The global e-commerce landscape is undergoing a seismic shift, and the epicentre isn’t Silicon Valley or Shenzhen—it’s Africa. A burgeoning young, digitally connected population, coupled with rapidly expanding economies, has ignited an e-commerce boom that’s capturing the attention of industry titans like Amazon and Alibaba.

A new report by Kyshi, a global payments provider with a focus on Africa, paints a vivid picture of this burgeoning market. It underscores the continent’s immense potential and the factors driving its rapid growth.

Key African markets like Nigeria and South Africa are on track for multi-billion-dollar e-commerce valuations in the near future, with long-term projections exceeding USD 1 T.

High mobile phone penetration and the widespread use of mobile money platforms like M-Pesa have created a fertile ground for mobile commerce innovation.

Additionally, Africa boasts the world’s youngest population, with a significant portion under 25. This demographic is increasingly online and eager to engage with global brands. Many areas, particularly in Central and West Africa, are ripe for e-commerce disruption, offering first-mover advantages for agile companies.

The Global Scramble

While homegrown players like Jumia have blazed a trail, recent challenges have created an opening for global giants. Amazon’s recent launch in South Africa and Alibaba’s strategic partnerships with local firms signal a new phase of international competition.

However, Africa’s e-commerce landscape presents unique challenges. Limited infrastructure and insufficient warehousing options necessitate innovative solutions, with local players leading the charge.

Low credit card penetration and diverse payment systems require adaptable solutions, Kyshi notes in its report, adding that its Merchant of Record (MoR) service and other fintech innovations are addressing this complexity.

The State of E-commerce in Africa 2024 Report also submits that building consumer trust and navigating diverse regulatory environments are paramount. Partnerships with local businesses can help mitigate these challenges. As global giants enter the fray, the research asserts, local players and innovators are key to navigating the unique challenges and opportunities.

The Stakes are High

Kyshi’s report provides valuable insights and findings into the current state of the African e-commerce market, players, key trends, challenges, and growth prospects. It offers analysis and actionable insights to help businesses navigate the African e-commerce market.

The report emphasises a timely reminder that the African e-commerce gold rush is in full swing. Companies that hesitate risk losing market share, revenue, and brand equity as competitors establish a foothold.

The African continent offers a diverse range of opportunities for businesses, from fashion and electronics to groceries and healthcare. Thus, the report highlights the urgency for global e-commerce players to act decisively. By leveraging local partnerships, innovative technologies, and a deep understanding of African consumers, these companies can unlock the continent’s vast potential and secure their place in the future of e-commerce.

As you may well know by now, yours truly was in attendance on Day 1 of the exciting Moonshot by TechCabal, where Lagos’ Eko Convention Centre was buzzing with tech entrepreneurs, investors, and all-around disruptors.

The event brought together a vibrant mix of founders, funders, regulators, and tech ecosystem stakeholders, all converging to share insights and celebrate innovation in Africa’s tech industry.

But let’s talk about the real highlight—the ‘Don’t Be a F@!head’ masterclass*. Yes, you read that right. Featuring two of Africa’s most prominent early-stage tech investors—Kola Aina of Ventures Platform and Olumide Soyombo of Bluechip Technologies and Voltron Capital—this session was essentially Startup School, but with whiskey.

And honestly, it was as entertaining as it was insightful. I grabbed a seat and headsets (thankfully) and settled in for what felt like an unfiltered, truth serum-infused therapy session for first-time founders.

With glasses and mics switching hands, Aina and Soyombo offered first-time founders a candid, no-nonsense guide to navigating the startup world. Their conversation, filled with humour, hard truths, and practical wisdom, drew a large and engaged audience on the Startup Stage at Moonshot.

Here’s a breakdown of the key takeaways from this memorable session.

Lesson 1: Be Teachable

Soyombo kicked things off with some simple, but often ignored advice: “Be teachable.” Basically, if you think you already know everything, good luck. As he put it, startups are a constant learning experience, and the founders who succeed are the ones who don’t let their egos get in the way. From his tone, it was clear—ego-driven founders don’t last long in his book. Cue the nodding from the crowd (and me sipping my water, pretending it was whiskey).

Lesson 2: Don’t Lie

Now, we’ve all heard “Honesty is the best policy,” but Aina put it bluntly: “Don’t lie.” If you screw up, own it. Transparency is key—especially with investors. He gave off the vibe of someone who’s been lied to by a few too many founders in his time. “If you’re condescending or deceitful, investors will figure it out eventually,” Aina warned. It’s not rocket science, but founders need to realise that a startup-investor relationship is built on trust, not bravado.

