Nigeria’s multi-billion-dollar virtual asset market, the largest in Sub-Saharan Africa, risks being suffocated and driven offshore by new tax guidelines that charge levies on transactions regardless of whether users make a profit, an industry coalition has warned.

The Digital Assets Coalition (DAC), representing digital asset operators and stakeholders in Nigeria, is urging the Nigeria Revenue Service to review the framework that took effect on August 3, taking a formal position that fears the new rules are an albatross to the sector.

The coalition’s concerns centre on three provisions. First, a 1.5% stamp duty on every conversion between naira and digital assets, never refunded and charged whether a person gains or loses. Second, a 1% withholding tax deducted from the total value of every digital asset sale, even where investors incur losses. Third, a requirement to remit taxes in digital tokens rather than naira, which the coalition says conflicts with Section 39 of the Nigeria Tax Administration Act, 2025, mandating tax payments in recognised currency.

“We support the taxation of virtual assets without qualification,” said Obinna Iwuno, spokesperson of the Digital Assets Coalition. “Our concern is with a design choice that taxes the movement of money itself. This charge falls on a remittance to a student abroad, on a freelancer converting earnings already taxed as income, and on a trader in a year they lost money. That is not a tax on profit. It is a toll on participation.”

The burden falls hardest on young Nigerians, who built the USD 92 B market into working infrastructure for global earnings, family remittances and savings that survive naira volatility. Because young users transact small amounts frequently, the levies compound fastest against their pattern of use, biting even below the NGN 10 M threshold the Nigeria Tax Act itself exempts and within the NGN 800 K income band taxed at zero.

“The framework is anti-youth in effect, even if not in intent,” Iwuno said. “You cannot tax your way into the future by taxing the people building it.”

The coalition points to international precedent. India’s 1% transaction withholding tax saw regulated exchanges lose 81% of trading volume within four months, with over 90% of trading moving offshore within a year, according to the Esya Centre. Kenya repealed its 3% transaction tax in 2025 after determining it generated limited returns, and Turkey withdrew a similar levy in 2026.

“The traders did not stop trading; they simply moved to platforms beyond the reach of regulators,” Iwuno said.

Nigeria formally legalised digital assets in March 2025 when President Bola Tinubu signed the Investments and Securities Act into law. The country processed USD 92.1 B in cryptocurrency transactions between July 2024 and June 2025, nearly three times that of South Africa, according to PwC. Despite regulatory uncertainty, Nigeria has become one of the world’s most active retail crypto markets.

The coalition maintains it is not opposed to taxation. It backs taxing realised gains, registering platforms, verifying customers and requiring full transaction reporting, in line with standards in the United Kingdom, South Africa and Brazil. But it warns that taxing transaction volumes rather than profits will shrink economic participation and ultimately reduce government revenue.

“This is not a fight against taxation. It is a request for a design that works for citizens and the Revenue Service alike,” Iwuno said.

The coalition has called on the NRS to suspend implementation, consult publicly, tax real gains rather than movement, collect taxes in naira, protect small earners with a de minimis exemption, and ensure tax rates are set only by the National Assembly.

Ugandan developer Ernest Mwebaze spent much of the past year testing both U.S. and Chinese AI tools to build a system for his country’s dozens of local languages. The Chinese models won.

Mwebaze, a former Google research scientist, ultimately chose Alibaba’s Qwen. It handled Ugandan languages better than Meta’s or Google’s offerings, cost a fraction of the price, and let him fine-tune it with his own data, he told The New York Times. His system, Sunflower, is now being used by Ugandan farmers to receive weather and planting advice in their native tongues.

Mwebaze is not alone. Across Africa, thousands of developers have made the same choice over the past year. In Kenya, entrepreneurs are deploying Chinese models to optimise legal and business services. In Nigeria, developers are building teaching tools for high school students. In Ghana, locally-built chatbots are popping up.

According to The New York Times‘ recent analysis of user data from OpenRouter, a platform that aggregates 400 AI models, Chinese open-source models now account for roughly half of total usage, up from less than a quarter just a year ago. On Hugging Face, the AI community platform, 19 of the 25 most-downloaded open-source systems are now Chinese.

Developers reckon using a Chinese model is like owning your own house, whereas a U.S. model is like long-term renting. Nairobi-based entrepreneur Moses Kemibaro mentioned that when you factor in compute infrastructure and other costs, Chinese models can be up to 90% cheaper.

