West African businesses can now benefit from seamless trading across West African borders. This is because the Heads of State and Government of countries in the region have finally adopted ECO as the name of the single currency to be issued in January 2020.
Here Are Things To Know About The New Currency
The currency would fully be in use from January 2020.
The currency would be used for trade across West African countries.
The ECO will work this way: shops, hotels, and restaurants, particularly in the larger cities in Ghana, for instance, may now display prices in both the Ghanaian Cedi and ECO currency and many are likely to accept payment in ECO. However, as the official currency is Ghanaian Cedi, no establishment is under no obligation to accept payment in any other currency apart from Cedi.
Consequently, the introduction of ECO may serve as an alternative to the legal tenders in the countries of West Africa who have met all the requirement to start using ECO.
In simple terms, for people living in Nigeria, this means that you can now carry, in addition to Naira, ECO, and ECO can be used to buy or sell anywhere in Nigeria as long as the other party is willing to accept so.
The West African Monetary Agency, the body of ECOWAS in charge of money and finance across the region has said the currency would be based on a flexible exchange rate regime, coupled with a monetary policy framework focused on checking inflation.
In Which Countries Can You Use The Currency?
The currency can be used across the whole of West African countries from January 2020. However, ECO would be used only in the countries that have met the requirement for its use. That is, for any country in the West African sub-region to start using ECO, it must first meet the following requirements:
It must have a single-digit inflation rate at the end of each year
It must have a fiscal deficit (liabilities) of no more than 4% of the GDP
Its central bank must have deficit-financing of no more than 10% of the previous year’s tax revenues
The country’s gross external reserves must give import cover for a minimum of three months.
Additionally, each country must:
Prohibit new domestic default payments and liquidate existing ones. (That is, all domestic debts must be paid off first)
Have a tax revenue base which should be equal to or greater than 20 percent of the GDP.
Have its wage bill to tax revenue equal to or less than 35 percent.
Have its public investment to tax revenue equal to or greater than 20 percent.
Have a stable real exchange rate.
Have a positive real interest rate.
Right now, it appears Ghana is the only country in West Africa that has met all of the above requirements.
“The single currency for 2020 vision is: let’s find two, three or four countries that are ready. Once they meet up, we follow through with the others cascading in,”said Ken Ofori-Atta, Ghana’s finance minister, at a meeting of West African ministers in Accra recently.
The seriousness of the ECOWAS leaders on ECO is buried in this communique issued after the 55th Ordinary Session in Abuja:
‘‘The single currency would be issued in Jan. 2020.’’ the communique reads. “We have not changed that but we will continue with assessment between now and then. We are of the view that countries that are ready will launch the single currency and countries that are not yet ready will join the programme as they comply with all six convergence criteria.”
The leaders also instructed the commission to work with West African Monetary Institute and the central banks to accelerate the implementation of the revised roadmap with regard to the symbol of the single currency.
“It [the communique]further directs the commission to ensure implementation of the recommendations of the meeting of the ministerial committee held in Abidjan on June 17 and June 18 as well as preparation and implementation of the Communication Strategy for the single currency programme. The Authority takes note of the 2018 macroeconomic convergence report. It noted the worsening of the macroeconomic convergence and urges member states to do more to improve on their performance in view of the imminent deadline.”
Most of the eight currencies used in the 15 countries of the West Africa region are not convertible. Convertibility is defined as the possibility to freely exchange a country’s currency for foreign currencies. Where they are convertible, their rates are highly volatile ($2 in the morning, $5 dollars in the afternoon) Hence, ECO will help to address the issue of multiple currencies and exchange rate fluctuations that affect intra-regional trade.
West African countries have the least developed financial sectors in the world. The ratio of bank credit to GDP there is very low. There is no much money in their financial markets, through which money can easily flow across the region. Unlike the Eurozone where payment can be made and settled by banks using Euros and cheques. Payment and settlement systems in several West African economies are still marked by the predominance of cheques in noncash payments. In 2013, for instance, the whole money available in the West African regional market only represented 13% of GDP of the whole of the West African countries put together — this is like 8.5% of GDP for Ghana and 21% for Nigeria, against an average of about 65% for Sub-Saharan Africa. Hence, ECO will open up the market a bit.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Nothing lasts forever, goes the saying. For the Baby Boomers and Generation X who existed without the internet, it was a shock that the traditional, physical retail business model could fade away, to be replaced by the business at the click of a button.
Today, Amazon Effect means that traditional, physical retail shops continue to wind down and call it a quit, giving in to the stiff competition from Amazon, eBay, Alibaba, Jumia and online shops. For emerging markets and developing countries, what remains for these physical shops to be completely rendered to ruins is trust.
Chinese billionaire, Jack Ma, understood this early enough. In 2016, Jack Ma started a revolution he called the ‘New Retail’ that would itself redefine what commerce really means for all of us. Jack Ma is the 21st richest man in the world and the number one richest man in the most populous nation on Earth— China.
He is piercing the heart of commerce and extracting what has fueled commerce over the course of thousands of years ago — human beings. Through new retail trade, he is relaunching the whole idea of technology in commerce and trade itself to the people that originally own them — human beings, consumers.
“Commerce as we know it is changing in front of our eyes. E-commerce” is rapidly evolving into “New Retail.” ,” Ma wrote to Alibaba shareholders in a letter sent ahead of the New York-listed company’s annual shareholders in 2016. ”The boundary between offline and online commerce disappears as we focus on fulfilling the personalized needs of each customer. We anticipate the birth of a re-imagined retail industry driven by the integration of online, offline, logistics and data across a single value chain. This is why we are adapting, and it’s why we strive to play a major role in the advancement of this new economic environment.”