Lesson 3: Not Giving Updates is a Major No-No

Soyombo chimed in with one of the biggest pet peeves for any investor: radio silence. “Not giving updates is bad,” he said, staring into the crowd like he could sense a few guilty founders sitting right there.

It’s not just about keeping investors in the loop—it’s about keeping yourself accountable. Aina added, “The best founders use the reporting cycle as a moment of truth for themselves.” So, basically, if you’re avoiding those update emails because you have no progress to show, that’s exactly when you should be writing them.

Lesson 4: Beware of the Cap Table Destroyer

Aina dropped some serious gems on how to structure your cap table, and if you weren’t paying attention, you probably missed one of the most important tips of the day: “Don’t dilute your company too fast.”

Founders often get excited about that first cheque and give away too much equity. According to him, keep it under 15%. If you give away the farm too early, you might end up with little control and even less ownership. In his words: “An investor isn’t doing you a favour.” This was Aina politely reminding us that founders have value too, so don’t roll out the red carpet for just anyone.

Lesson 5: Respect the Capital

Soyombo got a little spicy here, sharing a personal story about a founder he’d backed. Shortly after getting funded, this founder showed up at Soyombo’s house, casually asking him how much it cost. (Spoiler alert: this was a red flag.)

And then, there’s that other founder jetting off to Ghana, staying at the Kempinski for months on end, and burning through capital like it was Monopoly money. “Respect capital,” Soyombo stressed. If you start acting recklessly with investor money, you’re not just burning your startup—you’re burning bridges.

Lesson 6: Investors are People Too (Surprise!)

Aina dropped another golden nugget: “Founders need to have more empathy for those on the other side.” I mean, I get it—everyone’s stressed, but investors are putting their money (and reputation) on the line. If you ghost them for months without updates, it’s not just rude—it’s career suicide.

And it’s even worse for the African ecosystem when global investors lose confidence as it’s harder for local VCs to pitch vital sources for their funds. All because some founders can’t manage basic communication. So, if you think ignoring your investors makes them go away, think again.

Lesson 7: No, You Can’t Just Slide Into a VC’s DMs

If you’ve ever thought about cold-messaging a VC on LinkedIn and waiting for the funding to roll in, I’m sorry to tell you, that’s not how it works. “Find common ground and warm intros to catch a VC’s attention,” Soyombo advised. Cold emails might work once in a blue moon, but chances are, they’ll just get lost in the shuffle.

Moral of the story: relationships matter, so start building them before you ask for that cheque.

Lesson 8: Finding a Cofounder Is Basically Marriage

Soyombo dropped another piece of advice for non-technical founders, encouraging them to look for cofounders in solid employees at Tier-1 startups. But his analogy was gold: “Finding a cofounder is like getting married.” Compatibility matters. You can’t just pair up with someone because they can code. Building a great team requires more than just technical skills—it’s about shared values, vision, and the ability to stick it out when things get tough. Just like marriage.

Lesson 9: How to Gracefully Shut Down

This one was heavy, but necessary. The reality is that startups fail. But how you handle that failure is crucial. Soyombo told the story of Cova, a startup that raised USD 800 K but saw the writing on the wall as it neared failure. Instead of burning through the remaining cash and quietly shutting down, the founder chose to return some of the money to investors, offering 25 cents on the dollar.

“Shutdowns don’t just happen all of a sudden; you can sense it coming,” Aina said in support, emphasising the importance of orderly wind-downs. As painful as it might be, handling a shutdown the right way can give founders another shot at success.

And there you have it. If I had to sum up this masterclass in a sentence, it would be this: Don’t be an ego-driven, irresponsible, ghosting founder who can’t handle failure. That, my friends, is how you lose investor trust faster than you can say “fundraising round.”

As media entrepreneur Fatu Ogwuche, who co-hosted the Startup Stage where the masterclass took place, later posted, “This is the most grown masterclass I’ve ever seen 😂.” And, indeed, the masterclass left many first-time founders in the audience with valuable lessons and a lot to think about as they continue their journeys in Africa’s rapidly growing tech ecosystem.

Moonshot Day 1 was packed with insights, but this masterclass was the no-BS guide every first-time founder needed. Hopefully, everyone took notes—because these two VCs didn’t come to play.

The days of quietly holding onto your crypto assets without reporting them to the tax authorities are nearing an end as the South African Revenue Service (SARS) announced that crypto assets will be included in its compliance programs.

