The Ethiopian Securities Exchange (ESX) last year set to raise $11.07 million to start operations as part of a larger push by Prime Minister Abiy Ahmed to liberalise and modernise the economy.

“We are thrilled to have exceeded all our expectations in terms of the capital raise and are excited by the overwhelming confidence shown by investors in the long-term prospects of both ESX,” said Tilahun Kassahun, ESX chief executive.

The Ethiopian government will hold a 25% stake in the ESX through the Ethiopian Investment Holdings (EIH) and its subsidiaries including Ethiotelecom and Commercial Bank of Ethiopia, while private and institutional investors will be allocated a 75% stake.

NGX Group is among the top institutional investors that have injected capital into the operationalisation of the bourse alongside FSD Africa, a UK-backed non-profit financial institution, and Trade and Development Bank Group (TDB), the financial arm of the Common Market for Eastern and Southern Africa (COMESA) trade block.

“Strategic foreign investments by TDB, FSD Africa, and [the] NGX Group are particularly important in allowing the transfer of technical know-how and best practices as well as other areas of long-term strategic value that we will explore,” Kassahun added.

The NGX is one of the largest securities exchanges in Africa with a market capitalisation of ₦58.66 trillion ($41.8 billion) and will support ESX with technical experience in developing the bourse structure, trading rules and marketing segments.

The collaboration with the NGX has already helped the ESX develop a rule book to guide its operations. 

The ESX also closed the fundraising with commitments from domestic investors including 16 local banks, 12 insurance firms, and 17 private entities. The exchange is expected to launch sometime this year, further attracting foreign investors into the populous Horn of Africa nation.

While PM Ahmed has moved to liberalise Ethiopia’s economy since coming to power, it is still largely controlled by the state with little private sector involvement. For instance, Ethiopia has no investment banks–suggesting that businesses can only raise capital from commercial banks.

“I called him the Oracle of Isiokpo. My oracle. Because if Warren Buffet was the Oracle of Omaha; the best investor in America, then we needed our oracle in Africa. And his name was Herbert Wigwe. I called him my blueprint because he provided a road map of hard work, discipline and hustle that I follow/understand, like the blueprint of a building,” Ola Brown, founder of HealthCap, a venture capital firm that invests in fintech and health tech companies, wrote in a riveting tribute. 

Herbert Wigwe was many things to many people, but for many founders and executives in Nigeria’s tech industry, he was a patron, a mentor and a sponsor. The history of companies like Flutterwave, Africa’s most valuable fintech, Unified Payments, and SystemSpecs will not be complete without his pivotal role in their growth. 

Taking a big chance on Flutterwave

For Gbenga ‘GB’ Agboola and his co-founder Iyinoluwa Aboyeji, Wigwe was why Flutterwave, Africa’s most valuable fintech company, exists today. 

Aboyeji writes in a post that Wigwe took a big chance on the fintech unicorn even though he never owned a single share of the company.

“He came out with us to San Francisco and pitched the biggest technology companies in the world alongside us. He was the sure reference with Silicon Valley investors and gave us business that helped us grow to become Africa’s most valuable startup,” wrote Aboyeji. 

Agboola, on the other hand, is an alumnus of Access Bank. He worked as head of Digital Factory and Innovation, and head of innovation & product management, digital banking at the bank from 2014 to 2018 before moving to take over the position of CEO at Flutterwave. According to sources, it was while at Access Bank the idea for Flutterwave came and took off. 

“My journey with Herbert began in a remarkable chapter of my life, right after my startup was acquired. I was a young engineer/entrepreneur, barely 30, stepping into a senior role at one of the largest banks in Africa, Access Bank. It was Herbert who believed in my potential to spearhead digital transformation, a task that seemed daunting but was made achievable through his guidance and faith in me,” Agboola wrote via X .

Pushing Remita to mainstream

Remita, the payment platform built by SystemSpecs, may not have the global reach of Flutterwave,it is however the payment solutions company most preferred by the public sector in Nigeria. It is currently used by 22 states of the federation and boasts 3.8 million users nationwide. 

In 2018 SystemSpecs needed a partner to get an approval from the Central Bank of Nigeria (CBN) for one of its solutions, the Remita Data Referencing Services, to support the provision of payday loans for federal government workers and millions of salary earners in the country. For approval to be granted, Remita needed the backing of a commercial bank which was not easy at the time because collaboration between fintech companies and banks was a rarity.

Mujib Ishola, chief technology officer, Remita, said it was Access Bank under Wigwe’s leadership that identified an opportunity for the bank to lend to federal workers and collaborated with SystemSpecs to secure the approval of the CBN. This led to other lenders participating in the payday loan market. 