This may sound more Utopian than realistic, but in China where the concept was formed, Hema Supermarket, an arm of Alibaba that specializes in new retail, has opened 64 Hema stores in 14 cities, with over 10 million customers shopping at these supermarkets since the beginning of 2016.
On average, for a Hema Supermarket that has been open for at least 1.5 years, daily average sales are upwards of 800,000 yuan (US$116,500) — about 60 percent of which comes from online orders. Based on Alibaba’s data, offering a combination of online and offline shopping options results in an increase in average monthly spending by customers. Consumers who shopped both online and offline at Hema spent an average of 575 yuan monthly, compared to under 300 yuan for purely online, or purely offline shoppers.
Pinduoduo, the $1.5B Chinese startup is also another Chinese e-commerce company, engaged in new retail. The startup is challenging the giant Alibaba in China’s towns and villages. In January, Pinduoduo had 114 million active users, surpassing that of New York-listed Chinese discount retailer Vipshop. Currently, the startup has captured a projected 7.0% of all retail e-commerce sales in China this year, not a bad showing for a firm that launched in 2015. In three short years, Pinduoduo has emerged as one of China’s fastest growing shopping startups, with as many as 55 million users accessing the site per day.
Pinduoduo’s idea of new retail comes by way of offering group discounts.
Here Is How The Idea of New Retail Works
The idea of new retail lies in thinking beyond the boundaries of the two-party system of retail operations, that is, e-commerce and legacy brick-and-mortar retailing. New retail, instead, focuses on employing an entirely new operating system for reaching and inspiring consumers to shop.
‘‘New Retail trade is trying to solve two particular core challenges in the industry,’’ Emmanuel Elem, an advocate of Sairui, Africa’s new retail startup said. ‘‘The first challenge is the challenge of cold war between offline and online malls. Shoprite is an offline multi-billion dollar shopping mall, for example. On the other hand, Jumia is an online mall. These two different malls are doing things differently and the truth is that they are struggling for the same customers.’’
Now, there are people who have sworn [or who are so internet phobic] that they cannot buy or make payment on the internet because they cannot see the person they are buying from. There are also people that say they don’t have the time to go to Shoprite and begin to buy things [be in the queue and waste their time?] when they have Jumia that can get them what they want in their houses while they wait patiently for delivery to be made. So what new retail is trying to do is to bring a marriage between online malls and offline malls.
By new retail, it will no longer be about online shopping malls. They will also have offline shopping malls or offline distribution centers where people can go, select what they want, pay online and if they don’t want to pay online, they can go to the mall offline and make payment and collect the goods, with the coupon they present to the owner of the shop.’’
He says new retail trade represents a system that blends the best of what both offline and online worlds have to offer. Apart from that, it also offers the best of an entirely new mix of human, digital and physical experience design, giving consumers a new means of inspiration, selection, immediate gratification, physical sensation and convenience, and that ultimately renders the distinction of digital vs. physical irrelevant.
Sairui, The First African New Retail Option Is Gaining Momentum
Although launched this year, March, Sairui is on course to change the idea of internet retail trade. Modeled after Chinese Pindoudou, the startup, which has its Africa headquarters in Accra, Ghana sells everything from clothing to hardware and other commodities and offers large discounts to purchasers. The startup has a strong presence in Nigeria and is also extending to other Africa countries like Cameroon, Uganda, Zambia, Tanzania, and other places.
‘‘We are doing this simultaneously,’’ said Elem. ‘‘Sairui is all about supporting grassroots entrepreneurship. Sairui shows people the possibility of starting to build a business no matter how small they have because with as small as less than 10,000 naira, they can become a business build through Sairui. This is exactly what it’s called pure grassroots entrepreneurship. Sairui also has bigger packages for those that don’t want to start with such small amounts of money.’’
The startup says it has multiple certified safeguard mechanisms, genuine licensed goods at lower prices and more reliable quality.
The Major Changes The Startup Is Bringing To The Table Are In The Logistics And The Customer Experience Areas
The startup offers large discounts to its online shoppers, bringing on-board an entirely new way of buying and selling.
‘‘What Sairui has brought in is the possibility of online and offline shoppers becoming business owners while also shopping. This has nothing to do with network marketing,’’ Elem said. ‘‘Network marketing is a different ball game altogether. Sairui has variety of products.’’
Elem said to handle logistics, the startup has physical shops where the online shoppers can go, present their coupons and redeem their goods or simply make new purchases.
‘‘Sairui is not opening up physical shops on its own. Sairui is opening up these physical shop through partnership or mini-franchising. These shops are called service centers. The centers are there to service our customers who can come and pick up these products. It is either you pay the company online or through these service centers. You can select your products online or you go to the service centers, give them your cash and carry your products. But the simple truth is that the products are going to be very affordable.Right now, we have about three physical malls in Nigeria through what we call Service centers. We service our customers through our customers centers there. We have centers in Cameroun. We have in South Africa. Right now, we have in about seven African countries.’’
For a startup that is just three months old, this appears a great streak of success, but the startup believes its incorporation of Jack Ma’s concept of new retail trade into its business strategy doesn’t just stop at setting up physical locations to enhance internet commerce experience but also that the strategy means consumers on the platform would get a chance to develop business interests from their purchasing or consumption needs.