That cost differential is magnified in African markets. U.S. models from OpenAI and Anthropic are closed-source and fee-based. China’s DeepSeek, Qwen, Kimi, and others can be downloaded and modified for free, with no approval process. It’s a no-brainer for African developers with limited hardware resources; it offers a system that runs reliably on modest infrastructure, which to them, matters far more than being “cutting-edge.”

Chinese firms are also actively courting the continent. Developers say Chinese companies offer free compute credits and direct engineering support, treating African teams as core customers, while U.S. vendors barely have a local presence. Joining Anthropic’s developer programme requires a lengthy approval process, while joining Alibaba’s takes minutes.

The geopolitical undertones are hard to miss. Last month, seven African nations, including Kenya, Ethiopia, and South Africa, signed AI cooperation agreements with China. U.S. chip export restrictions on China have paradoxically accelerated the trend as Chinese AI firms, unable to compete head-to-head on compute power, are leveraging open-source models to expand their ecosystem and capture emerging markets.

But African developers don’t see themselves as geopolitical pawns.”I don’t think people should worry so much about who built it, ” one Kenyan developer, Michael Michie, was quoted as saying. “What matters is whether it provides the capabilities you need.”

The race is far from over. Many African developers still use U.S. models for programming and other technical tasks. But as Kenyan tech entrepreneur Bernard Momanyi Nyagaka noted, Chinese models are catching up “really, really fast.”

As it turns out, while Silicon Valley debates whose technology is superior, developers in Africa have already voted with their feet.

When Moove launched in Lagos in 2020, its simple pitch was to help Nigerian drivers get cars. The company would finance vehicles, drivers would repay from their Uber earnings, and eventually they’d own the metal.

Six years and 42,000 vehicles later, Moove is Africa’s most valuable mobility startup at USD 2.1 B. But its latest USD 250 M Series C round, led by Abu Dhabi’s Mubadala, has Africa’s newest unicorn shaping up to escape arguably the very thing that made Moove: drivers.

The company’s autonomous vehicle push, which began in early 2023, is built on a brutally shrewd observation that nobody in the robotaxi ecosystem wants to own the cars. AV developers like Waymo are software companies, and marketplaces like Uber are matchmakers.

Neither wants to deal with charging, cleaning, maintenance, or lost property, Moove’s co-founder, Ladi Delano, pointed out, resolving to “create a product where we own, operate, and orchestrate autonomous vehicles”.

Moove is now Waymo’s fleet operations partner in Phoenix, Miami, and soon London. It plans to grow its autonomous vehicle workforce from 150 to 500 people by year-end and is developing robotics-enabled depots called “Nests” to automate charging and maintenance around the clock. The company claims it already owns robotaxis from an undisclosed AV developer and ultimately wants to own “hundreds of thousands of vehicles”.

The irony is evident in Lagos, Moove’s original market, where the “drive-to-own” model that built the company has become a source of intense conflict. Last year, the Amalgamated Union of App-Based Transporters of Nigeria threatened indefinite industrial action against Uber and Moove over alleged exploitative practices.

Drivers have accused the company of seizing vehicles and manipulating repayment records. The Nigeria Labour Congress has weighed in, planning what it called the “mother of all protests”. Uber has publicly distanced itself, saying the decisions rest with Moove alone.

The autonomous vehicle play notably sidesteps all of this. Moove’s hard-won operational discipline, learned in the chaos of Lagos traffic, currency volatility, and drivers with no credit history, is exactly what robotaxi rollouts demand. But the company that emerged from those streets is now deploying its capital almost entirely outside Africa, targeting the US, Europe, and Asia.

Moove insists its traditional mobility business is on track to reach full profitability this year. It generates USD 420 M in annual recurring revenue and operates across 29 cities in 13 countries. But the company is betting that the real prize, and the real capital, is elsewhere. The Series C funds will scale autonomous fleet ownership and “Nest” infrastructure globally, not expand car financing for gig workers in Nigeria and similar markets.

“Every major technology revolution becomes an infrastructure race,” Delano said in a statement. “Autonomy requires fleets, charging, maintenance, data systems and 24/7 operations in every city,” which are only feasible in markets outside Africa at present.

Mubadala’s Ali Eid AlMheiri put it more bluntly: “As autonomous mobility moves from innovation to scaled deployment, the infrastructure supporting it becomes increasingly important”.