The Remita Data Referencing Services gave federal workers and salary earners access to loans from Access Bank and other lenders. It has also contributed significantly to the liberalisation of the retail lending space, with more than 50 licenced lenders riding on the rail. 

“Herbert was at the forefront of our partnership, as he was able to create a structure that facilitated the completion of the project just within a few weeks. This initiative brought comfort and assistance to many workers who needed money to do things, just at the time they needed it and were experiencing the ease of seeing this happen for the first time. It was pure leadership. The collaboration has opened a new frontier to retail loan provision and the significant expansion of economic activities at the retail level,” said Ishola. 

The BVN, banking agents, and eTranzact

Herbert Wigwe was one of the prominent members of the Bankers Committee that pushed for the adoption of the Biometric Verification System (BVN) in Nigeria in 2014. Also, as chairman of the Bankers Committee in 2018, he championed the creation of the banking agent network in 2018.

Wigwe is also known to have funded Unified Payments and eTranzact at different times. Niyi Toluwalope, CEO of eTranzact said Wigwe had a “profound impact” on the company by his display of exceptional leadership and strategic insights. 

“As a visionary leader, his exceptional leadership and strategic insights contributed to the growth of our organization. The various insights he shared during our engagements with him were also very valuable,” Toluwalope said.

His investments in Nigerian startups are said to be worth millions of dollars. 

“There were numerous investments in Nigerian startups that anyone will struggle to track down following his demise. As a friend put it to me, investments worth millions of dollars were made following conversations with him alone,” noted Feyi Fawehinmi, an investment accountant and author of Formation: The Making of Nigeria from Jihad to Amalgamation. 

For Toluwalope, Herbert’s biggest legacy in Nigeria’s tech ecosystem is best portrayed through his visionary approach to financial technology, which contributed to the transformation of the industry. 

As Nigeria’s small and medium-sized enterprises (SMEs) continue to grow, contributing about 48% of the GDP, Nigerian entrepreneurs face the pressing challenge of delivering goods to customers on time and well.

The logistics challenges range from concrete problems like the absence of infrastructure to abstract ones like lack of trust, or tardiness on the part of delivery companies. Shipbubble, a logistics and e-commerce aggregation company, is solving this problem.

Co-founded by Jordan Ajibola, the CEO, and Ayodeji Abon, the CTO, Shipbubble is creating a  one-stop API integration that allows e-commerce businesses to harmonise all their logistics needs on one platform, eliminating the need for multiple logistics partners. 

The e-commerce industry is projected to reach $3.64 trillion in revenue by the end of 2023. Only $9.02 billion (0.24%) of that amount is projected to be in the Nigerian e-commerce space. With a pressing logistics problem, Nigeria may fall behind, or fail to boost revenue in the e-commerce sector.

Ajibola and Abon sat with TechCabal at our office in Lagos to demonstrate how Shipbubble works. Ajibola was quick to mention that Shipbubble is helping companies “locate the perfect logistics partners based on cost, proximity, and performance, allowing for logistics partner assignment without the hassle of text messaging”.

A 2021 World Bank report notes that the cost of moving goods (per unit distance) domestically in Nigeria is about 5.3 times higher than in the US. Meanwhile, Shipbubble claims its aggregated platform will allow traders to have options to choose from a wide range of affordable companies that have been vetted for quality service delivery by the company, cutting costs and earning trust in the process.

This is in addition to creating a tracking page for each business, allowing traders and customers to follow the goods from start to finish accurately. 

Abon says an easier way to think of what Shipbubble is doing today is to think of Paystack and other payment aggregators, and how they helped e-commerce businesses to sell faster by supporting online stores with instant accounts where payments are validated within seconds. “Shipbubble is like that, but for logistics,” he says.

Shipbubble’s 10,000 steps to expertise

Ajibola and Abon built the Minimum Viable Product (MVP) in 2021, fully transitioning from an earlier version called GetDelivery to Shipbubble by May 2022. The founders then participated in the Startup Wise Guys accelerator program from October 2022 to March 2023, further honing their expertise. Shipbubble has since secured support from angel investors and venture capitalists, including Microtraction, a venture firm that invests in pre-seed startups. As of October 2023, ₦267 million worth of products have been shipped via Shipbubble.

But they’re still far from their destination. 

One of the fundamental aspects of Shipbubble’s approach, according to Ajibola, is “helping businesses scale internationally and having more options”. To do this, they need to onboard more logistics companies internationally; this will need more time and more money. The founders are confident that their product will attract the right funding to scale and bring in more partners.