‘‘Sairui is not a B2B company. Sairui deals directly with end users. We are dealing directly with the end users; people that are consuming these products. We are not dealing with business owners . We are making the end users business owners and also consumers linking them up directly with the manufacturers of these products, removing the middle person involved,’’ Mr. Elem said.
But it does appear that even the B2B middlemen would still have a say after all since the aim is to turn your consumption cost into instant profitability.
‘‘If you do some shopping on a $100 product on Sairui, for instance, we are giving you a discount of 60% on each product, meaning you’re getting a chance to buy two more products. Now, Sairui will help you sell those two discounted products you bought through its wholesale store,online or offline, free of charge. Sairui will sell each of them on your behalf at $100 each, the initial retail price at which you bought them.’’
The startup boasts it would sell off the products on behalf of its customers within a 7 to 10 days period, leaving customers with some unexpected side profit, long hours after they have made their first purchases.
‘‘We are the pioneer of this kind of system,” Elem said. ‘‘It may be strange to African markets, but the simple truth is that over 20,000 e-commerce companies are already using new retail to run their businesses in China. You can trade as many times as you want with one-time principal.’’
Elem said offering discount does not represent any loss for the startup because of a direct partnership with manufacturers of the goods sold by the startup. He said Sairui mall is an open market place just like Amazon, and as such, anything is bound to happen.
‘‘It is just like asking people why they drink water from a clean cup,’’ he said. ‘‘Nobody would see what is good and wouldn’t want to go for it. The general ideology of new retail is encouraging grassroots entrepreneurship. Sairui is a unique opportunity that anyone shouldn’t miss, even though not for the sake of profit, but for the sake of buying things affordable prices and getting free products from its online or offline shops.’’
Getting Started With Sairuimall Africa
To learn more about how to be part of the Sairui value chain, contact the startup’s country director on +2348039421770
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Nigerian ed-tech startup ScholarX has joined the league of African startups that raise funds to kick-start their businesses. The startup has raised US$100,000 towards an intended US$200,000 pre-seed funding round to launch new products and grow its team.
At A Glance
The startup was launched in Nigeria in 2016. The ScholarX app allows users to select parameters and scroll through lists of available scholarships that match their requirements.
Co-founder and chief executive officer (CEO) of ScholarX, Bola Lawal said this round of funding for ScholarX (US$100,000 of a pre-seed round so far) came mostly from angel investors.
“We are primarily raising for our new model, called SkillsFund, which we are ready to run a full pilot of in July,” he said.
“SkillsFund democratises labour-force reconditioning by providing financing to help new entrants — recent graduates — get up-skilled via verified training partners in in-demand skills and then help place them with local employers seeking fresh talent.”
The World Bank ‘s map of tech hubs in Africa. Click herefor a more expanded view
The startup said funds raised would also go towards building the startup’s capacity in terms of staff and technology to handle funding, recruitment, and placement of successful students in the program.
“This means that ScholarX will be positioned to actualise its goal of building an ecosystem around education financing for current students and recent graduates. It means that we won’t just stop at providing scholarships but provide additional training opportunities that will directly lead to jobs for the growing youth population,” he said.
ScholarX last rolled out a new product back in 2017 when it launched Village, an education crowdfunding platform that allows African secondary school and university students to create fundraising campaigns for backing by sponsors.
The Nigerian startup took part in the global WISE Accelerator and the Cape Town-based Injini ed-tech incubator last year and was named part of the third Google Launchpad Africa accelerator cohort in March.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
The competition just got hotter now. Nigerian ride-hailing startup MAX.ng is not taking the recent triumph of its competitor Gokada for granted. The Nigerian motorcycle transit startup has raised a $7 million funding round led by Novastar Ventures, with the participation of Japanese manufacturer Yamaha. This is the 8th largest funding so far in 2019 by any African startup.
Here Is The Deal
The $7 million new funding came from Novastar Ventures, with the participation of Japanese manufacturer Yamaha.
Breakthrough Energy Ventures, Zrosk Investment Management, and Alitheia Capital joined Novastar Ventures and Yamaha in the $7 million round. The new funding takes MAX’s total funding to $9 million.
This move by Yamaha is the second in less than a year in an emerging market ride-hail company.
Just last December, the Japanese company invested $150 million in Grab, a Southeast Asian two and four-wheel on-demand transit company.
Yamaha’s investment in MAX indicates global interest in Africa’s two-wheel ride-hail space. Overall, the motorcycle taxi market is becoming a significant sub-sector on the continent’s mobility startup landscape.
Co-founded in 2015 by MIT Sloan alumni Adetayo Bamiduro and Chinedu Azodah, MAX has completed over 1 million trips and is one of the largest delivery partners in West Africa for Jumia — the e-commerce unicorn that recently listed on the NYSE.
Based in Lagos, the startup’s app-based platform coordinates motorcycle taxi and delivery services for individuals and businesses. Six-million of the investment is in Series A capital followed by $1 million in grants.
New Funds, Bold Moves
Things are going to be interesting. MAX.ng is going for a shocker, a history-breaking feat: electric motorcycles, backed by the new funding. This could be a first in Africa’s growing motorcycle ride-hail market, should this happen. The new funding will go into Electric Vehicles development.
“We’re piloting electric motorcycles in partnership with EV manufacturers and working with grid operators across Nigeria to deploy charging stations,” MAX.ng CFO Guy-Bertrand Njoya said.
MAX has an extended menu for the round, including the company’s payment infrastructure.
“We intend to invest massively in our technology capabilities,”Njoja said.