Moove would now look to double down on applying the lessons learned in African markets to a more lucrative geography, gradually leaving behind the very drivers who taught them. The company that built its reputation on putting drivers behind the wheel is now betting that the future of mobility has no drivers at all.

On paper, Nigeria’s ten largest banks look like they’re investing heavily in their future. They spent NGN 177.91 B (~USD 130 M) on technology in the first quarter of 2026 alone, up nearly 31% from the same period last year. But a substantial chunk of that money never stays in Nigeria.

It flows out as recurring payments to foreign cloud platforms like Amazon Web Services, Microsoft Azure and Google Cloud, where most of the country’s financial data currently sits.

Industry estimates suggest Nigerian enterprises spend as much as USD 850 M annually on foreign cloud infrastructure, capital that leaves the economy and places sensitive Nigerian data under foreign legal jurisdiction. That era is ending. And Nigeria’s banks are running out of time.

On 15 June 2026, the Central Bank of Nigeria issued a circular requiring all payment transaction data generated in the country to be stored and managed locally from 1 January 2027. The directive applies to deposit money banks, microfinance banks, mobile money operators, switching companies and payment service providers.

While the obligation was clear, the mechanism for proving compliance was not, at least until now.

A new mechanism

On 4 August 2026, NITDA, Nigeria’s federal technology regulator, signed three regulatory instruments establishing the National Sovereign Cloud Initiative: the National Cloud Computing Guideline, the National Cloud Technical Guideline, and the National Digital Infrastructure Assurance Framework, alongside a National Cloud Investment Strategy.

From October 2026, a national digital regulatory platform will go live as the central portal for onboarding, registration, technical assessment and certification of cloud providers, data centre operators, systems integrators, managed service providers and AI infrastructure operators. A public register of certified providers will follow.

“The same technical standard will apply to Nigerian companies and global hyperscalers,” NITDA Director General Kashifu Inuwa Abdullahi said at the signing ceremony. “Certainty attracts investment. Ambiguity deters it.”

The scramble

The timeline is tight for Nigeria’s banks and even tighter for fintechs. According to Krishnan Ranganath, CEO of UniCloud Africa, most Tier-1 and Tier-2 commercial banks have already localised their transaction data. But fintech companies, digital banks and other financial institutions that still host data overseas are racing against time.

“Many fintech firms have existing long-term agreements with international cloud providers, making migration expensive and operationally complex,” Ranganath told BusinessDay. “There is also a major trust factor. Institutions want assurance around infrastructure resilience and cybersecurity”.

Industry estimates suggest more than 90% of regulated businesses in Nigeria currently host data on foreign cloud platforms. Migrating critical applications and infrastructure within six months will require substantial investment, operational adjustment and technical redesign.

Opportunity beckons

The CBN directive has effectively turned a policy aspiration into a demand signal. Temitope Osunrinde, executive director of Africa Hyperscalers, described it as “one of the strongest demand signals yet for local data centres, cloud platforms and interconnection services”.

Nigeria currently has about 26 data centre facilities, with installed capacity estimated between 65 and 86 megawatts. Industry projections suggest that could climb beyond 400 megawatts within the next three to five years as new facilities come online. Local providers like Galaxy Backbone are already positioning themselves to serve banks and fintechs through sovereign cloud platforms.

Ayotunde Coker, CEO of Open Access Data Centres, told a media briefing in June that “we’ve spent years building reliable, world-class data centres that allow banks and other businesses to host their systems in Nigeria”.

Beyond enforcing data localisation rules, Nigeria is building an assurance framework that turns a regulatory burden into a structured market. Banks and fintechs now have a clear path to compliance. Providers, both foreign and domestic, have a single published standard against which they will be assessed.

It’s now a question of whether the infrastructure, the capital and the technical capacity can scale fast enough to meet demand before the January deadline.

Terra Industries, the Nigerian defence technology startup that has raised USD 34 M this year from investors including Palantir-linked 8VC and Lux Capital, is partnering with Miva Open University to build robotics and drone laboratories across the university’s learning centres, starting with a pilot in Abuja.

Under the agreement, Miva students will learn to design, assemble, test and fly drones as part of their academic programmes. Terra will run hands-on workshops, train faculty, and offer internships and jobs to top performers.

The company says the partnership was borne out of the simple calculation that Nigeria’s drone industry cannot scale without the engineers to build it.