This move comes as no surprise, given the surge in digital currency use, with over 5.8 million South Africans—roughly 10% of the population—now holding some form of cryptocurrency. Southern Africa, in fact, boasts one of the highest uptakes of Bitcoin in the world.

SARS has raised concerns that many taxpayers are failing to declare their crypto assets in their tax returns, despite being legally required to report all forms of income and assets. In response, the tax authority has partnered with the Financial Sector Conduct Authority (FSCA) and is working with local crypto exchanges to collect information on crypto assets.

This collaboration is part of a broader initiative to ensure tax compliance by monitoring registered Crypto Asset Service Providers (CASPs).

To further tackle non-compliance, SARS has begun issuing query letters to taxpayers with crypto assets. These letters aim to gain insight into taxpayers’ investment in crypto assets and the trades undertaken to enable SARS to assess taxpayers’ compliance in this regard. This effort is supported by advanced technologies such as artificial intelligence and machine learning, which SARS say it is using to enhance its audit capabilities.

For those looking to stash their crypto assets in offshore accounts, SARS is also participating in international agreements to exchange taxpayer information with other countries, particularly in relation to offshore crypto accounts. A multilateral agreement set to be signed by Finance Ministers in November 2024, is expected to facilitate the cross-border exchange of such data.

Meanwhile, SARS says it is “working assiduously to make it easy and simple for taxpayers and traders to seamlessly comply with their obligations.” These efforts are intended to support its strategic Intent of fostering a culture of voluntary compliance.

For those concerned about their compliance, SARS has reiterated the availability of its Voluntary Disclosure Programme (VDP), which offers taxpayers an opportunity to regularize their crypto asset declarations. However, this option is only available if taxpayers come forward before they are flagged for audit.

This development comes after FCSA’s recent crackdown on illegal crypto operations in July. The FSCA, having declared crypto assets as financial products in October 2022 due to increasing risks and fraudulent activities, is now actively investigating up to 30 entities operating without proper licenses.

According to reports by the regulatory body, it had received 383 applications for licenses as of July 2024, approving 63 but rejecting several others for failing to meet the necessary regulatory standards. This brought the total number of licensed crypto exchanges in South Africa to 138.

SARS’ actions signal a broader effort to bring more transparency and order to the chaotic world of cryptocurrency. While many South Africans and businesses have embraced digital currencies as a payment method, investment tool, or hedge against inflation, the increased scrutiny from tax authorities signals that the era of under-the-radar crypto activity is drawing to a close.

Pan-African fintech giant Flutterwave has expressed satisfaction with the recent decision by the Kenyan Court of Appeal, which upheld a lower court ruling in a long-standing legal dispute with former employee, Clara Wanjiku Odero, now Founder/CEO of Credrails, an open finance platform backed by prominent global investor SoftBank.

The court dismissed Odero’s appeal, awarding her KES 250 K (approximately USD 2.5 K) in total damages, a sum far smaller than what she had reportedly sought for emotional distress and reputational damage.

Odero’s claims stemmed from Flutterwave’s failure to remove her contact information from its M-Pesa Paybill account after her departure from the company in 2018, leading to customer inquiries directed at her long after she left her role as Head of Implementation for Rest of Africa.

Odero argued that this oversight caused her public embarrassment, emotional distress, and reputational harm after she was erroneously roped into a scandal involving a shady customer. However, the appellate court agreed with the lower court’s decision, noting that Odero had not provided sufficient evidence to support her claims of reputational damage.

Justice Alexander Muasya, in delivering the ruling, emphasized the court’s position, stating: “The award in damages was capped at KES 250 K by the Magistrate. I do not find reason to disturb his finding considering that there was no proof of loss of reputation. The sum was reasonable.”

In response to the ruling, Flutterwave told WT in a statement that it welcomed the court’s decision and reiterated its confidence in the legal process. “We welcome the Court’s decision to dismiss the claimant’s appeal and to award Flutterwave the costs of the appeal. This outcome reinforces our confidence in the justice system and the integrity of the legal process,” the company said. Wanjiku declined to comment.

Flutterwave also reiterated its commitment to fostering a positive workplace culture, stating: “As we move forward, our focus remains on growing the company while ensuring that every employee feels safe, valued, and respected. We’re committed to fostering a culture of safety, inclusivity, and collaboration, and we encourage open conversations at all levels of our organization.”