The startup will also expand to 10 cities in West Africa (starting in Ghana and Ivory Coast) and add new vehicle classes — including watercraft and three-wheeled tuk-tuk taxis.
MAX’s current fleet consists primarily of Yamaha Crux Rev and Indian manufacturer Bajaj’s Pulsar motorcycles.
This Round Of Funding Will Also Fuel Massive Research
Yamaha, the lead investor is looking at connecting the startup to market research and Yamaha’s existing Nigeria operations.
“We want to work with good entrepreneurs in Africa to develop new business in Africa,” Shoji Shiraishi of Yamaha Motor Company’s New Venture Business Development Section told TechCrunch.
“We really want to understand local needs for motorcycles and…to support [MAX] expanding their business,” he said.
He added that Yamaha sells and manufactures motorcycles in Nigeria
The Competition Is On And Is Steaming
Just last month MAX competitor Gokada (also based in Lagos) raised a $5.3 round and announced it would expand in East Africa. Rwanda has motorbike taxi startups SafeMotos and Yegomoto. Uganda-based motorcycle ride-hail company SafeBoda expanded into Kenya in 2018 and recently raised a Series B round, co-led by the venture arms of Germany’s Allianz and Indonesia’s Go-Jek.
On the question of how MAX will compete in a market with more players, co-founder Chinedu Azodoh named diversification and satisfying drivers.
“We’re a very driver-centric business and at the end of the day the driver is where the business is at,” he said, highlighting the ability of MAX’s platform to deliver market-share to those drivers.
“[Also]Strategic for us is making sure we’re doing the right thing at the right time,” he said, indicating the company has already scaled up and scaled down certain service offerings in response to market needs.
“If we find that maybe there’s something else we’re missing out on, we’re happy to jump into that,” Azohdo said.
Also on the big edge, the startup has over others, Azodoh says MAX’s mix of business delivery and personal transit offers an advantage over competitors. He noted that MAX.ng has local developer team and is always looking at new revenue opportunities.
Electric Motorcycles Powered By Renewable Energy
Max.ng is banking on this, at last as the ultimate winner.
“The economics are promising and could offer significant value to the drivers and end-users,” MAX CFO Guy-Bertrand Njoya said
Motorcycle transit ventures are vying to digitize a share of Africa’s boda-boda and Okada markets (the name for motorcycle taxis in East and West Africa) — representing a collective revenue pool of $4 billion (now) that’s expected to double by 2021, per a TechSci study.
Uber began offering a two-wheel transit option in East Africa in 2018, around the same time Bolt (previously Taxify) started motorcycle taxi service in Kenya.
With electric motorcycle taxis in African cities powered by renewable energy becoming a reality, a new stage is set for the continent’s current position in the transformation of global mobility.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
At the moment, there is no MTN, Airtel, Safaricom, Vodafone or any other mobile telecom operator in the East African country of Ethiopia, but that will no longer be the case before this year ends. The country is set to award its first set of telco licenses to multinational mobile companies by the end of 2019.
Before this happens, Ethiopia’s government has continually monopolized the country’s telecom industry. Hence, this is expected to end a state-wide monopoly and open up one of the world’s last major closed telecoms markets.
When This Happens, Investors Would Be Looking At Ethiopia’s Population As A Big Bait
With a population of 105 million people, the second most populous country in Africa after Nigeria will be baiting in squads of investors.
“There will be a bidding war. It’s the last greenfield site. There’s an opportunity to be market dominant,” said one company executive.
A law to create the new watchdog — the Ethiopian Communications Regulatory Authority — is already being debated by parliament. The new telecoms regulator will issue the licenses when the law is approved and this institution set up.
“By this time next year, we hope that many Ethiopians will be using different SIM cards. We are operating on a very aggressive timeline,” Ethiopia’s State Minister of Finance Eyob Tekalign Tolina said.
Vodafone, South African operator MTN, France’s Orange and Etisalat of the United Arab Emirates are likely to be among the leading contenders vying for entry into the Ethiopian market. Senior executives from those companies attended a telecoms conference in Addis Ababa this week and met with government officials.
The bidding process for two licenses will open in September and the licenses would be awarded in December.
Company executives who met with government officials this week were told to expect an announcement on the liberalization plan, possibly next week.
A Look At Ethiopia’s Telecom Market
Right now, the average rural inhabitant of Ethiopia has to walk 30 kilometers to the nearest phone. The ETC announced 7 September 2006 a program to improve national coverage and reduce the average distance to 5 kilometers. The ETC has also stated that the rural telecom access within 5 km radius service has currently reached 96 percent.
Since 26 September 2017, it is not possible to buy and use Ethio Tel SIM cards in mobile devices that haven’t been purchased in Ethiopia or registered with the authorities.
As of 2012, 20.524 million cellular phones and 797,500 mainline phones were in use.
Use of voice over IP services such as Skype and Google Talk was prohibited by telecommunications legislation in 2002.
In 2007, there were just 89 internet hosts. There were 447,300 internet users in 2009. In 2010, just 0.75 percent of the population was using the Internet, one of the lowest rates in the world.
With the proposed new reforms, Ethiopia would be seeking to liberalize the country’s economy.
Government officials are already looking at several potential options, including the sale of a minority stake in Ethio Telecom, granting of new licenses to multiple telecoms operators or a combination of both.
The government will expect the winning companies to start operations next year, initially using Ethio Telecom’s infrastructure to run their networks, the sources said.
Ethiopia’s potential as an untapped market could outweigh concerns about any risks, including Ethiopians’ low-income levels and the country’s over-valued birr currency.
