IFC, a member of the World Bank Group, has announced an investment of up to $100 million in Nigeria’s Zenith Bank Plc to help it increase support to clients and companies whose cash flows have been disrupted by challenges caused by the COVID-19 pandemic.
Ebenezer Onyeagwu, the Group Managing Director/CEO of Zenith Bank
“IFC’s support is essential and will help us respond to challenges resulting from the COVID-19 pandemic. It will allow us to support compelling export initiatives and trade financing for critical goods and materials, especially for the medical and pharmaceuticals sectors. Our partnership with IFC is strong and we are committed to its environmental, social, and governance (ESG) requirements,” Ebenezer Onyeagwu, the Group Managing Director/CEO of Zenith Bank, said.
Here Is What You Need To Know
This investment to Zenith Bank Plc is IFC’s l first investment in Africa through its COVID-19 fast-track financing support package.
IFC’s loan to Zenith is part of its $8 billion global fast-track financing package, announced in March to support business activity and preserve jobs in the face of COVID-19. Close to 300 clients have requested support globally.
The funding will help Zenith, an existing IFC client and Africa’s sixth-largest bank, to overcome challenges resulting from ongoing limited access to foreign currency, working capital, and trade funding.
“IFC’s support for Nigeria’s banking sector will help keep the wheels of Nigeria’s economy turning at a time when it is facing a major challenge from COVID-19. Our experience from past shocks, including the global financial crisis in 2008, has taught us that keeping companies solvent is key to saving jobs and limiting economic damage,” Eme Essien Lore, IFC’s Country Manager in Nigeria, said.
With the new funding, Zenith will support dozens of businesses in Nigeria’s health, pharmaceuticals, food, and trading sectors, allowing them to strengthen operations, maintain employment, and access critical imports of goods, commodities, and raw materials during these challenging economic times.
Zenith Bank has more than 400 branches in Nigeria and serves over 9 million corporate and individual clients within its global footprint. IFC’s overall portfolio in Nigeria stands at $1.3 billion, in sectors including manufacturing, financial services, infrastructure, and technology.
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.
Mauritius has always been at the forefront of promoting crypto-backed assets in Africa. The country’s Financial Services Commission (FSC), the integrated regulator for the non-bank financial services sector of Mauritius, has announced a framework aimed at ensuring more regulatory certainty with regards to security token trading systems in the country. The regulatory body stated that the move will enable the implementation of a common set of standards for the licensing of Security Token Trading Systems in Mauritius. The FSC released a 15 — page document outlining the new standards coupled with the press release on Monday.
Dhanesswurnath Thakoor, the Chief Executive of the FSC
“As part of our core strategy, the FSC is aiming at positioning Mauritius as a regional hub of sound repute in the field of Fintech. The publication of a Guidance Note on Security Tokens Offering (STO) and Security Tokens Trading Systems is a another stepping stone in building an open and transparent regulatory regime for Fintech in Mauritius. We already have a growing interest for these specific licences and are expecting to receive several applications in the upcoming months,’’ Dhanesswurnath Thakoor, the Chief Executive of the FSC stated about the new guidelines.
Here Is What You Need To Know
Security Token Trading Systems Are Now Eligible To Be Issued Licenses In Mauritius
This is record-breaking in a continent that is highly skeptical of cryptocurriences and blockchain technology. Under Section 7.1 of the new regulation, any person wishing to establish, maintain or operate a system for the trading of Security Tokens in Mauritius shall apply for a Trading Securities System licence. The implication of this is that all trading in security tokens in Mauritius would require a license, going forward.
However, such token trading companies must at all times, be required to have and maintain a minimum unimpaired capital of 35 million rupees or an equivalent amount ($880,000).That is, the trading system must all times have $880,000 in its accounts to be considered credit worthy. Under the new regulation, the capital must be held in real currency (fiat) as against cryptocurrencies in a licensed Mauritian bank.
The token trading system must also at all times be managed and controlled from Mauritius. The implication of this is that the new trading system would not be available to investors wishing to register their securities token trading companies in Mauritius, while having their central administration and management abroad. Therefore, such companies would be regarded as resident in Mauritius for purposes of taxation; and it should be noted that in Mauritius, they are subject to corporate tax at 15%. Tax advantages for such companies also include that there is no capital gains tax and also no withholding tax on dividends, interest, and royalties paid or estate duties on their earnings.
Are There Penalties For Not Obtaining License To Operate?
The regulation did not specifically state the penalties for non-obtaining of licenses, but under Section 22 of the country’s Securities Act 2005 (as amended), in view of which the present regulation was made, any person who fails to obtain such licenses shall commit an offence and shall, on conviction, be liable to a fine not exceeding one million rupees ($25,000) together with imprisonment for a term not exceeding 8 years.
What Are Expected Of A Token Trading System Under The New Regulation.
Under the new regulation, token trading systems must:
Ensure strict adherence to all applicable laws, regulations and codes relating to Money Laundering and Terrorist Financing.
Comply with the Data Protection Laws applicable in Mauritius, including seeking the approval of the data subject before sending personal data outside Mauritius or keeping personal data on servers outside Mauritius.
Engage a registered custodian for the custody of their digital assets.
Get clearance certificates from Mauritius’ Data Protection Office as to the capacity of its IT infrastructure and must also demonstrate adequate office premises.
Appointment of a person to act as Chief Technology Officer (“CTO”) or any other relevant designation and who shall be responsible for establishing, maintaining and overseeing the internal cybersecurity architecture of the company.
Publish trading data daily and submit it for review by Financial Services Commission.
Be managed by a board composed of a minimum of 3 directors, of which at least — (i) 30 per cent shall be independent directors; and (ii) one shall be resident in Mauritius. Hence, this gives foreigners a chance of floating an entity in Mauritius, as long as they have an on-ground, a director who would oversee the daily operations of the company.
What Are The Major Weaknesses Of The New Regulation?
One fundamental weakness of the new legislation is that it does not adequately protect investors trading on the systems. The regulation specifically states that any investment in Digital Assets is at the investors own risks and that they are not protected by any statutory compensation arrangements in Mauritius.