Esther Ulueme, 28, a Nigerian entrepreneur spends her nighttime tracking orders and her daytime talking to clients for her skincare and perfumery brand, leaving her little space for adequate rest and to scale. Ulueme is optimistic about Shipbubble’s solution. “Putting logistics companies under an umbrella like Shipbubble’s will keep them in check,” she tells TechCabal over WhatsApp. “You won’t have to worry much because you’re sure the logistics companies under Shipbubble would have gone through checks and won’t tamper with or lose your product.” 

Abon assures business vendors like Ulueme that “[Shipbubble’s] streamlined approach means that entrepreneurs can set up e-commerce ventures with ease with Shipbubble, and Shipbubble will handle everything from inventory management to sales and distribution.” He is confident that this approach will help small businesses scale faster with fewer resources.

Ulueme, who is keen on expanding globally, tells TechCabal that knowing that Shipbubble has logistics companies that can deliver outside Nigeria will help vendors sell internationally without stress.

Sales of cloud services are slowing down in North America the world’s biggest cloud market. Amazon’s cloud computing unit has been particularly affected and is losing market share to Google Cloud and Microsoft Azure among others. Africa is one of the global regions where a significant portion of demand for cloud services is expected to come from. According to digital research consultancy, Xalam Analytics, demand for cloud computing services in Africa is growing at between 25% and 30% annually. This compares favourably with Europe where compound annual growth rates (CAGR) is estimated at 11.27% between 2023 and 2028. In North America, the figure is 10.34%.

Elastic cloud computing is the technology at the heart of cloud computing. Elastic computing refers to virtual server programs that allow users to rent units of storage space, network connectivity, and computing power from clusters of data centres globally. Created by a small Amazon team in Cape Town, South Africa in 2003, the service that has become AWS, Amazon’s largest subsidiary accounted for half of Amazon’s operating profit in 2022 and helped reduce heavy losses incurred by Amazon’s e-commerce business, investments and movie streaming platform last year. AWS has been described as Amazon’s profit engine. But this profit engine is slowing down in the most developed markets and showing signs of promise in smaller markets that are rapidly adopting digital technology.

African banks, insurance companies, airlines and airports are moving their data and IT systems to virtual servers and shuttering costly self-operated data centres. Even telecommunications giants in Africa like MTN Group are not left out. In March, the telco announced it had deployed the core service for its 5G service on Microsoft’s cloud platform Azure. South Africa’s Old Mutual, shut down its physical data centres to move its workloads almost entirely to the cloud. At TechCabal’s Moonshot conference, Osahon Akpata, Ecobank’s Head of Consumer Payments, noted that the pan-African bank was progressively moving assets to cloud platforms. African startups which continue to raise billions in funding from investors are naturally built on cloud platforms.

Potential market built on a handful of big spenders

While Africa represents an opportunity for cloud service providers, the market is still small. The German research service, Statista predicts that revenue from public cloud services in Africa will reach ~$8.3 billion by the end of 2023. By comparison, public cloud revenue in India last year reached $6.2 billion, market intelligence firm International Data Corp reported.

Unlike more mature markets where cloud services like AWS face growing competition, slowing investment into technology startups will not significantly affect the growth of cloud computing services in Africa. “Our priority customers are enterprise businesses with deep pockets and $100 million in annual revenue,” a cloud engineer at AWS told TechCabal. Startups are a distant second in terms of revenue, and video streaming is beginning to make its mark in cloud service demand. Senior AWS staff who spoke with TechCabal say digital content including video streaming from local media outlets, like Arise News, is helping grow demand for cloud services in Nigeria. But the big cloud service providers have not cracked Africa’s public purse yet. 

Governments are hesitant to move data to public cloud platforms. On-premise data systems or contracts with smaller cloud service providers continue to dominate government cloud spending. Moreover, new data localisation rules threaten to constrain the private cloud market, where some of the biggest customers are financial institutions. Concerns about data localisation requirements were partly behind AWS’s decision to open a Local Zone in Lagos earlier this year.

A race to win early market share

In their latest report released during Mobile World Congress in Kigali in October 2023, the GSM Association (GSMA) says smartphones will account for 88% of total mobile connections in Africa (with the exception of North Africa) by 2030. In the same year, they expect 200 million new unique mobile subscribers to join the growing number of Africans who use mobile phones.

The variable but growing use of digital platforms for government services, private businesses, and personal life in Africa is forcing IT companies to find dynamic ways of serving this demand. Cybersecurity concerns and the ability to quickly ramp up services to respond to brief spikes in service demand increase this pressure. 