There are 31 countries in Africa where there is a state-owned incumbent telco that is either dominant or has monopoly privileges that hamper the growth and efficiency of the market.
These are: Algeria; Angola; Benin; Burundi, Cameroon, Central African Republic, Chad, Comoros, Congo-Brazzaville, DRC, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Libya (which has several state entities), Mali, Mozambique, Namibia, Niger, Sao Tome, Sierra Leone, Swaziland, Tanzania, Zambia and Zimbabwe.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Africa’s richest woman Isabel dos Santos is poised to widen her wealth margin. Her latest offer is for a 25.6% stake, representing € 1.2 billion in one of Brazil’s leading telecom operators, Oi.
Here Is The Deal:
Isabel dos Santos is making a preliminary offer for the acquisition of shares of Portugal Telecom SGPS, a company in the process of merging with Oi, for a total of € 1.2 billion.
Hence, if the merger becomes successful and Isabel finally acquires the 25.6% stake in Portugal Telecom SGPS, she would invariably be holding a 25.6% stake in Oi Telecom.
But it appears she is doing this as a strategy to block the sale of Portuguese Telecom assets by Oi, of which she may be affected. In the merger with Portuguese Telecom, the Brazilian Oi Telecom incorporated the PT Portugal subsidiary, which brings these assets together.
In order to raise funds for the consolidation of the telecommunications market, Oi is going to sell the operational PT after the merger.
The move comes just days after European group Altice voiced interest in the PT’s assets in Portugal for about € 7 billion. Terra Peregrin, controlled by Isabel, said it was willing to pay € 1.35 per share of PT, an 11% premium. But Isabel appears to have an edge because she is a shareholder of the Portuguese operator competitor NOS. The negotiations for the Portuguese assets continue and new proposals may be presented.
The eventual offer of £1.2 billion by Isabel is coming with a condition: Isabel wants the merger between PT and Oi to be suspended until the 30th day after the settlement of the offer. The Board of Oi seems stuck at this point. It recently announced that it is considering “untimely” changes in agreed terms in the process.
Isabel is not seeing this deal as a hostile one at, all. Her spokesman told Portuguese newspapers that the offer for the shares of PT SGPS is not “hostile” and has as its objective the acquisition of a minority stake in Oi, allowing the maintenance of the Portugal Telecom group unit.
Once the merger is completed, the holding company PT SGPS no longer has the assets but has a relevant stake in Oi and the right of veto in strategic decisions. The share of PT SGPS in Oi is 25.6% and may be raised to 37.3% within six years.
The movement, according to the spokesman, was made in harmony with the objectives set out in a joint statement issued by Zopt last week. Zopt, the operator of the operator NOS, announced that it entered the battle for PT to defend the “national interest”.
But The Price Offer May Be Far From It
£1.2 billion? That may seem a serious far-cry from analysts. The Association of Investors and Technical Analysts of the Capital Markets, an entity that brings together minority shareholders of PT, has since issued a statement in which it supports the increase of the offer to € 1.94 per share – the value corresponds to the average share price in the six months prior to the offer.
Shares in Portugal Telecom, Lisbon, closed up 11.83%, to € 1.36 on Monday. Oi’s preferred shares rose 6.67% to R $ 1.28.
“If the offer is in fact serious and with the intentions described, the offeror should review it for the purposes of mandatory bidding, in particular by adjusting the counterpart (…). Otherwise, said offer can only be understood as a fun and strategic maneuver aimed at other interests, “the statement said.
Brazilian Telecoms
A Simpler Picture
Portugal Telecom SGPS is a holding company that is a partner of the Brazilian operator Oi, with 25.6% of the shares.
The stake was originally 37.3% but was reduced after Portugal Telecom bought 897 million in commercial paper from Rioforte, an arm of the Espírito Santo Group (GES), without the knowledge of the Brazilian operator’s direction and despite the economic fragility of the conglomerate, of which PT is a member.
The company took default in July. In addition to having a reduced share in Oi, PT SGPS is also the “owner” of the debt left by Rioforte. As Gores, owner of Rioforte has entered into judicial reorganization, the market finds it unlikely that the money will be recovered.
Isabel is considered a symbol of the “influence of power and wealth in Angola,” according to the Financial Times.
In an interview published in the diary in 2013, the Leading Business Woman of Africa described herself as an ordinary person, who drives on her own in Luanda and faces traffic like anyone else.
Africa’s richest woman’s fame, however, is that of an influential business woman who has created thousands of jobs to Angolans. “I do business.”
Isabel Dos Santos At A Glance
Aged 46, with a net worth of $2.3 billion, Isabel Dos Santos is the 8th richest person in Africa. She owns shares of Portuguese companies, including telecom and cable TV firm Nos SGPS.
In one of her interviews, Africa’s richest woman shared her advice to entrepreneurs:
‘‘Your best business bet is you, your skills, your motivation, and your passion. You must have an idea, make a five year plan, prepare your money, ground your idea in detail, be persistent, and partner yourself with a trusted team. Stay passionate always, and execute — don’t delegate.’’
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Businesses, entrepreneurs or contractors in Uganda selling goods and services to small and medium-sized enterprises (SMEs) in the U.K. can now receive payments faster and more conveniently following the launch of WorldRemit for Business in the country.
What This Means
With this launch from the world leading digital remittances firm WorldRemit, U.K.-based SMEs can quickly pay their employees and contractors in 140 countries worldwide, including fast-growing emerging markets such as Kenya, Uganda, and South Africa. The new service will first be available to U.K.-registered businesses.