From all indications, this looks like the government of Mauritius is only attempting to attach legitimacy to the securities systems trading on tokens, and may not be interested in fully regulating the market; although they still retain the power to revoke licenses and investigate fraudulent practices. This may be a way of encouraging the highly volatile tokens market to thrive.
In Simple Terms What Does This Whole Regulation Mean For Ordinary Mauritians?
Basically, the new regime allows a new security token trading systems to become eligible for an FSC license in Mauritius. Now, a business can put a security token up for sale in an offering, an “STO,” as well as operate a trading house in Mauritius.
This is how a security token trading works. Image source: thebitcoin.pub
Unlike the IPO process, where funds are raised by companies through issuing shares to accredited investors, with STOs, tokens that represent a share of an underlying asset are issued on the blockchain to accredited investors. These can be shares of a company but (because of tokenization) can really be of any asset that is expected to turn a profit, including a share in the ownership of a property, fine art, investment funds, etc.
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
Nearly four years after Nigeria ’s broadcast media code (6th edition) was published in 2016, the country’s National Broadcasting Commission (NBC), in charge of regulating and controlling its broadcast industry has released new amendments to the code. The newly introduced changes are sweeping in their ramifications. NBC says the new amendments were put together after intense deliberations with relevant stakeholders within the Nigerian broadcast media industry.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed
“The amendments of the Code make provisions for local content in the broadcast industry,’’ the code reads. “It also makes provisions for increased advertising revenue for local broadcast stations and content producers. It significantly creates restrictions for monopolistic and anti-competitive behaviour in the broadcast industry in Nigeria.’’
For investors and media startups within the Nigerian broadcast media space, this is a great call for concern. Recall that the country’s Minister of Finance, Zainab Ahmed, had also issued the Companies Income Tax (Significant Economic Presence) Order, 2020 in pursuance of her power to do so under an amendment to the country’s Finance Act 2019. By the terms of the order, a 7.5% VAT rate is imposed on a foreign entity which offers digital services and which has Significant Economic Presence in Nigeria.
According to the Nigerian Bureau of Statistics, Information and Technology, consisting of broadcasting; motion pictures; sound recording, and music production; publishing; telecommunication and information services; contributed 10.68 per cent to Nigeria’s GDP in 2019 alone. Broadcasting makes up about 80.4 % of this number, followed by motion pictures, music and sound recording and production at 11.9%. Against this background, it has become necessary to assess the implications of the new rules for investors and startups playing in that space.
Online Radio, TV and Streaming Services In Nigeria Now Need Licenses To Operate And Music Artistes Now Have More Of Their Rights Protected
License to operate
This is a sweeping amendment to the previous rules which were entirely silent on online broadcasting. The previous rules only regulated physical apparatus and premises used for broadcasting while the newest amendment to the rules includes all persons wishing to operate web/online broadcasting services within the Nigerian territory. The implication of this is that all online broadcasting or streaming services existing in Nigeria must not only be registered and licensed by the NBC, but must also comply with any programming standards issued by the NBS. Thus the commission, in totality, is bringing all forms of online broadcasting within its control. In the event of breach of the new rules, the online broadcast service shall be blocked, taken down or shutdown completely, the rules state.
New Rights For Musicians
Even though the Nigerian Copyrights Commission is already empowered to be responsible for all matters related to copyrights in music and sound recording in Nigeria, the new rules mandate all broadcast services, online or not, to obtain permission and clearance for use and properly compensate owners of musical works. Failure to comply with this may result in warning and then suspension of broadcast. It is important to note that while the violation of rights by the musical artiste under the Nigerian Copyrights Act could amount to both civil and criminal liabilities for the offender, especially where commercial use is made of the work, violation of the NBC code could lead to suspension of the broadcaster’s license to operate until rectification of the violation is made.
One obvious implication of the new rules is that, if implemented, the number of online broadcast services in Nigeria may drastically reduce; and a major streamlining of music catalogues by broadcast media to meet their budget may be also seen. This would most likely be a major blow to Nigeria-based online broadcast media startups. Currently, it takes between $26,000 to $52,000 to process a TV or radio license in Nigeria, a license which must also be renewed every 5 years. It is hoped however that these measures do not become counter-productive as to promote international media startups at the expense of local ones. Whether online broadcast media would be regulated or not has always been a matter of time, however it is only appropriate that new rules establish new licensing fee schedules and lower licensing fees for broadcast media of such nature. The new rules also failed to classify or define the range of online broadcast media contemplated — online radio, music or podcast streaming? Any other contrary position may most likely be misunderstood by Nigerians as an attempt to limit their freedom of speech.
Nigeria ‘s new broadcast media rules may make or mar its media and entertainment industryInformation and Technology contributed 10.68 per cent to Nigeria’s GDP in 2019 alone.
Deleting of The Rights of Exclusivity To Broadcast Contents—A Major Blow To Exclusive Content Owners And Creativity
The new amendment entirely deleted provisions on public broadcasting in Nigeria and replaced it with anti-competition rules. By the terms of the new rules, broadcast media in Nigeria are no longer allowed to enter into broadcasting rights acquisition either in Nigeria or anywhere in the world to acquire any broadcasting rights in such a manner as to exclude persons, broadcasters or licensees in Nigeria from sub-licensing the same.
“Any such agreement shall be void,” the rule stated.
The new rules proceeded to give the NBC large discretionary powers to determine whether an agreement restrains competition and creates monopoly, including but not limited to deciding whether the broadcaster has a large market share. The new rule then states that such broadcaster in a dominant position must cease, on being ordered by the NBC, from any conduct that threatens competition in the Nigerian broadcast space.
The implication of the above rules is reduced revenue for the broadcasters; and a possible severe strain on the resources of broadcast media startups which usually, by the nature of their business, require substantial workforce, pay tax to government and renew their licenses. This is also a major turn-off for investors looking to invest in the Nigerian broadcast media startup space. The new rules would also stifle creativity and innovation and encourage mediocre contents especially as there is no longer reward for hard work.