The legal battle between Odero and Flutterwave first gained public attention after Odero shared her experiences in a 2022 Medium post, accusing Flutterwave’s CEO, Olugbenga Agboola, of bullying and harassment. She alleged that her treatment at the company left her feeling belittled and tarnished, claims that Flutterwave has consistently denied.

The company stated: “As an organisation that continuously strives to create an environment where employees feel secure and safe, we take the recent allegations of bullying from a former employee very seriously. We categorically state that there is no place for bullying or harassment of any kind in our workplace.”

Despite Odero’s efforts to claim higher compensation, the court found no direct evidence linking Flutterwave’s negligence to any reputational harm. The court awarded her KES 100 K for emotional distress and KES 150 K as aggravated damages—well below the amount initially sought. Moreover, the appellate court dismissed Odero’s appeal and ordered that Flutterwave be awarded the costs associated with the appeal.

This ruling marks the conclusion of a legal saga that began after Odero’s departure from Flutterwave and highlights the importance of clear separation protocols for departing employees. The court’s decision has also reinforced Flutterwave’s position that its handling of the situation, though regrettable, did not merit the level of compensation Odero had demanded.

Flutterwave, now valued at over USD 3 B, acknowledged its delay in removing Odero’s contact information but had earlier expressed regret and offered to resolve the issue amicably. Nevertheless, the company stood firm in denying the broader allegations of harassment.

This case exposes the complexities that can arise when employee exit procedures are not handled with precision. It also emphasises the need for clear communication channels and robust HR practices to avoid potential legal disputes. Flutterwave’s focus, as stated in its response, remains on growth and creating a positive workplace environment.

For Flutterwave, the ruling represents closure in a dispute that has spanned several years, allowing the company to continue expanding its operations and cementing its status as one of Africa’s leading fintech firms.

As investment opportunities in Africa’s startup landscape become increasingly competitive, the need for founders and investors to find common ground and get on the same page as they navigate shifting dynamics has become imperative. The role of investor reporting has thus come to the fore.

However, while reporting frequency has improved, many startup founders still feel that investors don’t fully understand their business or market. This disconnect creates ongoing challenges for investor confidence and highlights a gap between what founders report and what investors find valuable.

A recent report from Wimbart, a PR agency specialising in African and emerging markets with a notable tech clientele, highlights the critical role of investor reporting. The findings reveal that effective communication between startups and investors is not just beneficial but essential for navigating the current subdued funding environment, where investments have declined.

A Shift in Reporting Demands

The report, titled “Startup Performance Reporting in Africa: Aligning Startup and Investor Expectations,” indicates that 72.2% of investors have intensified their reporting requirements over the past 18 months.

This change reflects growing concerns regarding financial stability (33.3%), transparency (25%), and the need for enhanced performance monitoring (16.7%). With nearly two-thirds (64.7%) of investors initially receiving monthly updates from portfolio companies in 2023, this figure dropped dramatically to 27.8% by 2024. Investors are now favouring quarterly reports, which have risen from 29.4% to 50%, suggesting a shift towards a more manageable reporting structure.

This new trend underscores the increasing reliance on regular reports to assess the “quality of founder,” a key determinant in follow-on funding decisions. An overwhelming 88.8% of investors agree that the quality of these reports significantly impacts their assessment of a founder’s ability to execute business objectives. One investor noted, “For performance tracking and risk assessment, looking at previous reports helps assess a founder’s track record.”

The Disconnect Between Founders and Investors

Despite the apparent need for robust reporting, a notable disconnect persists between startups and investors. 40% of startup founders feel that investors do not fully understand their business or market, which creates challenges in communication and investor confidence. This sentiment is echoed by the report’s findings that 60% of investors view the founders themselves as the biggest barrier to meaningful reporting. Common complaints include a lack of focus in reports (27.8%) and perceived inaction from founders (16.7%).

The report highlights that 70.6% of investors are primarily focusing on pre-seed and seed-stage companies. This concentration aligns with the early-stage nature of Africa’s startup ecosystem, where venture capital firms aim to support nascent businesses. However, while 93.9% of founders recognise the importance of regular updates for maintaining good relationships, only 42.4% believe that investors genuinely grasp their business intricacies. This gap emphasises the need for both parties to bridge their understanding to foster a more productive relationship.

The Importance of Quality Metrics

Founders are increasingly aware of the necessity of detailed reporting. Over 57.6% cite the effort required to produce such reports as the biggest barrier. Yet, the effort often pays off: 60.6% of founders report receiving direct intervention or support from investors as a result of their updates.