For Ugandan entrepreneurs and contractors doing business with clients in the U.K., this service will lead to significant time and cost savings.
Traditional bank payments, which are still the dominant international transfer method for businesses sending money abroad to Uganda, can take up to a week, and often incur high fees and exchange rates. In contrast, WorldRemit’s low fees and exchange rates are shown up-front and customers can send money easily via the app or website.
Transfers To Uganda To Be Processed With 24 Hours
With this new service, users sending funds to Uganda can easily track their transfers in real-time on the WorldRemit app and opt-in to receive daily exchange notifications to send money at the optimal time.
Transfers to Uganda are processed within 24 hours or less and local entrepreneurs can receive payments via bank account, mobile money or cash pick-up — whichever method is most convenient for them.
“When I first started WorldRemit, I was frustrated with the high charges and long delays in sending money abroad both as a business owner and consumer. Over the past 9 years, we’ve made it easier for 4 million people around the globe to send and receive money,’’ Ismail Ahmed, Founder and Executive Chairman at WorldRemit said.
Today, we’re pleased to extend that service offering to businesses, and put an end to the steep fees that many pay, especially when sending to Uganda. We’re committed to making it quick, safe and easy for you to pay individuals across borders, leaving you to focus on growing your own business.”
WorldRemit customers complete over 1.4 million transfers every month from over 50 countries to over 140 destinations using its app or website and remains committed to providing innovative solutions to meet money transfer needs across the world. Earlier this year, the company announced a new partnership with FINCA and Diamond Trust Bank to further solidify its vast partnership network.
The U.K. is one of Uganda’s most important trading partners, with Uganda mainly exporting tea, coffee, and horticultural products. However, with the advent of digital technologies such as e-commerce, smaller entrepreneurs have been able to capture a growing share of U.K.-Uganda trade, especially in the services sector. WorldRemit for Business will enable this new class of digital savvy Ugandan entrepreneurs to get paid quickly and securely.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Norrsken has entered the East African startup market. The foundation is now open for startups and ventures in East Africa to have access to investment as well as mentorship for their businesses.
Nature and The Size of Norrsken’s Fund
Originally from Sweden, Norrsken Foundation is a coworking space and investment fund based in Stockholm. The new tech fund and entrepreneurship hub opened today in Rwanda will support ventures across the region.
Norrsken’s location in Kigali, Rwanda is former École Belge campus. The startup will be making seed investments of between $25K to $100K for early-stage startups in all sectors starting this year, Norrsken CEO Erik Engellau-Nilsson said in a press release.
However, Norrsken’s size is still being determined and Norrsken Kigali will extend the fund to larger series-stage investments from $100K to $1 million in the future.
Norrsken’s foundation’s move into Rwanda is strongly connected to the organization’s focus on the power of tech entrepreneurs to solve problems and generate capacity.
“We believe the single most important thing we can do here is to help people get wealthy, because if that happens, more investors will start to look at this region and see there are business opportunities and bring more capital,” said Engellau-Nilsson.
“The aim is to build the biggest hub for entrepreneurship in East Africa. Startups that receive Norrsken funding from its Kigali center will receive mentorship and support of the overall Norrsken organization and network. That includes unicorn founders, leading tech founders, and developers. We also look to expand that network to local accelerators and incubators.” said Engellau-Nilsson.
Why This Launch Is Important For East African Startups
This launch of Norrsken’s Kigali center is so important and significant for startups in East Africa because this is Norrsken’s first launch outside of Sweden. The organization is hoping to open up 25 markets globally over the next decade.
Formed in 2016 by Niklas Adalberth, the founder of Swedish payments solutions unicorn Klarna, Norrsken aims to support impact-driven, early-stage ventures. Engellau-Nilsson was an executive with Adalberth at Klarna from 2013 to 2017.
“We wanted to use our experience and tech to solve real problems instead of finding another way to do things like deliver burrito’s faster,” said Engellau-Nilsson.
Norrsken has already invested in 17 ventures, including three Africa-focused startups- agtech company Wefarm, digital publisher Kognity, and weather forecasting firm Ignitia. Over 340 entrepreneurs and 120 companies currently work out of Norrsken’s Stockholm location.
Why Rwanda?
Norrsken said it chose Rwanda as the base for its East Africa because of the country’s progress over the last decade on infrastructure, increasing internet penetration and improvement in its business environment.
Rwanda’s ease of doing business has significantly improved in 2019. The country ranked higher than any African country on the World Bank’s Ease of Doing Business list — 29th, even before Spain.
Even with a relatively small population (12 million) and tech scene, the government of Rwanda has prioritized tech events and development in the country. This includes becoming a leader on drone delivery and regulatory systems, working most notably with San Francisco based UAV startup Zipline.
Of the East African countries from which Norrksen will source investments, Kenya stands out as one of the continent’s top hubs for tech startup formation, VC, and exits.
African startups are gradually being funded
How To Pitch For Norrsken’s New Fund
Startups or ventures in East Africa desiring to pitch for Norrsken’s new fund may do by clicking the informational and contact link Norrsken posted for its Rwanda hub today.
“If there are entrepreneurs who want to reach out to us, we’re ready to go,” said Engellau-Nilsson.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Mentors form a critically important part of building a successful business.