However, the commission may likely be overstepping its regulatory boundaries. Notwithstanding that the law by which it was established [the National Broadcasting Commission Act (1999 as amended)] authorises it to regulate and control the broadcast industry in Nigeria, and consequently establish and issue a national broadcasting code as well as set standards with regard to the contents and quality of materials for broadcast, the law does not however permit it to invade the market, and on its own discretion decide what market competition and monopoly entails. The newly created Federal Competition and Consumer Protection Commission, which also has a tribunal deciding on matters bordering on competition and consumer protection in Nigeria, the decisions of which are further appeal-able at the country’s court of appeal, is specifically mandated to treat issues related to trade competition in the country. Furthermore, the right to grant exclusive or non-exclusive licenses to copyright in broadcast materials are protected rights under the Nigerian Copyrights Act, and also inherently protected under the Nigerian Constitution. It only could be hoped that the commission has not under the guise of regulation arrogated to itself the power to make laws.
Nollywood is one of the strong players in Nigeria ‘s broadcast media space the new rules may entirely change their course.
Broadcast Media Startups Must Now Allocate 20% Of Their Weekly Broadcast Hours To Public Service And Must Maintain 75% Local Content On Character
This is the most significant change introduced by the new rules. Going forward, all broadcast media in Nigeria must ensure that they allot a minimum of 20% of their weekly broadcast hours to public service programmes on emergencies, current trends and issues.
“Such programmes shall be given prominence during family times and shall not be less than 120 minutes per transmission day,” the rule reads, in part.
With this, the rules may be making reference to numerous radio and television stations targeting specific audience, or trying to avoid discussing some of Nigeria’s controversial public trends in a country that ranks 115 out of 180 countries on the World Press Freedom Index.
Also curious is the fact that public broadcast media have been completely excluded in some parts of the new rules. But this is not the first time this is happening. For instance, while private/commercial broadcast media licenses go for between $26,000 to $52,000, licenses for broadcast media stations owned by government go for between $2,500 to $13,000.
Under the new rules, broadcast media must also ensure that at least 75% of their production workforce are Nigerians.
Most importantly, the new rules further state that subscription-based services shall ensure that a minimum of 15% of their channel acquisition budget is spent on channels on local content.
Premium Sports and News Content Now On Wholesale
Instead of granting broadcast rights to premium sports and news content exclusively to select Pay TV platforms of their choice, the commission has now mandated all such rights to be placed on wholesale, buy-able by any Pay TV platforms (broadcaster) provided a request in writing to that effect has been made and on non-exclusive basis. Failure to do so will result in the payment of a fine of ₦10,000,000 ($26,000). While this may encourage more players in the industry, especially innovative startups, big players may likely cut down on their investment in the Nigerian market if their earnings are substantially affected, especially as most of the premium sports and news broadcasters in Nigeria are headquartered outside the country.
Another significant introduction in this regard is the new requirement that no prime foreign sports content shall be transmitted in the Nigerian territory unless the owner of such content has also acquired prime local sports content of the same category with a minimum of 30% of the cost of acquiring the prime foreign sports content. Simply put DSTV, a leading prime foreign sports broadcaster in Nigeria for instance, will not be allowed to show the English Premier League unless it acquires rights to and broadcasts 30% equivalent of the Nigerian Professional Football League.
Bottom Line:
If allowed to stand, this may be a major disruption in the Nigerian broadcast media industry where government-owned broadcast media are generally seen as out of touch with modern trends and technologies and foreign media outlets are accepted as more credible, trustworthy and contemporary. On their own, underfunded startups are still finding it difficult to stick out of a sector that occupied more than 10% of Nigeria’s gross domestic product in 2019 alone. Perhaps, Nigeria needs to encourage more innovations in its broadcast media space rather than its current protectionist policies. This it can do by setting minimal rules that will support its nascent startup ecosystem (that houses some of its more than 55.4 percent of unemployed youth population) to thrive.
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.
Under Kenya ’s new draft 2020 Value Added Tax (Digital Market Supply) Regulations, digital marketplaces (ecommerce websites) that fail to pay Value Added Tax pursuant Section 5(8) of the country’s Value Added Tax Act, 2013 shall, in addition to the penalties prescribed under the law, be liable to restriction of access to their websites in Kenya until such tax is paid. With these regulations, Kenyan Revenue Authority (KRA) is targeting ecommerce platforms with taxes to fund the Sh3 trillion ($28 billion) 2020/2021 budget. The country’s finance bill 2020 proposes to introduce a 1.5 per cent tax on the gross transaction value of digital services as well as levy VAT at 14 per cent on a number of goods that are currently exempt.
“A digital marketplace supplier from an export country who is required to register under the simplified VAT registration framework shall apply to the Commissioner for registration within thirty days from the publication of these regulations,” the regulation reads in part.
Here Is What You Need To Know
Under the regulation, any person offering taxable services through a digital marketplace (ecommerce) shall be required to register for Value Added Tax in Kenya.
Which Digital Marketplaces (Ecommerce) Are To Pay Tax?
The taxable services made through a digital marketplace shall include electronic services under Section 8(3) of the Value Added Act and: –
Downloadable digital content including downloading of mobile applications, e-books and movies;
Subscription-based media including news, magazines, journals, streaming of TV shows and music, podcasts and online gaming;
Software programs including downloading of software, drivers, website filters and firewalls;
Electronic data management including website hosting, online data warehousing, file-sharing and cloud storage services;
Supply of music, films and games;
Supply of search-engine and automated helpdesk services including supply of customized search-engine services;
Tickets bought for live events, theaters, restaurants etc. purchased through the internet;
Supply of distance teaching via pre-recorded medium or e-learning including supply of online courses and training;
Supply of digital content for listening, viewing or playing on any audio, visual or digital media;
Supply of services on online marketplaces that links the supplier to the recipient, including transport hailing platforms;
Any other digital marketplace supply as may be determined by the Commissioner.