Terra operates a 15,000-square-foot manufacturing facility in Abuja, the largest drone factory in Africa, and is constructing a 34,000-square-foot plant in Ghana. The company’s autonomous systems already protect infrastructure assets valued at roughly USD 11 B across eight African countries. But hardware alone is not enough.

“We are building tools designed for the realities on the ground,” Terra CEO Nathan Nwachuku said in February, after the company’s second funding round. “Security technology should not always be imported when local innovation can respond faster and more effectively.”

That local innovation depends on a pipeline of trained talent. Nigeria’s defence sector has historically relied on imported systems with limited technology transfer. The Nigerian Army has publicly acknowledged constraints caused by “inadequate skilled manpower” in drone warfare and armament development.

Miva, Nigeria’s first private open university, graduated 1,280 students at its maiden convocation in June. The institution has since launched a bachelor’s degree in Artificial Intelligence and announced plans to expand into robotics and drone laboratories.

“By mastering autonomous systems, aerial robotics, and hardware engineering, our students are preparing to solve real-world Nigerian challenges,” Miva Chancellor Sim Shayaga said at the convocation.

The Terra-Miva partnership mirrors a strategy unfolding elsewhere in Nigeria’s emerging defence sector. In May, Terra’s CEO committed NGN 40 M (~USD 29 K) to support the South-East Maths Olympiad, with summer internships at Terra for winners.

In February, Terra signed a joint venture agreement with the Defence Industries Corporation of Nigeria (DICON) to establish local production lines for drones, robotics and cybersecurity systems. That agreement explicitly includes “training programmes for staff from both organisations”.

This suggests the willingness of Terra to not only build drones but also the ecosystem that will sustain them.

There’s a sense of urgency kicking in on that front. Nigeria’s House of Representatives this month called for a “National Drone Industrialisation Policy” to transform the country’s drone manufacturing sector “from its current entrepreneurial stage to a structured, state-supported strategic industry”. Lawmakers noted that Nigeria possesses “a pool of engineering talent, a growing technology entrepreneurship ecosystem”, but lacks the structured policy and capital to match.

The Miva partnership offers a direct line to that talent pool for Terra while providing students with hands-on experience in a sector that is attracting global capital.

“We are shifting the narrative from consuming technology to actively engineering it,” Shayaga said.

On July 29, GoLemon stopped accepting orders. The Lagos-based grocery delivery startup, founded by former Paystack employees, will shut down its customer support on August 2, and dozens of employees will lose their jobs. The company had moved over NGN 2 B (`USD 1.4 M) worth of groceries across Lagos in 28 months and had 40,000 registered customers. None of that was enough.

“Despite our efforts to raise additional funding, we couldn’t find a sustainable path forward within the time available to us,” GoLemon said in its shutdown statement. The company claims individual orders were profitable; the average basket size was around NGN 43.7 K. But it never hit the volume needed to cover warehouses, engineering, logistics and supply chain overhead. When the next funding round didn’t arrive, the runway ended.

GoLemon is not an isolated case. It’s the latest tombstone in a graveyard that keeps growing.

Jumia Food shut down in Nigeria and six other African countries in December 2023. Jumia said market conditions made the business “unsustainable”. Bolt Food exited Nigeria the same month. “We have made the difficult decision to discontinue our food delivery operations in Nigeria due to business reasons,” Bolt said.

FoodCourt, a Y Combinator-backed cloud kitchen startup, paused operations in March 2026 after staff strikes over unpaid wages and mounting debt. Eden Life, which offered food delivery among other home services, paused its consumer business in February 2026 to refocus on corporate clients. That’s five major players gone or paused in under three years.

Nigeria’s online food delivery market hit USD 1.14 B in 2025 and is projected to reach USD 2.73 B by 2034. The demand is real. But demand doesn’t always translate to enough paying customers to sustain a business. One analysis pointed out that at its NGN 43.7 K average basket size and over NGN 2 B in orders, for instance, GoLemon processed around 57,000 orders over two years, or about 80 daily on average, which is considerably way off where it needs to be to have a shot at profitability.

GoLemon and FoodCourt shared the same “control everything” operating philosophy. FoodCourt owned central kitchens, cooked meals under multiple virtual restaurant brands and managed fulfilment. GoLemon sourced directly from farmers, operated warehouses, built its own tech platform and handled deliveries. This “full-stack” approach promised better quality and lower prices. What it actually delivered was enormous fixed costs.