However, tensions arise over what constitutes essential reporting details. While 70% of founders utilise standardised templates, many feel that critical performance metrics—such as customer acquisition costs (CAC), customer retention rates, and lifetime value (LTV)—are frequently overlooked by investors.

The Wimbart report suggests key recommendations to enhance investor-startup relationships. Investors are urged to clearly communicate their reporting requirements and expectations, possibly providing templates to facilitate adherence. Startups should avoid vanity metrics and focus on meaningful indicators that demonstrate their understanding of the business.

In a challenging fundraising environment, Jessica Hope, Founder and CEO of Wimbart, emphasises that “in today’s tough fundraising environment, startup founders cannot afford to overlook clear and consistent reporting – it’s not just beneficial but essential.” The shift in investor priorities towards sustainability and long-term performance further emphasises the need for effective communication.

The evolving dynamics of investor reporting in Africa highlight the critical importance of clear communication in fostering robust relationships between startups and investors. As the funding landscape continues to tighten, addressing the disconnect between what founders share and what investors value will be vital for securing future investments. By embracing effective reporting practices, both parties can navigate the complexities of Africa’s startup ecosystem more successfully.

The highly anticipated AfriLabs Annual Gathering 2024 will take place on November 6th and 7th in Cape Town, South Africa. This ninth iteration of the Gathering, themed “Uniting Innovation,” promises a transformative agenda with innovators and thought leaders from across Africa and beyond.

Known for its tradition of showcasing a new host country each year, the event offers a rare opportunity for local and international stakeholders to engage with the host nation’s innovation ecosystem. This year, Cape Town’s vibrant entrepreneurial scene will be in the spotlight.

The 2024 Gathering will tackle key issues such as artificial intelligence, blockchain, sustainable development, and digital inclusion. The program aims to foster collaboration, spark thought-provoking discussions, and drive impactful solutions for Africa’s growth and prosperity. Innovators from sectors like fintech, healthtech, and the green and blue economy will share insights, offering a comprehensive view of Africa’s rapidly evolving innovation landscape.

RLabs will host this year’s event at the Cape Town International Convention Centre. As a leader in South Africa’s innovation space, RLabs is the ideal host for an event that brings together ecosystem builders, investors, and partners across Africa and its diaspora.

During a recent info session, Moetaz Helmy, AfriLabs Board Chair, highlighted the Gathering’s importance: “This gathering is more than just a meeting of minds—it’s about creating a legacy of innovation across Africa. Each year, we see how bringing the event to a new country stimulates new partnerships, ideas, and opportunities.”

Who can participate?

Whether you’re a startup founder, investor, policymaker, or innovation enthusiast, the AfriLabs Annual Gathering 2024 is a unique opportunity to engage, learn, and help shape Africa’s digital future.

You can book your slot here to be part of Uniting Innovation in Africa and drive positive change across the continent.

If you’re interested in contributing or having your brand represented at the event, get in touch to explore partnership opportunities.

As remote work continues to reshape the global workforce, African nations are positioning themselves as attractive destinations for digital nomads. Kenya’s recent introduction of its Class N Digital Nomad Visa is the latest in a wave of similar initiatives across the continent, designed to draw in skilled remote workers who contribute economically without taking local jobs. Kenya’s move reflects broader trends in countries like Mauritius, Namibia, Seychelles, Cape Verde, and South Africa, all of which have launched similar programs.

Kenya’s Play for Global Talent

On October 1, 2024, Kenya officially amended its immigration regulations to introduce the Class N Digital Nomad Visa, offering a legal framework for remote workers to live in the country while maintaining foreign employment.

President William Ruto introduced the Visa with much fanfare at the 2024 Magical Kenya Travel Expo, highlighting Kenya’s goal to boost tourism and attract global talent. The visa enables foreign nationals working for companies outside Kenya or freelancing for international clients to reside in the country for extended periods.

To qualify for the visa, applicants must demonstrate a valid passport, proof of remote work, an assured annual income of at least USD 55 K from non-Kenyan sources, accommodation arrangements, and a clean criminal record. Notably, digital nomads are prohibited from taking local jobs, ensuring the protection of Kenya’s labour market.

While the visa supports long-term residency, it also offers a pathway to permanent residency and, eventually, citizenship. Kenya hopes this will draw more remote professionals, particularly those working in tech and innovation, to bolster the country’s growing tech ecosystem.

“By attracting skilled foreign workers, Kenya aims to boost its tourism industry, stimulate economic growth, and foster innovation,” the government noted, positioning the visa as a key part of its strategy to reinvigorate its economy post-pandemic.