What Criteria Are To Be Used In Determining Whether The Digital MarketPlace Is Required To Pay VAT?
Under the new regulations, a digital services company (Ecommerce) rendering taxable services through a digital marketplace shall be required to register for VAT in Kenya if:
(a) the online services are offered by a business located outside Kenya to an end user in Kenya in business-to-consumer transactions.
(b) the business entity is doing business in Kenya and any of the following situations occur:
(i) the user of the services is in Kenya; or
(ii) the payment made to the business entity staying outside Kenya by the user, for the rendering of the internet-based services, starts from a Kenyan bank registered or authorized in the country; or
(iii) the user of the internet-based services, even though he/she resides outside Kenya, has business, residential or postal address in Kenya.
In any case, where the business entity staying outside Kenya to offer the business-to-customer services is not able to register for tax under the simplified Kenyan VAT registration framework, it shall appoint a tax representative to account for the VAT on their digital services.
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 preparation for the scramble for the budding Africa retail logistics market, global logistics firm DHL has acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup. Link Commerce offers a white-label solution for doing online-sales in emerging markets. With their platform, retailers can plug into the company’s e-commerce platform to create a web-based storefront that manages payments and logistics. With the investment one of the world’s largest delivery services looks to build a broader client-base globally using a business built in Africa.
Link Commerce CEO Chris Folayan
“DHL is trying to get their hands more into global e-commerce…across the world and they figured our platform was a good way to do it,” Link Commerce CEO Chris Folayan was quoted as saying. Folayan originally founded MallforAfrica, which paved the way for Link Commerce. DHL’s investment in the company — the amount of which is undisclosed — has roots in collaboration with Folayan’s original startup. MallforAfrica began a partnership with DHL in 2015 and launched DHL Africa eShop in 2019. The sales platform is powered by Link Commerce and has brought more than 200 U.S. and U.K. sellers — from Neiman Marcus to Carters — online to African consumers in 34 countries.
Similar to MallforAfrica’s model, Africa eShop allows users to purchase goods directly from the websites of any of the app’s partners. For the global retailers selling on Africa eShop, the hurdles that held back distribution on the continent — payments, currency risk, logistics — are handled by the underlying Link Commerce operating platform. “That’s what our service does. It takes care of that whole ecosystem to enable global e-commerce to exist, no matter what country you’re in,” Folayan said. Link Commerce was built out of Folayan’s startup MallforAfrica.com, which he founded in 2011 after studying and working in the U.S.
A common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home — highlighted a gap between supply and demand for the continent’s consumer markets. With MallforAfrica Folayan aimed to close that gap by allowing people on the continent to purchase goods from global retailers directly online. The e-commerce site went on to onboard over 250 global retailers and now employs 30 people at order processing facilities in Oregon and the UK. MallforAfrica’s Africa eShop expansion put it on a footing to compete with Pan African e-commerce leader Jumia — which went public on the NYSE in 2019 — and China’s Alibaba, anticipated to enter online retail on the continent at some point.
The Link Commerce, DHL deal won’t change that, but Folayan has shifted the hierarchy of his businesses to make Link Commerce the lead operation and Africa one market of many. “We changed the structure. So now Link Commerce is above MallforAfrica and MallforAfrica is now powered by Link Commerce,” Folayan explained adding that “right now the focus is on Africa…but we’re taking this global,” he added. Folayan and DHL plan to extend the platform to emerging markets around the world, where other companies may look to grow by wrapping an online store, payments, and logistics solution around their core business. That could include any large entity that wants to launch an international e-commerce site, according to Folayan. “Link Commerce is focused on banks, mobile companies, shipping companies and partnering with them to expand globally,” he said. That’s a big leap from Folayan’s original venture, MallforAfrica.com. What began as a startup to sell brand name jeans and sneakers online in Africa, has pivoted to a global e-commerce fulfillment business partially owned by logistics giant DHL.
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
Although much of Africa ’s fundraising has gone to Nigeria in the past two years, a new report by the India-based global startup data firm, StartupBlink, code-named StartupBlink Ecosystem Rankings Report has ranked South Africa, Kenya and Rwanda as the continent’s top startup ecosystems.
Eli David, CEO of StartupBlink
“Our algorithm results took hundreds of hours of calibration and conversation. The amount of thought and effort invested into the 2020 edition of the rankings makes us confident of their quality and uniqueness,” says Eli David, CEO of StartupBlink.
Here Is What You Need To Know
According to the report, globally the US has maintained a substantial ranking gap from all other countries, the big four also includes the UK, Israel, and Canada. The only change that differs from 2019 in the Big 4 is between Israel (3rd) and Canada (4th).
According to the report also, the highest placed country new to the top 100 is Taiwan, ranking 30th; an impressive position for a debut on the countries list. A few significant jumps into the top 40 have been made by European countries, with Norway (33), Slovenia (35), Latvia (36), and Croatia (39) going up 13, 33, 9, and 11 places respectively.
As for African countries, the report noted a disappointing year for both Kenya (62) falling 10 places and Nigeria (68) dropping 12. Also, Egypt and Ghana both fell in the rankings to 81st and 85th respectively.
The top African startup cities however remain Nairobi, Kenya; Lagos, Nigeria; and Cape Town, South Africa.
StartupBlink Global Ecosystem Report 2020 (Top African countries)
Which Criteria Were Used To Decide Who Gets What Position?
According to the report, criteria such as the quantity, quality and the business environments of startup ecosystems were used in scoring the countries. On quantity, the report noted that each ecosystem must not only have startups but a number of other supporting organisations or events.
‘‘The entities that comprise our quantity algorithm are startups, co-working spaces, accelerators, and startup events,’’ the report noted.
While measuring the quality factor, the report took into account various additional elements of an ecosystem, including the presence of global coworking brands and mass startup events with thousands of participants. On this, the report also evaluated whether a given location has achieved a critical mass of startups.