For example, when a central bank demonetisation program forced Nigerians to use digital money transfer options earlier this year, the money transfer services offered by Nigerian banks were frequently down and failed transactions were a common complaint. Fintechs with cloud capability were better able to handle the spike in digital transactions and grabbed valuable market share as a result. 

As digital financial services providers and other technology startups begin to become an embedded part of African economies, cloud platforms are in a race to grab market share. Almost all of AWS’s staff in Lagos—about 20 in total—are involved in sales and marketing. Flutterwave recently announced a 5-year partnership with Microsoft that will see the $3 billion (at last valuation) fintech process payments for its global merchants on Azure. Oracle, on the other hand, is leveraging its existing relationships with clients who use other Oracle products to cross-sell its cloud service. Last year South African retailer began the process of moving its digital operations to Oracle’s Retail Merchandising Cloud Services. The retailer shed its internal inventory management system for the costly change which was completed in March 2023. 

“We needed to modernise our retail infrastructure and leverage cloud technology to establish a sustainable and stable application foundation for our high volume processes,” Kim Sim, Chief Information Officer, Mr Price said. “Our vision is to be the most valuable retailer in Africa and we know that Oracle’s proven cloud platform can help us meet the needs of our growing community.”

The transition to the cloud did not come without cost – all ERP implementation projects typically do. Earlier in the year, the retailer acknowledged that the switch negatively impacted its revenue for the full year ending April 2023.

SecondSTAX, a Ghanaian fintech that provides access to stock markets for institutional investors, recently signed an agreement with the African Securities Exchange Association (ASEA) to unify Africa’s stock markets. Founded in 2020, SecondSTAX has raised $1.6 million in pre-seed funding from private investors and venture capital firms—including LoftyInc Capital, Orbit54 and STEMeIn—for its technology which provides access to debt and equity securities in Accra and Nairobi’s bond and equities markets. 

A Nigerian and Cote d’Ivoire expansion is in the works, Eugene Tawiah, SecondSTAX’s CEO, told TechCabal over a call.

SecondSTAX’s suite of investment tools includes an order management and execution routing system for brokerage firms and institutional investors. The platform also includes full access to data and company research from all of ASEA’s participating exchanges. In total, ASEA represents 32 exchanges in 37 African countries.

Stock exchange markets are an important source of capital for businesses and governments. Robust stock exchanges are often a sign of a healthy economy and provide private equity investors with an avenue to exit their investments in young companies. But African stock markets are far too small and inefficient to provide much-needed business capital. The continent’s small and illiquid capital markets are part of why tech firms optimise for IPOs in the London Stock Exchange, Nasdaq or the New York Stock Exchange.

Institutional investors, both local and foreign, invest in publicly-listed African companies. But lack of market depth, timely information and access limit their investment options. Investors also have to navigate onerous rules to find and invest in valuable companies across all of the continent’s 30+ stock exchanges. With a combined market capitalisation of around $1.6 trillion, most of the exchanges are often too small for especially foreign institutional investors to concentrate on a single market. 

“Most African exchanges do not have price discovery mechanisms… Until you sort that out, you just end up chasing your tail,” Tshepo Magagane, a South African investment banker, told TechCabal. Rob Stangroom, Harare-based chief executive officer of African Financials, an investor relations and communications company, agrees: “To start fixing things, information must become freely available on multiple levels,” he told African Business earlier this year. 

One exchange to rule them all

Connecting Africa’s markets for easy investor access and discovery is one solution. Since at least 2019, the African Securities Exchange Association (ASEA) has floated the idea of connecting all the continent’s exchanges and market information and making them all accessible to investors from one platform.

The African Exchanges Linkage Project (AELP) hopes to connect African stock exchanges, following a 2009 model in which the Colombian, Chilean, and Peruvian Exchanges created Mercado Integrado Latinoamericano (MILA). MILA is a programme that allows traders in stock exchanges in the region to purchase or sell securities in different countries. It has eventually become Latin America’s largest stock exchange. 

The African version, officially launched in late 2022, is led by the African Securities Exchanges Association (ASEA) and is supported by the African Development Bank (AfDB).  Thapelo Tsheole, president of ASEA, has said that a priority for his group is “to improve the efficiency and liquidity of Africa’s securities exchanges”. The lack of depth in African markets is one reason why tech startups and investors orient their companies to list in stock exchanges in the United States or London.

For its initial phase, AELP’s trading platform, ALP Trading Link, connected seven exchanges, including the Bourse Régionale des Valeurs Mobilières (BRVM), a regional stock exchange of the eight West African countries that make up the West African Economic and Monetary Union (WAEMU). ASEA says the initial connection of seven exchanges represented 2,000 firms with a combined market capitalisation of $1.5 trillion. Two more exchanges have since been connected to ALP Trading Link, bringing the total to nine interconnected exchanges out of 32 exchanges currently operating in Africa. 