The Growing Trend Across Africa

Kenya’s visa isn’t an isolated move. Several other African countries have already jumped on the digital nomad bandwagon. Mauritius introduced its Premium Travel Visa in 2020, allowing digital nomads and tourists to stay for up to 12 months, with a monthly income requirement of USD 1.5 K.

Namibia, in 2022, launched a similar visa, with a monthly income threshold of USD 2 K, aimed primarily at boosting its tourism sector. Seychelles and Cape Verde have also created digital nomad programs, each with its own set of financial and accommodation requirements. South Africa is also getting ready to roll out its version, with an annual income requirement of ZAR 1 M (~USD 53 K), making it comparable to Kenya’s income threshold.

The shared intent among these countries is clear: to invite remote workers who bring foreign income into their economies without competing with local labour. Digital nomads typically spend on housing, food, and leisure, benefiting local businesses.

These visa programs also have the added benefit of positioning the host nations as forward-thinking, modern destinations for remote workers, many of whom are highly skilled professionals in tech, design, and entrepreneurship.

Can Africa Deliver on its Promises?

While these initiatives are promising, there is scepticism about the actual implementation, particularly in Kenya. The country has a history of ambitious projects that fail to materialise. For instance, Kenya’s Startup Act was once hailed as a game-changer for its tech ecosystem but has yet to be fully realized. Similarly, the much-touted Konza Techno City, billed as East Africa’s tech hub, has faced delays and bureaucratic hurdles.

While the Class N Visa has officially been gazetted, Kenya’s track record raises concerns about how quickly it will be implemented and whether the infrastructure will follow.

Nonetheless, the appetite for innovation remains strong. Remote workers are likely to find Africa’s combination of affordable living, rich culture, and growing tech ecosystems appealing. And as Europe scales back its digital nomad incentives, African nations could capture a new wave of remote professionals seeking fresh opportunities.

The Future of Work in Africa

Africa’s digital nomad visa trend is part of a larger global shift in how and where work is conducted. As more professionals untether from traditional office environments, they seek locations that offer both professional opportunities and a high quality of life. African nations, with their varied landscapes and burgeoning tech scenes, could become major beneficiaries.

Kenya’s introduction of the Class N Visa is a sign of the times. As more countries follow suit, Africa could become a new hub for remote workers, bringing fresh talent and investment into the continent. However, the success of these programs rests on how well governments execute their plans, manage expectations, and ensure that the promised opportunities become realities.

For now, Kenya—and Africa as a whole—seems ready to embrace the future of work. Whether that future becomes a reality will depend on how well these nations balance ambition with execution.

Egypt’s leading fintech company, Fawry, has marked a significant milestone by surpassing EGP 1 B (~USD 20 M) in total Buy Now, Pay Later (BNPL) disbursements just over a year after launching the service.

The BNPL sector, which allows consumers to spread payments over time without upfront costs, has been booming worldwide. Fawry, long established as a payments platform with services like bill payments, mobile top-ups, and e-commerce, saw an opportunity to expand into consumer finance, introducing BNPL as part of its growing portfolio in mid-2023. The quick uptake of the service points to strong demand in Egypt for flexible financial solutions, especially amid economic challenges.

CEO Eng. Ashraf Sabry emphasised the significance of this achievement, stating, “This milestone is a testament to the company’s ability to leverage its existing consumer base while introducing innovative services that cater to underserved segments of the population.” Fawry’s entry into BNPL, he noted, aligns with the company’s mission to drive financial inclusion in Egypt. By integrating BNPL into its broader suite of services, Fawry positions itself as a comprehensive financial platform.

The numbers are impressive. In just one year, Fawry’s BNPL business has generated USD 20 M in revenue. The company leveraged its digital infrastructure, particularly its myFawry app, which has over 10 million downloads, and the myFawry prepaid card, to fuel this growth. These tools allowed Fawry to seamlessly onboard customers and expand its reach, positioning itself ahead of many local competitors in the BNPL space.

However, the success comes in the context of Africa’s broader challenges in adopting BNPL services. According to Tobi Odukoya, CEO of Nigerian BNPL startup CDCare, “The high cost of credit in Africa poses a unique challenge for BNPL providers.” In Nigeria, the average interest rate is 16.5%, while retail profit margins sit between 5-10%, making it difficult for BNPL models to sustain profitability.