“The full-stack cost trap” is how some analysts describe it. Several of the largest African startup failures shared this operating architecture. It proved lethal in the inflationary, currency-volatile conditions of 2023–2026.

In Nigeria, inflation has been running at multi-decade highs, diesel prices remain elevated, and consumer spending is under pressure. A business model that requires warehouses, kitchens, inventory and large operational teams becomes extremely difficult to sustain when every input cost continues to rise.

The survivors are doing the opposite

The contrast with Nigeria’s surviving delivery companies is visible. Chowdeck and Glovo largely operate as technology marketplaces that connect customers with existing restaurants, supermarkets and riders. They don’t own the kitchens or the inventory. Their asset-light structures allow them to scale without carrying the heavy burden of physical infrastructure.

Chowdeck, backed by Y Combinator, hit one million monthly orders in October 2025. It raised a USD 9 M Series A in August 2025. By late 2025, it had crossed into profitability.

GoLemon likely saw this coming. In December 2025, it partnered with Chowdeck, letting customers order GoLemon groceries through the Chowdeck app while GoLemon handled sourcing and fulfilment. The arrangement expanded its reach and reduced delivery complexity.

But it wasn’t enough. The fixed costs were already too high, and the funding didn’t arrive in time, as investors likely baulked at the grim unit economics and niche play without enough of a defensible moat.

This isn’t just a Nigeria problem

The struggles in Nigeria mirror what’s happening globally. Deliveroo slipped back to a GBP 19.2 M (USD 25.6 M) loss in the first half of 2025. Just Eat Takeaway missed earnings expectations in the first half of 2025, pressured by falling order volumes. The company cut about 450 jobs as it integrated automation. And on-demand platforms like Uber, Deliveroo and Foodora have operated for over a decade and still haven’t achieved consistent profitability.

The food delivery business is brutally difficult everywhere. Thin margins, high logistics costs and price-sensitive customers make profitability elusive. The difference is that in Nigeria, the operating environment is even harder, featuring poor road networks, erratic power supply, currency volatility and a venture capital market that has become far more selective.

During the 2021–2022 venture capital boom, investors funded rapid expansion in expectation of future profits. That era is over and funders are increasingly choosing sustainable unit economics over user numbers. Consumer startups that require heavy physical infrastructure have found the transition particularly painful.

The back-to-back failures of GoLemon and FoodCourt are likely to reinforce a shift already underway as investors favour backing asset-light platforms over businesses trying to own the entire value chain.

In Harare, a man buys bricks with cash and pays the builder the same way. Over months, he pours concrete for the foundation, raises the walls to window level, and carefully budgets to get the timber for the roof. Then, abruptly, he stops.

For five or six years, the house sits there—open to the sky, half-finished—while he saves up again. When he finally puts the roof on, it only covers half the structure. He moves in without tiles or paint, spending another decade completing what should have taken six months.

Dalumuzi Mhlanga grew up watching this pattern. It had nothing to do with poverty but the absence of a financial instrument that could stretch a repayment over years. They had the income, the land, and the discipline. What they did not have was a bank willing to look past their account balance.

Mhlanga is now the founder and CEO of Notto, which calls itself Africa’s first licensed alternative credit bureau. The company has analysed over a billion transaction records and generated more than eight million credit scores across the continent. But the origin story of Notto is less about big data and more about a deeply personal paradox he observed long before he wrote a line of code.

“It started with members of my own family who had been paying rent in full and on time for years,” he tells WT. “They were consistently meeting this very significant financial obligation, but they still could not access home loans.”

That contradiction became the intellectual and emotional anchor for his work. If credit is fundamentally about determining whether a person is willing and able to meet obligations consistently, then why does paying rent—often the largest monthly expense a person has—count for nothing?

The contrast crystallised during his freshman year at Harvard. Almost weekly, his mailbox contained another unsolicited credit card offer from Capital One. He had virtually no income at the time, yet the American financial system was already prepared to begin a relationship with him.

“On one side, you had people in Africa who had demonstrated for years that they could meet significant obligations, but the system could not see them. On the other side, you had a system that was willing to look beyond somebody’s account balance today.”

When the Zimbabwean founder and his team initially built Notto, they thought they were solving a product problem. They designed a specialised credit score for home loans. After two years, they realised they had started at the wrong end of the chain. The issue was not a missing product, they discovered, but absent infrastructure. The plumbing required to identify rent payments, utility bills, and mobile money behaviour simply did not exist in a standardised form.