StartupBlink Global Ecosystem Report 2020 (Top global startup ecosystems)
On rating startup ecosystems according to the nature of their business environments, the report took into consideration the general indicators connected to infrastructure, business environment, and the ability to freely operate as a startup founder in the country or city. Other indicators include the World Bank Doing Business Report, which measures how easy it is to do business in a given location; Internet speed; Internet freedom; R&D investment, and other indicators that can be reviewed from raw data outputs.
Most importantly, the report shied away from using the number of equity investments made into each startup ecosystem to decide its strength.
“We disregard private investment; partially because there is great difficulty in bench-marking this type of data across all cities and countries, but more importantly, because investment distortion can be caused by regulation or government policy. For example, an investment glut initiated by the government might have a toxic effect on the local startup ecosystem and is not necessarily a sign of strength,” the report noted.
On what is a startup,the report noted that a startup, according to their methodology, is any new business that applies an innovative solution.
“The innovation can be either technological or a unique business model,” the report notes. “As a result, service providers and local directories such as real estate listings will not be regarded as startups, and will not appear on our map. We also decided that any unicorn or a public traded company valued at above $1 Billion should not be considered a startup, and will receive a separate boost in our algorithm as unique entities.”
StartupBlink Global Ecosystem Report 2020 (Top global cities with the best startup ecosystems)
Why Are South Africa, Kenya And Rwanda Africa’s Top Three Startup Ecosystems?
The report notes that South Africa is ranked as leading Africa’s startup ecosystem because the country has a more mature financial market and overall investment culture.
“Cape Town, which is home to 60 percent of all South African startups, has risen up to be ranked in the top 150 at 146th, while Johannesburg skyrocketed 88 spots to 160. Regionally, these two cities are ranked 3rd and 4th in Africa respectively,’’ the report noted.
About Kenya, second top ecosystem in Africa, the report noted that Kenya’s government has been involved in startup ecosystem development since 2013, with the launch of Konza Techno City, a tech park project built outside of Nairobi. The report also noted that Global tech giants like Google, Microsoft, Samsung, and Intel are also located in the capital city. The report however noted that the Kenya receives far less global funding and investment, and has fewer helpful government initiatives, than are present in higher ranked countries.
On Rwanda, the report noted that Rwanda was considered for the spot because it is constantly ranking high in international indexes, like the “World Bank doing business ranking,” and its government has bolstered the ecosystem with several support programs. The report also noted the presence of Entrepreneur Visa for ICT startups, and startups such as CarIsoko, Zipline International, Awesomity Lab, IsokoNow, Yapili, and others which have helped to shape the Rwandan startup ecosystems.
“That said, we should remember the initial conditions the country had to face, including a brutal civil war that not many thought it could recover from,’’ the report noted. “Rwanda’s success allows no other country to make excuses about the difficulties and adverse conditions standing in their way.”
“ If Rwanda could pull up from the lowest place possible and build an organized and vibrant economy and tech sector, any country can. All it takes is persistence,clear policies, and trust in your people to deliver if basic conditions are met. Rwanda is an inspiration to all, and we hope it will continue on its path of constant improvement,’’ the report further noted.
StartupBlink Global Ecosystem Report 2020 (Africa’s top startup cities)
Other countries such as Nigeria (68), Tunisia (77), Egypt (81), Morocco (83), Ghana(85), Uganda (89), Cape Verde (91), Somalia (95) are considered as going through some challenges such as inadequate infrastructure,resulting in unreliable power; poor Internet connections; low number of startup ecosystem hubs; low access to education and healthcare; gender inequality; inadequate startup funding, among other challenges.
There are however inconsistencies about the ranking, with little or no reasons given about how some countries were chosen ahead of others, particularly as the report has also based its ranking on the regions and countries where it has more ecosystem partners. At best, algorithms upon which the entire report is built, may be some abstract set of data that does not entirely capture the realities on ground in most countries.
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
When the government of Ghana, in 2019, signed on Zipline, the San Francisco-based drone delivery startup to fly over its airspace delivering medicine, blood samples and other healthcare services, government critics called it the hoax of the century. In other words, how could the government waste a whopping $12.5 million signing on some insignificant little flying machines instead of attending to the real issues plaguing the country’s healthcare system, like the critical shortage of hospital beds, gloves, among others? But it was only a matter of a few countries before the darkness of the coronavirus shawled the Earth and chased the whole world indoors. As at the time of writing this (Sunday, May 24, 2020; 10:41 PM, WAT), more than 340,000 people have died, close to 5.4 million people infected. And for the first time in a very long time, the world is never in a hurry to return to business as usual. Nevertheless, while the world patiently hopes for the better, the whole pandemic has revealed the near shambolic state of the global healthcare system. And to imagine that Zipline, one of the fancy improvements in healthcare service delivery, would assist Ghana fast enough in deciding whether to lift the lockdown of its major cities (ahead of the continent’s giants such as Nigeria and South Africa) because the country has conducted more tests per million and has secured insights on the pattern of spread of the virus is the first hint that more investment in the African healthcare startup space will assist African countries to build stronger healthcare systems. But are healthcare systems all over Africa not that too complex for healthcare startups on the continent to play a significant part in?
Justin Barad, co-founder and CEO of Osso VR
First, We Consider How Well Funded African Healthcare Startups Were Prior To The Coronavirus Pandemic.
Perhaps until now, much of the investment on the African startup space has gone more to other sectors than healthcare. In 2019 alone, out of a total of 250 deals amounting to a record-breaking $2.02 billion reported by data firm Partech, financial technology companies (fintechs), at 41%, received the lion share of the whole investment sum. The set of data below further paints this picture better. It is rather saddening, from the data, that healthcare startups in Africa have managed to secure only about 4% of the total funding raised by African startups in the past four years, compared to the increasing interests shown by investors in other sectors, such as fintech (which, at 28% has netted the highest percentage of funding coming to African startups) or enterprise and ecommerce( 27% of the total funding accruing to African startups).