This reality holds for Egypt as well, where inflation and devaluation have strained consumer purchasing power. Nonetheless, Fawry has managed to navigate this tough economic landscape by focusing on essential goods and services, which are in high demand, particularly among low- and middle-income households.

Fawry’s foray into BNPL also signals a broader shift in the region’s fintech industry. Africa’s BNPL market is seeing increasing competition, with companies like South Africa’s PayFlex and Nigeria’s CredPal entering the fray. However, Fawry’s entrenched market position in Egypt gives it an edge. The company already processes more than 6 million transactions daily, serving over 52.5 million users each month. By embedding BNPL within its existing ecosystem, Fawry reduces the risk of customer churn and strengthens loyalty.

Fawry’s approach also taps into the cultural sensitivities around debt in Africa. In many parts of the continent, particularly in Muslim-majority regions, there is an aversion to traditional forms of credit. Islam prohibits interest-based lending, which limits the appeal of conventional credit products. Fawry’s BNPL service provides a viable alternative for these consumers, allowing them to make purchases on credit without the need for bank loans or credit cards.

Despite the promising start, the path ahead is not without challenges. BNPL companies face the risk of high default rates, and in Egypt, where financial literacy and debt management can be issues, Fawry will need to carefully manage this aspect of its business. Furthermore, as more players enter the BNPL space, maintaining its competitive edge will require continuous innovation. Fawry’s early success, however, positions it as a leader in Africa’s burgeoning BNPL market.

As Africa’s fintech sector continues to evolve, Fawry’s BNPL venture provides a glimpse of how established companies can expand into new territories while maintaining their core strengths. Whether Fawry’s success can be replicated in other African markets remains to be seen, but the company’s quick rise in Egypt’s BNPL scene sets a high bar for its competitors.

Nigerian startups are facing new tax regulations introduced by the Federal Government following strict changes quietly unveiled this month. The rules, which will take effect on January 1, 2025, promise to simplify tax compliance but could create fresh challenges for the country’s burgeoning tech ecosystem.

At the heart of the regulations is a requirement for businesses, including startups, to have taxes deducted at the point of payment. Entities like corporations, government agencies, and public authorities must withhold taxes before transferring payments to businesses. This method is designed to reduce tax evasion and ensure compliance but could add new layers of complexity for startups already navigating Nigeria’s tough business environment.

Startups Not Spared from the Tax Burden

The scope of the regulation, known as the “Deduction of Tax at Source (Withholding) Regulations, 2024”, extends across various types of income—capital gains, corporate income, and personal income—and applies broadly to businesses, regardless of size or sector.

Nigerian startups, which often operate on slim margins, are not exempt. However, companies with less than NGN 2 M (USD 1,197) in monthly transactions may sigh a little relief. These businesses are exempt from withholding tax deductions, but only if they can prove their Tax Identification Number (TIN) is valid.

For startups without a valid TIN, the penalty is steep: double the normal withholding tax rate. This puts even greater pressure on smaller businesses to maintain up-to-date tax records.

Remitting the deducted taxes is another significant element of the new regulations. Businesses are expected to remit these deductions to either the Federal Inland Revenue Service (FIRS) or the relevant State Internal Revenue Service. The deadlines are tight: FIRS requires remittance by the 21st of the following month, while state authorities expect remittances as early as the 10th.

Failure to remit on time carries its own set of penalties, including fines and administrative charges, which could further erode startup cash flow.

New Rules, New Headaches

Though framed as a means to streamline tax compliance, the new withholding tax regulations add an extra administrative burden on startups. Businesses are required to submit detailed returns for each deduction, including the name, address, and TIN of the payer. Receipts for deducted taxes must also be issued, and any misstep in this meticulous process could invite penalties.

These regulations arrive at a time when Nigerian startups are already navigating a complex environment. While some companies have scaled rapidly, others face a tougher road ahead contending with funding woes, layoffs, and valuation cuts.

The government has included some exemptions to soften the blow. Payments related to Real Estate Investment Trusts, securities lending, and compensation payments are all exempt from withholding taxes. Even so, the exemptions may be too narrow to provide substantial relief for many tech companies.

Startups that rely on payments from across borders will also need to consider double taxation treaties. While these treaties are meant to prevent being taxed twice on the same income, navigating them can be tricky for smaller firms with limited resources.

The upcoming tax regime follows closely on the heels of a broader trend in Africa, where governments are tightening regulations and enforcement in the tech startup space. Cryptocurrency platforms like OKX have already felt the pinch, announcing plans to exit Nigeria’s market due to “unfavourable regulatory conditions.”