The internal enemy

What makes this problem particularly stubborn, Mhlanga argues, is not a lack of lender interest. Banks know the opportunity is massive. The real friction sits inside the banks themselves.

“Large enterprises have governance structures and processes,” he explains. “The idea may need to go through a product committee, a risk committee, a credit committee, technology, compliance and then the people who actually release the balance sheet.”

By the time an initiative reaches the finish line, the quarterly targets that drive staff bonuses have rolled over several times.

“Infrastructure does not always produce results inside one quarter,” he adds. “Somebody is sitting there thinking: this may take too long to yield results, and may even wonder if they may still be in the organisation by that time.”

So the obstacle is less a misconception about creditworthiness and more an architecture of institutional inertia, Mhlanga reckons. Banks are designed to manage risk and hit short-term metrics. Alternative data, he points out, does not fit neatly into that machine, yet.

The loan shark paradox

After processing over a billion transaction records, Notto’s data revealed something that contradicts the industry’s cautious posture. Some of the most creditworthy Africans are already paying exorbitant rates to informal lenders and still repaying faithfully.

“You see people taking loans at 20 or 30 percent interest month on month, and they pay them back,” Mhlanga says. “The market is still a bit of a wild, wild west, and many lenders have not figured out how to price risk properly. They price for the risk of the entire portfolio, so they charge that same very high rate to some of the most creditworthy people.”

This is the hidden tax on financial invisibility. People who could easily service a low-interest mortgage are instead borrowing from loan sharks at predatory rates simply because the formal system cannot verify them.

Notto’s infrastructure tries to separate that population from the high-risk pool using non-traditional signals, such as digital payment receipts, mobile money inflows, and regular bill settlements.

The pivot that saved the company

There was a moment when Mhlanga genuinely questioned whether the model would survive. The original plan was B2C, that is, to collect alternative data directly from tenants and landlords to generate specialised scores. “The data collection was slow, expensive and difficult to scale,” he admits.

The pivot was painful but decisive. Instead of gathering raw data themselves, they decided to work with enterprises—telcos, payment gateways, and fintechs—that already had it.

They would build the infrastructure to turn that existing data into credit intelligence at scale. The shift transformed the company, but integration became the new challenge. Mhlanga notes that banks do not discard their legacy risk frameworks overnight, and alternative data must live alongside existing credit policies before it can replace them.

Who guards the guardians?

The use of non-traditional data inevitably raises questions about privacy and fairness. Mhlanga’s response is to lean heavily into regulation. Notto operates as a licensed credit bureau, he emphasises, subject to data protection, consent, and residency laws in each market.

“I do not see regulators as constraints to innovation,” he says. “Regulators are protecting consumers, and consumers need to be protected. A company should not simply say, ‘Trust us,’ especially when it is dealing with people’s financial information.”

It is a prudent stance, but it does not resolve the deeper tension in that the same data that unlocks a mortgage could also be used to exclude, price-gouge, or surveil. For now, Mhlanga trusts the oversight frameworks to draw that line.

The long bet

Looking ahead, Mhlanga measures success not by the number of microloans disbursed but by the length of the credit. He wants a young couple in Lagos, Conakry, or Mali to walk into a bank and leave with a twenty-year mortgage. Not only does that require a leap of faith about economic stability, but it also demands a cultural shift.

“Your credit score should matter more than your account balance,” he insists. “An account balance is only a picture of where you are today. Creditworthiness tells us something about your future.”

When asked if he would pass his own test using only digital transaction data, Mhlanga does not hesitate. He applies the same three filters he uses for every customer: consistent income, bills paid in full and on time, and enough residual capacity to save. He believes he passes all three.

The real question is whether Africa’s financial system will ever learn to ask the same questions. For now, millions are still building their homes one brick at a time, not because they cannot pay, but because the system refuses to believe them until they already have.

Africa is rich in the minerals the world needs to power its electric future. The Democratic Republic of Congo produces more than 70% of the world’s cobalt. Zimbabwe holds massive lithium reserves. South Africa has manganese. Yet for decades, the continent has shipped these raw materials overseas, only to import back the finished batteries at a premium. The value addition happened elsewhere, as did the jobs.