Chart 1: Prior to the coronavirus pandemic, percentage funding to African healthcare startups has been low. All data are as adapted from Partech Africa reports for the years considered. Also worrisome is the fact that investors do not appear to see African healthcare startup ecosystem as investment-worthy. This perhaps explains the fact that in the past three years (2017–2019), healthcare startups in Africa only closed 27 deals (a majority of them being follow-on or new rounds of investments, as against investment in entirely new healthcare ventures). 27 deals is so meagre compared to what fintech or enterprise and ecommerce (at 136 and 195 deals respectively) got within the same period.
Chart 2: Prior to the coronavirus pandemic, the number of deals concluded by African healthcare startups has also been low. All data are as adapted from Partech Africa reports for the years considered.The worst fact about investment in the African healthcare startup space is however yet to come: out of a jaw-breaking $4.1 billion received by African startups in total in four years (2016–2019), healthcare startups only boast of a meagre $237.1 million.
Chart 3 : Prior to the coronavirus pandemic, the amount, in dollar terms, flowing to African healthcare startups has also been low. All data are as adapted from Partech Africa reports for the years considered.Compared also to sectors like fintech or enterprise and ecommerce ( at $1.4bn and $1.07bn respectively), this is not ambitious enough for a continent looking to fix its broken healthcare system soon. In fact, so broken is the African healthcare system that there are only, on average, 9 hospital beds per 10,000 people, in comparison to the world average of 27; only two physicians per 10,000 of population, compared to a global average of 14.6. And yet, with over 1 billion people, Africa is the only continent that is expected to double its population in size by 2050.
How Best Could The Low Investments In African Healthcare Startups Be Explained?
Explaining why investment doesn’t always pour into healthcare startups that often, Justin Barad, co-founder and CEO of Osso VR, a clinically validated and award-winning surgical training platform, notes critically that traditional healthcare was not designed, in the first place, to understand startups.
“When it comes to early-stage technology companies, their challenges and early development are drastically different,’’ Justin writes on TechCrunch, an online technology and innovation magazine. ‘‘The two critical resources an early-stage company has are cash and time. The goal is to unlock additional capital with product-market fit, and these companies need maximum flexibility to be able to move quickly to find it. Unfortunately, investors see the healthcare space as complex and high risk, which is true. So these startups face fundraising challenges for the space they are in, as well as unnecessary additional hurdles from the home institutions, increasing the likelihood of scaring away already skittish investors.’’
Another factor that causes low investment to the African healthcare startup sector is the lack of coherent institutional policies and transparency in healthcare systems which scare off potential investors. According to Dimeji Kofowora, co-founder at Helium Health, a Nigerian health startup disrupting the way medical records are kept in most hospitals across Africa, there’s actually an incentive to do nothing in most healthcare enterprises across Africa.
“One difficulty we have faced,’’ he said, about building his startup, “is convincing hospitals that have previously used an electronic medical records platform and have been frustrated to the point where they returned to paper-based records that their experience with Helium Health will be different.”
On institutional policies, Barad also notes that “in today’s world of software, patents are somewhat less valuable and relevant than they once were. If any IP is filed, the institution will claim ownership and will consider licensing it to the inventor for a royalty agreement. Sometimes, if the institution does not believe in the ability of the inventor to carry the IP forward to commercialization, they will even cut them out entirely from the agreement.”
Barad’s assertion, although more particularly likely to be prominent in the United States is true for all countries. By the terms of Article 5(2) of the Paris Convention for the Protection of Industrial Property, each country signatory to the convention has the right to “grant compulsory licenses to prevent abuses which might result from the exercise of exclusive rights conferred by the patent…” This is further consolidated by Article 31 of the TRIPS Agreement which authorizes all member states to the agreement to use compulsory licenses without the authorization of the right holder in appropriate circumstances.
This fact substantially validates the reason why seemingly successful healthtech startups are having proportionately more recurring investors than new ones. Investors in the sector, especially after the Theranos debacle, are now more inclined to fund “tried and tested” issues — except there is a promise by the startup to outperform standard industry practices at least ten times, Barad added.
Perhaps the strongest point that drives home the reason for low investment in the African healthcare startup scene is the very nature of the industry itself. Generally, the healthcare industry is built on evidence, testing and validation. These processes normally take longer time for impatient investors who usually want instant returns on investments (ROI).
“Just last year we launched and we raised 4.5 million dollars in seed funding. Now why were we able to do this?” asked Abasi Ene-Obong co-founder at 54gene, a biotech startup based in Nigeria. “I think it was because investors who came into my company understood the potential for good. Now one of the things I’d like to say is (that) impact investing is not the same thing as charity. This is very important because I once thought impact investing is something that is often talked about but people don’t really understand what it is. People confuse it with Corporate Social Responsibility (CSR); they confuse it with NGOs and things of that sort. So, it’s a very important distinction to make. In fact, if you want to bring in charity money as an investment to my company I will probably say no, because that means it’s a misalignment in our values as a company. As a founder and CEO, I want to do well; I want to make money right. I want to make the enterprise to be profitable, but at the same time I want to do good.”
Abasi’s statement not only captures the values of his company, but the objectives of most venture capital firms, angel investors or even private equity investors looking for profitability in startups when they invest, even if it means quickly accelerating them against their natural growth patterns. Almost always, evidence-based medicine, medical technologies, drugs, or healthcare solutions require energy, and even years to develop, sparing no time for investors, who because of the speed of the technology market, gravitate towards solutions that require the least amount of time to go to market.
Finally, healthcare startups in Africa themselves don’t look like they are ready yet. According to the most recent report from GSMA, an association of mobile network operators worldwide, there are 747 million SIM connections in sub-Saharan Africa, representing 75% of the population. Of this number only a third, 250 million have smartphones. Of this number further, 85.44% are Android users, 13.19% are IOS users while a meagre 0.17% are Windows users. In other words, about 98.63% of all internet experiences in Africa happen on mobile smartphones. These figures are relevant because, according High Tech Health: Exploring the African E-health Startup Ecosystem Report 2017, released by Disrupt Africa, only 44 per cent of the e-health ventures in Africa counted are mobile-based.