For Nigerian startups, the 2024 withholding tax regulations present a new set of challenges, adding to the existing struggles of scaling in a competitive and often unpredictable market. The government’s promise of simplicity and ease may fall short for those tasked with complying with these new requirements, especially if their resources are stretched thin by the need to keep up with their tax obligations.

As the January 2025 implementation deadline looms, startups will need to quickly adapt to these new regulations, or risk facing penalties that could stifle their growth. While the intent behind the law is to foster better compliance and align with global standards, it remains to be seen whether this will truly ease the burden on Nigeria’s tech ecosystem—or create more tax headaches for its most innovative players.

Featured Image Credits: Alexander Oamen/Medium

GSMA MWC Kigali will return to the Kigali Convention Center from 29-31 October 2024. 

MWC Kigali, Africa’s largest and most influential connectivity event, will convene powerful innovators and political leaders from across the continent. It is geared towards driving the digital economy forward and enabling socio-economic growth. 

MWC Kigali will deliver a range of keynotes and panel sessions hosted by industry thought leaders and leading enterprises, focussed around the four event themes: Connected Continent, The AI Future, FinTech, and Africa’s Digital DNA. Recently confirmed speakers include  Airtel Africa’s CEO, Sunil Taldar; Amini’s Founder & CEO, Kate Kallot;  the GSMA’s Director General, Mats Granryd; the ITU’s Secretary-General, Doreen Bogdan-Martin; Lelapa AI’s CEO and Co-founder, Pelonomi Moiloa; MTN Group’s FinTech CEO, Serigne Dioum; Republic of Rwanda’s Minister of ICT and Innovation, Hon. Paula Ingabire; Take Back the Mic’s CEO & Founder, Derrick Ashong and, Wi-Flix’s CEO, Louis Manu.

For the first time in Africa, the GSMA Ministerial Programme will be hosted at MWC Kigali, marking a new chapter in the commitment to advancing the digital agenda in Africa. The programme will convene the most influential telecommunications leaders from across Africa to discuss policy and regulatory topics key to the region.

The Mobile for Development (M4D) team will again play a central role at the event, driving innovation in digital technology to reduce global inequalities. M4D will host the ‘Mobile for Development Theatre’, a dedicated space for keynote sessions, panels, and discussions. Themes will range from AI for impact and humanitarian innovation, agriculture and climate, to digital inclusion and gender. Also returning this year is the Mobile Money Leadership Forum, which will explore key trends and innovations in mobile financial services.

The MWC Kigali keynotes will cover Africa’s most pressing digital connectivity issues. Keynote 1 will discuss how digital technologies drive socio-economic development in Africa to address the continent’s unique challenges. Keynote 2 will focus on the transformative potential of AI, including how it can drive sustainable and inclusive growth across Africa. Keynote 3 will see speakers explore the rapid evolution of Africa’s Fintech landscape and the technologies impacting investment opportunities. Keynote 4 will explore how the evolving content landscape allows African content creators to be heard and celebrated globally. 

An agenda of GSMA Summits will be hosted during the event, inviting industry leaders and policymakers to discover the issues affecting enterprises in areas from network security to diversity in tech: 

• The Security Summit will tackle the most pressing security challenges mobile network operators face today in the rapidly evolving cyber risk landscape. 
• The Digital Summit will explore the digital economy’s potential in Africa, exploring how digital technologies and policy reform can drive significant socio-economic growth. 
• The AI Summit will cover both the vast potential and the associated risks of AI technologies in Africa as the technology’s prevalence grows in the global economy. 
• The 5G Summit will address the barriers preventing the technology’s widespread adoption and ways to unlock its potential for both enterprises and consumers. 
• The Diversity for Tech Summit will focus on the urgent need for greater disability inclusion in Africa’s tech sector, ensuring that people with disabilities can access the tools and opportunities they need to succeed. 

MWC Kigali is held alongside the Africa Health Tech Summit and FEWA (Future of Education and Work in Africa), offering an in-depth exploration of connectivity challenges and opportunities in the health and education sectors. We are proud to have the support of our stellar line-up of sponsors, exhibitors, and event partners, including Africa CDC, Africa Union, Huawei, inABLE, MTN, the Republic of Rwanda, Smart Africa, and ZTE.

Register today to attend MWC Kigali, 29-31 October 2024
For more information, follow our updates on the MWC Kigali Press Zone or visit www.mwckigali.com. Accredited media are invited to register here for a complimentary pass, which is required for access to the press centre.