That pattern is now being disrupted. The African Development Bank has approved a EUR 100 M (USD 114 M) loan to support the construction of Africa’s first electric vehicle battery gigafactory in Morocco, marking a significant step in the continent’s long‑standing ambition to move beyond exporting raw minerals and instead capture more value through local processing and manufacturing.

The project, led by Chinese battery manufacturer Gotion High‑Tech, will require an initial investment of about USD 1.3 B to build an integrated lithium iron phosphate battery plant in the Rabat‑Salé‑Kénitra Free Trade Zone. The first phase will produce 10 gigawatt‑hours of battery cells and packs annually for electric vehicles, with plans to expand to 100 GWh, placing it among the world’s major battery manufacturing sites.

Unlike many battery projects that only assemble battery packs, the Moroccan facility will also manufacture cathodes and anodes, the two key battery components, creating an integrated battery value chain within Africa. Much of the output is destined for export to European markets.

“Battery storage is the missing link in Africa’s clean energy transition,” Kevin Kariuki, the bank’s vice president for Power, Energy, Climate and Green Growth, said in a statement. “A facility of this scale, powered primarily by renewable energy, strengthens the foundations for the large-scale integration of solar and wind power, which our grids increasingly depend on.”

The project reflects Africa’s growing push to industrialise rather than just extract. According to the AfDB, the gigafactory is expected to create more than 600 direct jobs during its first phase while achieving a 70% local industrial integration rate, helping develop domestic suppliers and technical skills.

“This gigafactory will be a major catalyst for strengthening Morocco’s industrial competitiveness and for accelerating its emergence as Africa’s manufacturing hub for sustainable mobility industries,” said Achraf Tarsim, the bank’s country manager for Morocco.

Morocco’s existing automotive industry, proximity to Europe and free trade agreements have made it an attractive destination for Chinese EV battery makers. But the project also sits at the centre of a geopolitical contest. Europe is increasingly concerned that Chinese investment in Morocco could become a backdoor for circumventing EU tariffs on subsidised Chinese cars. Meanwhile, Morocco aims to establish a complete manufacturing supply chain capable of providing parts for half a million electric vehicles per year by the end of 2026.

The gigafactory represents a test case. The continent has long talked about industrialisation. This is the first time the pieces are actually being assembled.

Getting a loan in Kenya is often as easy as downloading an app. There’s no need for paperwork, collateral, or questions asked. The money lands in the borrower’s M-PESA account within minutes. But there’s always a catch, and this often means borrowers have to hand over access to their contacts, messages, and call logs. A missed payment means one’s entire phonebook would get a text message shaming them.

Kenya has tried to fix this. In 2022, it started requiring digital lenders to get a license from the Central Bank. The idea was to separate the legitimate operators from the ones that were basically running digital shylock operations. Two hundred and fifty-two lenders got licensed. Hundreds more did not.

But the unlicensed lenders kept lending anyway. And when borrowers stopped paying, they went to court. Last week, a Nairobi Small Claims Court told them they cannot do that anymore.

In two separate cases, Tri-State Capital Limited and Mombo iCapital Limited tried to recover unpaid loans from borrowers. The amounts were not huge: KES 500 K (USD 3.85 K) and KES 162.3 K (USD 1.252 K), respectively. Before even looking at whether the borrowers actually owed the money, Resident Magistrate Gladys Kiama asked a more fundamental question: were these companies legally allowed to be lending in the first place?

Neither could prove it held a CBK licence. Both cases were struck out.

The ruling does not mean borrowers can simply ignore debts they genuinely owe, the court held. What it means is that those running a loan app without a licence cannot walk into a courtroom and expect the judicial system to enforce their contracts.

For the hundreds of loan apps still operating without licences, this changes the math considerably. Getting a licence was already a regulatory requirement. Now it is also the difference between having legal recourse when borrowers default and having none at all. For borrowers, it is a measure of protection against lenders who never followed the rules in the first place.

The ruling also follows a separate Small Claims Court decision earlier this month that barred digital lenders from recovering excessive interest and unexplained charges from borrowers, reinforcing the application of the in duplum rule under the Kenyan Banking Act. In one case, the court ruled against a vehicle financing company after a KES 400 K loan ballooned to KES 976.75 K.

Kenya’s licensing push was designed to fix problems that had long plagued the digital lending market, such as high interest rates, aggressive debt collectors, and the misuse of borrowers’ personal data. The framework is meant to ensure that only operators meeting minimum standards can legally run loan businesses in Kenya.