“The majority of East African e-health startups use mobile, for example 64% of Kenyan startups use mobile. However this is in contrast to South Africa where the number is 38% and Nigeria with only 25% of e-startups using mobile. Maternal health and emergency response are the two most mobile-based sub-categories of e-health,” Gabriella Mulligan co-founder of Disrupt Africa said.
This scenario probably explains the reason why smaller number of healthcare startups in Africa are closing deals, year-on-year. The most important quality of high-growth and innovative startups is the ability to scale faster to larger markets, and that some e-health startups in Africa are not leveraging technology to reach more markets is a great call for reflection.
How Some African Healthcare Startups, In The Face Of The Coronavirus Pandemic, Are Proving That With More Investments, There Is Hope On The Horizon For Africa’s Healthcare System.
Indeed, the coronavirus pandemic has opened a new chapter for Africa’s healthcare startups. Investors, in their reactionary and opportunistic tendencies are turning more of their attention to healthcare startups now.
“What we are passionate about now is health technology. It will be for the next five years, what fintech has been for the past five years,” said Noor Sweid, partner of Global Ventures, commenting on the investment made by the firm in Helium Health recently.
But the above statement is one side of the good news. The other side shows the resourcefulness of a majority of healthcare startups in Africa in tackling the challenges of Africa’s healthcare system.
54gene, the biotech startup based in Nigeria, for instance, has helped to increase the daily testing capacity of Nigeria during the coronavirus pandemic by launching a fund and a mobile testing center at a time when Nigeria was crying it was running out of testing kits. 54gene launched a $500,000 fund to help increase COVID-19 testing capacity in the country by up to 1,000 additional tests a day, by buying testing instruments and the required biosafety materials such as biosafety cabinets and personal protective equipment needed to keep frontline healthcare workers safe. The startup has currently been at the frontline in one of Nigeria’s coronavirus most hit spots.
In Ghana, mPharma a leading health startup and one of the most valuable health startups in Africa, recently donated a $30K molecular works station to Noguchi Memorial Institute for Medical Research, Accra as a part of its COVID-19 rapid response efforts. The equipment is capable of testing samples right on the field.
Nigerian startup MDaas is also assisting health organisations and African governments to run mass testing centres. The mass testing centres include drive-through testing sites and booth testing sites. The “out-of-health facility” locations will help attend to high volume of patients for COVID-19 samples and send to a centralized laboratory for processing.
The Table Below Contains African Healthcare Startups That Have Raised More $1m In Total Funding, (Deals Were Sealed Both Prior To And During The Coronavirus Pandemic) Whether From Private Equity, Venture Capital, Or Other Types of Financing.
The above are not exhaustive of African innovative healthcare startups that are changing the course of the continent’s poor healthcare system. The coronavirus might have succeeded in throwing more light on them now than ever before, but the fact still remains that in one way or the other these startups are contributing through their niche efforts in changing the entire narrative of Africa’s near-death healthcare systems. They most probably need a voice, by way of more funding, to further construct an entirely new paradigm for the continent as a whole.
In effect, the words of Joshua Owusu-Ansah, country lead of Talamus Health Ghana, help to summarize the current turn of events for African healthcare startups, in the face of the coronavirus pandemic:
“Covid-19 highlights the inefficiencies in the healthcare sector, largely run by the government, and for a long time seen by technology enthusiasts as an unattractive sector to venture into,” he said. “Given the scale of this pandemic — and its direct and indirect impact on the global economy and daily life — I expect it will encourage more to venture into healthtech.”
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 Commissioner-General of the Ghana Revenue Authority, Ammishaddai Owusu-Amoah has said the agency has not started taxing e-commerce. This is as the Ghana Revenue Authority has outlined measures to help boost revenue for the government as the coronavirus pandemic hits the various sectors of the economy.
Commissioner-General of the Ghana Revenue Authority, Ammishaddai Owusu-Amoah
“It (ecommerce) is one of the things that are already in our strategic plan that we are working on for this year and therefore we will come out with it at the right time,” Ammishaddai told Ghana-based JoyNews Channel.
Here Is What You Need To Know
According to Ghana ‘s chief tax man, even though there is no tax on ecommerce, GRA is seriously in the process of automating payment of value-added tax (VAT) in the country.
“We are looking at the Integrated Tax Application end-to-end that is also being worked on. So these are certain initiatives that are ongoing,” he added.
The Ghanaian government in its 2020 budget statement planned to raise GH¢67.1 billion ($11.6 billion), representing 16.9 percent of GDP, in total revenue. Out of the total expected figure for next year, GH¢65.8 billion is to be raised from domestic revenue, representing an annual growth of 22.5 percent over the projected resources for 2019.
Earlier this month, the Ghanaian Parliament amended the Income Tax (Amendment) Act 2015 to exempt withdrawals from third-tier provident funds and personal pension schemes from tax. This is to cushion individuals who have lost their jobs or capital due to the Coronavirus pandemic. This amendment in fiscal terms will amount to 639 million Ghana cedis if all funds are withdrawn under the given circumstances.
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.
With few African countries partially lifting the lockdowns imposed at the wake of the Covid-19 pandemic, leaders are being urged to weigh the consequences and guard against zero-sum policies aimed at saving only lives or the economy, some of the continent’s leading economic think tanks have warned. With 42 African countries currently under full or partial lockdown, the continent is losing about 2.5% of its GDP or US$65 billion a month, said the UN Economic Commission for Africa’s Secretary, Vera Songwe. Songwe was speaking during a debate on Africa’s lockdown exit strategies.
African Union Development Agency CEO, Dr Ibrahim Assane Mayaki
Populations in countries like South Africa and Kenya are growing impatient, with some families living below the poverty line saying they would rather take their chances with the coronavirus than face starvation, said African Union Development Agency CEO, Dr Ibrahim Assane Mayaki.”The question is how to choose the lesser of the two evils, because strict lockdowns have consequences,” he said. Both the economy and social fabric are breaking. Mayaki said data from the World Economic Forum and China shows that strict lockdowns for a long period of time could lead to “mess” of severe consequences for the mental health of citizens, the economy and the social fabric.
