa, recently acquired by Vodacom, accounted for 655.95 million out of the 810.9 million mobile money transactions recorded in Kenya in the third quarter of 2019 alone. In Uganda, MTN enjoys over half the market share for mobile money.
“The reasons for this vary,” notes GSMA in its report about why Nigeria, Egypt and Ethiopia remain the continent’s sleeping giants when it comes to mobile money usage in Africa. “…In Ethiopia, a strictly regulated telco, restrictions on competition, lack of internet connectivity, and low levels of consumer trust and financial literacy have created barriers to uptake and market entry.”
Number of mobile money users as a percentage of the population of the relevant African country…Source: African Payment Solutions
Finally Loosening The Regulatory Barriers And Joining The League
In April 2020, the National Bank of Ethiopia issued a regulation called Licensing & Authorization of Payment Instrument Issuers. For the first time in Ethiopia’s history, the regulatory regime will allow mobile money transactions. However, there is a caveat: any company interested in the new financial service regime must set up a trust account with a deposit money bank in Ethiopia.
“As part of the application process,” the directive read, in parts, “the National Bank, may request for a preliminary meeting and demonstration of the intended payment instrument to be issued, its related services, products as well as operation. Based on requests made and written approval of the National Bank, a payment instrument issuer may be allowed to provide cash-in and cash-out; local money transfers including domestic remittances, load to card or bank account, transfer to card or bank account; domestic payments including purchase from physical merchants, bill payments; over-the-counter transactions; and inward international remittances services.”
The regulation has also opened up the country’s financial services sector to include that a licensed payment instrument issuer may, with the relevant agreement with regulated financial institutions and pension funds, be allowed to provide micro-saving products; micro-credit products; micro-insurance products; or pension products in the country.
In any case, banking, insurance, brokerage services, and legal consultancy still remain off limits for foreign investors, according to a new set of investment rules published on the Ethiopian Investment Commission’s website.
The implication of this is that the two telcos to be selected from the ongoing licensing process in Ethiopia —two out of either Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom SA, Liquid Telecom, Snail Mobile, and Global Partnership for Ethiopia, a consortium of telecom operatorscomprising Vodafone, Vodacom, and Safaricom — will not be allowed to engage in mobile money services.
“When the telecom sector is liberalised,” said CEO of Ethio Telecom, Frehiwot Tamiru, at a consultative meeting Ethio Telecom held with IT and startup companies on the on-going national telecom reform program, “there are guiding policies and directives. We are not opening up completely.”
Like in Nigeria, mobile money operations in Ethiopia will solely be regulated by the National Bank of Ethiopia and not the Ethiopian Communication Authority (ECA), even though telcos may be involved.
“Mobile money service involves two sectors — both the telecom and banking sector,” argued Balcha Reba (Eng.) director general of the Ethiopian Communication Authority. “Since it is a financial service it has to be regulated by the NBE. But, it also involves the telecom sector. Companies would provide the service using the telecom infrastructure; so ECA should also look at the telecom side. So ECA, NBE and Ethio telecom have to discuss the matter.”
And since the matter is yet to be discussed, the NBE remains the sole regulatory authority for mobile money operations in Ethiopia.
The Ethiopian Ministry of Finance (MoF) is also in the process of partially privatising Ethio telecom. To that effect, the ministry has engaged Deloitte Consulting as its transaction advisor to source a strategic partner that would acquire 40 percent stake in Ethio Telecom. However, it is not yet clear if the international firm that would acquire stake in Ethio Telecom would indirectly be permitted to engage in mobile money business.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
The coronavirus has not ended but the Central Bank of Kenya appears to be running out of patience. Once again, if you had borrowed money from any of the country’s commercial banks and default in repaying, your name risk being published in the public domain, in this case, the country’s Credit Reference Bureaus (CRB). The Bureaus had been on months-long break in compliance with the directive of the Central Bank of Kenya to cushion borrowers against the impact of the coronavirus, but is now back.
CBK governor, Patrick Njoroge
“ In terms of the measures that are ending, that I think is clear, so from October 1 the banks will begin accessing their borrowers, then you will have three months to regularize what you were not paying,” said Njoroge during the post MPC briefing.
“The point here is to just emphasize that we are going back to the normal operations and that is where we will be come October 1,” he added.
Here Is What You Need To Know
CBK governor Patrick Njoroge said the measures that were implemented by the banks 6 months ago to cushion distressed borrowers from the harsh economic environment occasioned by the coronavirus pandemic will end today.
CBK announced the suspension of CRB listing for defaulted loans in April 2020, with the relief from being blacklisted lasting for six months up to September 30.
This was part of the stimulus packaged announced by the bank regulator on March 25 to cushion borrowers where many Kenyans were facing pay cuts while about 1.7 million were issued with redundancy notices during the pandemic according to a survey by the Kenya National Bureau of Statistics.
On September 29, the Central Bank of Kenya announced that banks have restructured loans worth Sh1.12 trillion.
This represents 38 percent of the total banking sector loan book of Sh2.9 trillion by the end of August.
Personal and household loans topped the list with Sh271 billion reviewed since March.
Other sectors such as trade, manufacturing, real estate, and agriculture were offered relief of loans that amount to Sh849.9 billion.
According to the Central Bank of Kenya (CBK) in May, 2020, digital and credit only lenders will no longer submit credit information on their borrowers to Credit Reference Bureaus (CRBs).
In the statement, CBK explained that the withdrawal is in response to numerous public complaints about misuse of the Credit Information Sharing System (CIS) by the above-mentioned lenders and particularly poor response to customer response.
In March this year, Kenyan Parliament considered a petition to launch investigations into the operations of digital money lending institutions over claims of exploitation of borrowers.
Implications For Digital Lending Startups In Kenya:
This continues to be a hard time for startups desiring to set up a money lending business in Kenya anytime soon. Without having the power to report customers for blacklisting to the country’s central credit information sharing center, it is only safe to say that their business model has become entirely a highly risky one.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