According to the United States’ Small Business Administration’s Office of Advocacy survey, only half of all small businesses survive more than five years and about 10–12 percent of all employee-based firms close each year. The research also shows those small businesses that receive three or more hours of mentoring achieve higher revenues and increased business growth. This has been further confirmed by a 2014 survey by The UPS Store, that about 70 percent of small businesses that receive mentoring survive more than five years — double the survival rate of non-mentored businesses.
Aside from the United States, research conducted by the UK’s Federation of Small Businesses has shown that small businesses that have received mentorship have superior survivability rates when compared to non-mentored businesses.
Below are some of the great proven ways mentorship helps startups to scale.
Mentors Have Deep Knowledge About Their Industries:
A mentor who is in your industry and who has been in the same line of a startup as you do would help you to understand the depth of your business and the complex nature of your market. However, having a mentor who focuses on a particular niche is better than having a mentor who provides general advice which your startup may need.
Dr. Arthur Krebber shares some thoughts about why niche mentors are better than general ones.
Being a marketing magician does not make you a supply chain supremo. When placed on the throne of Mentor, you run the risk of acting like the oracle of all things startup-esque. A dose of self-reflection is critical in this regard. What is your advisory niche — i.e. in what two to three areas can you really add value? And are those in line with what your mentee is after? Depth of advice always beats breadth of advice.
Startups Can Avoid Many Costly Mistakes With The Help Of A Mentor
With an experienced mentor, your startup can scale through several mistakes. Mentors usually do not have vested interests in your business. They, therefore, seem to say the truth the way it is. They will tell you things no one else will, even if it hurts.
Founder of IrokoTv, Jason Njoku says mentoring helped him to a great extent while growing iROKOtv.
I think it’s super important, irrespective of whatever industry you’re in, to try and be on friendly terms with other significant players. The VOD players above are all slightly different, across different Geo’s, yet much further ahead in terms of market development than iROKOtv. So I have A LOT to learn. Speaking with Suk [Park, Co-Founder of DramaFever.com] a few Fridays ago in NYC really made me realise how little iROKOtv had actually achieved. In the 4 hours I spent at DramaFever’s madison avenue office, I learned more than I could ever know otherwise, even if I read hundreds of books or blog articles. Their successes and challenges helped narrow my entire company’s focus and thus make necessary changes earlier rather than later. I will be circling in with Suk on a regular basis just to trade ideas, borrow some wisdom and genuinely try and re-create the greatness DramaFever has created. Ego aside. Where possible. Get a mentor. Or a friend.
Mentors Can Lend You Their Network
Having a mentor with strong connections in the industry and the ecosystem you are operating in will help you in no small ways. The mentor can help to open multiple doors. Most investors feel more comfortable and would most probably make an investment if the startup was referred to them by their network. This applies also in the most business to business engagements. For instance, it is more effective to get referred by a vendor that supplies to a large corporation than cold calling.
Michelle Shroeder, an entrepreneur, and blogger who runs the personal finance and lifestyle blog Making Sense of Cents, that turns in over $70,000 in revenue per month says that as a mentor:
“The most painful mistake I see first-time (or inexperienced) entrepreneurs make is that they see others in their industry or niche as competition. This can significantly hold you back, as you may never learn industry secrets and tips, make genuine friends, and more.”
“Instead, I think you should see others in your industry or niche as colleagues and friends. You should network with others, attend conferences, reach out to people, and more.”
Shola Akinlade, Co-founder of Paystack is one of the startup owners that benefited from this network:
“I applied to YCombinator in 2007 for my first company, Precurio. We did not get in, but we kept working on the business. In 2014, I realised that so many businesses were struggling to accept payments from their customers online and so I started working on Paystack to solve the problem and make payments easy for businesses. While working on Paystack, someone told YC about me and one of the YC partners encouraged me to apply. I applied and after some back and forth, we got invited for an interview in Silicon Valley in November 2014, ” he said.
Most Mentors Are Entrepreneurs Too So They Share In The Struggle
Mentors themselves understand what it means to run a business and succeed. Entrepreneurship is hard and someone who has gone through that path can understand the various issues and guide you in the best ways. Mentors are already familiar with their areas of specialization. Learning from them can help startups wade through unclear waters. Mentors can bring in a sense of direction and balance for startups when things go awful. They can help startups spot new opportunities. A mentor who has built a company from idea to exit is an ideal being. It always helps if you are mentored by someone who has gone through the process of entrepreneurship and has been successful at it. Although having mentors from big corporates who manage large businesses is good, it is a different game when you need to validate your idea, raise money and steer the company through difficult times. This when you would require an entrepreneur who has had that experience.
Mentors Are Flexible With Their Wealth of Experience
Unlike starters who are yet to have a feel of what the business terrain looks like, most visionary mentors are already looking ahead towards finding a lot of creative solutions to current problems. A great startup mentor can help you to look beyond the daily operational and tactical issues faced by your startup and help you build a bigger vision for it. In this regard, you should hope that the mentor should help you look at the evolving technology trends and changing market dynamics. The mentor should also help you build alternative revenue sources, and scale and solidify your position in the market.
Key Points About Finding The Right Mentors
A startup owner has to be careful about choosing a mentor. Usually, a single mentor may not possess all the elements listed above. In this case, it is extremely necessary that you may need two or three mentors with different levels of engagements guiding you.
Nav Athwal, founder, and CEO of RealtyShares sees mentors as a very important part of the journey for startups
As a founder, there’s a tendency to assume that your grit and hard work are sufficient to drive the success of your startup. While these things can take you far, they’re not a substitute for the experiential knowledge that comes from heading up an established company.