In countries with high inequality levels, such as South Africa, when people have run out of cash and food they cannot be locked down, said Mayaki. “The more you stay under lockdown, the more you deepen inequality…We need smart lockdowns which allow intelligent exit strategies where the most vulnerable and communities are preserved in terms of quality of life,” he added. While South Africa’s government has announced a R500 billion economic support package, part of which is earmarked for helping unemployed people and those who survive on social grants, Mayaki said governance systems will be critical in determining whether the relief goes where it is intended to.
Kennedy Odede, a Kenyan social entrepreneur and founder of Shining Hope for Communities, said the fact that South Africa “almost exploded” over food parcels showed that strict lockdowns have become a time bomb. The biggest problem is that most of the financial relief governments are announcing benefits the formal economy, whereas the continent is dominated by the informal sector, he said. “When there is inequality and people are living from hand to mouth, they are ready for demonstration, for uprising because they are not losing anything,” said Odede.
The calls for governments to interrogate their lockdown exit strategies come as South Africa faces pressure from its own citizens and businesses to rethink its risk-adjusted approach to lifting the lockdown which is now in its sixth week. Company CEOs, doctors and actuaries in the country are among those who have written to President Ramaphosa calling for a relaxation of the lockdown regulations to let economic more activities resume. Business for South Africa, meanwhile, warned on Wednesday that the country’s GDP could shrink by between 10% and 16.7% this year, putting between 1 million and 4 million jobs are at risk.
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
Security, risk, data loss, and legislation. These are the primary concerns listed by organizations and government institutions when asked why they are reluctant to move to the cloud. It is the perennial debate – will cloud put the data at risk? Isn’t on-premise more secure? How can the organization ensure it is compliant in light of growing regulatory control over how data is accessed, protected, and used? For many, the answer lies in the tried and trusted foundations of on-premise solutions that have weathered the storms so far. The problem is that this isn’t necessarily the right answer…
President Uhuru Kenyatta
Some organizations remain convinced that on-premise is more reliable than the cloud. In Kenya, government guidelines recently approved by President Uhuru Kenyatta – safeguards that are considered to be on a par with the General Data Protection Regulation (GDPR) – have put immense pressure on organizations when it comes to data handling and sharing. When a company faces either a prison sentence or a hefty fine for violating the act, it makes sense for them to panic about security and be more prudent about with which provider to share their personal information with.
This trend is reflected in Nigeria, Ghana and Rwanda where legislation is influencing decision making when it comes to the cloud. In Nigeria, government industries have been advised to stay with their on-premise platforms. Rwanda has clamped down on its personal data protection with regulations around consent from individuals. South Africa is still toying with its Protection of Personal Information Act, but this is very likely to be signed into law fairly soon. These regulations are all essential in a time when data privacy and security are under scrutiny and the cyber-threat has never been more present. And it makes sense that companies are forming a protective circle around their information and question where and how a provider stores their data before investing into the cloud.
Due to the far-reaching hands of governments, data sovereignty is a primary concern of institutions moving to the cloud. Data sovereignty refers to the fact that information which is stored in the cloud is subject to the laws of the country in which it is physically stored. For some organizations this concern may be warranted, such as highly regulated government organizations storing highly confidential information. However, even highly regulated organizations are taking advantage of what the cloud has to offer by taking a hybrid approach.
For more sensitive confidential information, the data is stored on-premise, and other processes that are less sensitive, are outsourced to third party cloud providers. This is a reasonable approach. However, most companies don’t have the skilled manpower or budget to build a secure hybrid approach, or even an on-premise solution, which is why not moving to the cloud becomes a business risk.
At the same time the truth is that while many organisations cling to on-premise as the solution, it can be the most dangerous of the two.
Using or not using a cloud provider has no bearing on complying with privacy regulations, as long as adequate safeguards around personal information can be guaranteed. Privacy regulations stipulate organisations take into account the state of the art and industry prior to implementing new solutions. When looking into the information technology landscape today, we can see the moving to the cloud is the most secure, scalable, and reliable way to protect data.
“Professional cloud infrastructures are usually safer and more reliable than many on-premise platforms,” explains Anna Collard at KnowBe4. “One of the most common reasons for this is the lack of security resources organization can employ. Security skills are hard to come by even globally, and in Africa we only have about 10 000 security professionals across the entire continent. Large companies such as Oracle have employed a security team that is bigger than all the African security professionals together.”
Cloud service providers are in the business of looking after their infrastructure and their client’s data, providing a level of assurance via ISO 27000, PCI DSS, Cloud Security Alliance and other security certifications. Microsoft Azure or Amazon Web Services (AWS) list of security certs is mind-bogglingly long –a feat that is difficult to accomplish unless security or IT infrastructure management is your core business.
Another issue is that people often ask if the security on offer by the cloud service provider is the absolute best on the market. The real question should be whether the security is appropriate for the level of data and services being provided and where the data center is located to ensure adequate data protection alignment.
“Cloud service providers consider all the angles from auditing to phishing to updates to patches and intrusion detection,” concludes Collard. “Their solutions are designed to not just meet industry standards but to exceed them. This is not only to ensure the safety and security of the customer but because their own reputation is on the line if they don’t deliver.”
According to ESG research in January 2020 67% of enterprises use public cloud infrastructure services to support their IT operations. That number is most likely going to increase even more so over the next few months with the Covid-19 pandemic forcing many organizations to set up work from home. There is no guaranteed road to risk-free business. Cybercrime is on the rise and it is exceptionally sophisticated, leveraging human error and system vulnerability to gain access to systems and damage reputations. Ultimately the cloud is just a third-party provider, the responsibility over the data remains with the data owner, which is the business or organization processing the data.
Performing a third-party risk assessment and reviewing the cloud provider’s security certifications should be standard practice to ensure adequate security will be applied, regardless of where the data is stored, and should help greatly in the decision-making process.
While it’s perfectly understandable for the business to hold onto what it knows – the on-prem solution – cloud has become a powerful and reliable ally that can not only surpass most on-prem solutions but can do so at a lower cost and with better security.
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