That’s what makes mentors and advisors such a crucial part of the equation for startups. Surrounding yourself with the right people — at the right time — can be instrumental as you grow and begin to move toward long-term sustainability.
The type of mentors and advisors that founders should associate themselves with is linked to what stage their business is in. In the early days, you might have one set of advisors that helps you find your footing, and as you move onto the next phase of growth, the people you look to for advice and insight will in turn evolve, he says.
Avoid Celebrity Mentors
Many first-time founders make the mistake of chasing celebrity mentors. While they do bring a lot to the table, it’s not necessary they are the right fit for your needs. Founders must do extensive research before signing on a mentor, because the relationship is more than temporary.
The first step in finding the right mentor is to ask what is it that you want a mentor to help with. “I help structuring my ESOP plan”, “I need to create employee policies that will help me attract and retain the right talent”, “I need to find out the best technology investments for my business”. A concrete question that the mentor can answer for you will help narrow down the list considerably, notes Inc42 BrandLabs.
Bottom Line:
Mentors are good for the growth and the eventual success of startups. However, in looking out for one, follow certain sound standards. For instance:
Don’t go for celebrity mentors. Find a tested, trusted and experienced entrepreneur or expert.
Plan specific problems you would want the mentor to help you solve and focus on them with the mentors until they are solved.
You can rely on more than one mentors based on their expertise in specific areas at a time
Don’t force yourself into the relationship; let it grow on itself.
Most times, sticking to the paid consulting type of mentorship may not be a good choice. They may lack the capacity to be open and objective for fear of losing their earnings.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
LawBasket is, well, bringing law to the basket of what can be purchased online in Zimbabwe and across Africa. The startup was just founded in December of 2018 by a team of entrepreneurs that includes two lawyers. In what was supposed to be a huge thrill for the startup, it secured signups from legal professionals from more than 25 African countries on this launch.
The Law Startup Business Model Is Simple
The startup believes you can shop all legal services online the way you shop for clothing and other wares. The startup calls itself an online legal services marketplace for small businesses and startups, which bring together hundreds of lawyers in over 200 practice areas to deliver quality and affordable legal services online. The startup also offers client relationship management technology and payment processing services for lawyers.
The startup exists for both lawyers and clients.
The client can get to hire lawyers for their job from a wide range of lawyers on the platform, with expertise in various areas. They can either post a job and let lawyers bid based on expertise and client’s budget, or they can simply search for services, find lawyers and invite them to do their cases.
The startup is also giving legal clients the power to manage jobs from anywhere in the world, using their dashboard. With an integrated mailbox on the dashboard, the client can send emails to their lawyers quickly and follow up on their cases. They can also monitor proposal for posted jobs or manage their payments to lawyers for work done. Lawyers are only paid when the job is done. Through LawBasket Payments, the startup also simplifies the process of creating and managing bills for lawyers and provides a simple portal to process multi-jurisdictional payments for legal services.
For lawyers, they can search for cases that tickle their fancy, and send proposals to clients based on their expertise that suits the case, and at the same time search jobs at any time.
The startup is also giving lawyers a dashboard and a mailbox to manage their work from anywhere in the world.
According to the startup’s co-founder and head of marketing Nyasha Makamba in a recent interview, the platform presented a credible alternative to traditional law firms, providing a cost-certain solution to getting legal help for small businesses across Africa.
“In terms of the competition, and although the company is not a law firm, the firm broadly competes with traditional law firms, as well as other consultancy companies that provide technology-driven legal solutions. LawBasket is different from traditional law firms both in size and reach, as well as its approach to pricing legal services,” said Makamba.
How Law Basket Expects To Make Its Profit
Although LawBasket has been funded by its founders, Makamba said it had a “clear path to revenue generation and profitability in 12 months”, with revenue expected from commissions on LawBasket jobs, premium membership, and payment processing fees through LawBasket Payments.
Already, the startup has gained traction with over 153 lawyers from more than 25 African countries registering on its platform.
“It is almost 10 times bigger than the largest law firm in Zimbabwe, and is less than 40 lawyers away from surpassing the largest law firm by lawyer number in South Africa and Nigeria,” Makamba said.
Law Basket is also getting a hit from potential clients from more than 15 countries. Its client base is already over 106, ranging from small businesses and startups.
“With these demographics, this means that the legal services payment processing aspect of the business is operative in 25 countries in Africa, including South Africa, Nigeria, Zimbabwe, Kenya, Zambia, Botswana, Senegal amongst other countries,” Makamba said.
“We plan to increase user numbers both on the client side and the lawyer side in the current markets, with plans to introduce more lawyers from the Francophone and Lusophone markets within 12 months.”
Globally, the legal technology industry is still growing, but the industry has quietly built up a number of emerging categories over the last few years. As of 2017, legal tech companies raised just $739M in aggregate funding since 2011. However, there is still a lot of opportunities to improve processes within the legal industry still attached to manual and paper-based processes.
The least popular areas in legal tech in 2018 are e-Billing and intellectual property, where machine learning is widely used. These areas are represented by three companies on each side. In 2018, only one of them has raised investments, a company which is developing an IP-solution.
On the other hand, e-Discovery is one of the most popular destinations in the whole legal tech industry. e-Discovery, mostly used in common law countries is an electronic service for finding relevant information about lawsuits and investigations. In common law countries, e-Discovery does provide great help to lawyers, saving them time and improving the accuracy of finding suitable court cases.
In 2016, $224 million was invested in the industry; in 2017, $233 million was invested. Investors were eyeing a fairly young business area and refrained from large transactions.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