According to AFSIC, the combined market capitalization of African stock exchanges is $1.6 trillion, a testament to the small size of public markets on the continent. Of this $1.6 trillion in market capitalisation, South Africa’s Johannesburg Stock Exchange (JSE) accounts for $1.36 trillion, followed by Nigeria’s NGX with a market cap of $66.7 billion in listed companies. Casablanca, Egypt and Nairobi’s bourses come third, fourth and fifth, respectively. 

In their 2019 report, attorneys at Winston & Strawn, a US-based finance-focused law firm, pointed out that stock exchange rules that prohibit investment from non-citizens or non-residents are a bottleneck for foreign investors. SecondSTAX says its platform will smoothen the KYC process for institutional investors across different exchanges, potentially allowing investors to book trades in other countries outside their domiciled region. 

To address foreign exchange concerns, SecondSTAX will add the Pan-African Payment and Settlement System (PAPSS) to its FX marketplace so that investors can book trades in multiple currencies. SecondSTAX already works with Aza Finance, VertoFX and Yellowcard in its FX marketplace.

“We are doing to [the equity investment] space what the likes of Flutterwave have done to payments,” Tawiah told TechCabal. “Tech is what drives financial services and we are happy to be providing the tools for this,” Duke Lartey, SecondSTAX’s COO, added.

Unlike payment fintechs which serve both individuals and businesses, retail traders cannot manage trades on SecondSTAX. Instead, retail investment apps like Bamboo and Chaka can use SecondSTAX to offer retail investors access to public companies across Africa. 

In addition to its selection of US stocks, Nigeria’s Chaka already allows users to trade a selection of stocks and exchange-traded funds (ETFs) that are listed on the Nigerian Stock Exchange. Bamboo founder and CEO, Richmond Bassey, told TechCabal on a call last year that his firm was exploring options to list local equities in Nigeria on their retail investment app.

Institutional investors are not the only ones searching for value in African stock markets; sophisticated retail investors also want in. Said Kasiva Mutsiya, a Kenyan investor who invests in London, Nairobi and the NYSE, “I would like to invest in Zimbabwe and Zambia if I get a dependable platform that gives me exposure.”

In a statement shared with industry players, the central bank says that “in appreciation of the Industry feedback and foster [sic] collaboration and innovation, we are aligned with the “Open” aggregation model. While affirming NIBSS’ neutrality as a shared service provider, the bank explained that NIBSS would only support the central bank to develop an Open Banking Registry to meet industry requirements. But the operations of the registry would be “the sole responsibility of the Regulator.”

Recall that Nigeria’s central bank recently announced rules to guide Open Banking in Nigeria. The recently announced rules to guide Open banking are the first of its kind in Africa and will potentially pave the way for Open Finance. Open Finance is the next rung on the data-sharing ladder, extending access and sharing of consumer data to more financial products and services like loans, consumer credit, investments, and pensions.

Keeping Open Banking, open

Two weeks after the Open Banking guidelines were announced, TechCabal learned of a proposal to centralise access to its Open Banking APIs with the National Inter-Bank Settlement System (NIBSS). This was hotly contested by banking and fintech professionals.  “I want to connect to fintech or bank directly. Why do I have to go through NIBSS? It is the opposite of Open Banking,” an industry expert told TechCabal. “It is like forcing everyone to watch one TV station in order to see broadcasts from other television networks,” the person added.

Industry players TechCabal spoke to said the decision to make Open Banking API consumers and providers talk to each other through NIBSS was at odds with the CBN’s published guidelines. Those sources expressed hope that the central bank would see reasons to walk back its stance. Clearly, the bank has listened.

Had the central bank stood its ground, its decision might have called into question the operation of firms like Mono, OnePipe and Okra. These API firms have already implemented solutions that allow retail bank customers to securely connect their financial accounts to business apps and services. The resulting stalemate might have hindered wider progress in building the foundation for Open Finance, which enables a wider integration of financial data with non-financial industries, such as healthcare, education and government.

As the next steps, the central bank says it is willing to receive further operational and technical feedback from the banking and fintech industry to help make the Open Banking guidelines operational.

Amazon Web Services (AWS), the cloud computing division of the global e-commerce giant, Amazon, has launched a business accelerator for financial technology companies in Africa. The new program is a sign of Amazon’s growing ambitions on the continent and the direction of this ambition.

Hosted by AWS’ Startup Loft Accelerator, the program will focus on fintech and fintech-adjacent startups operating in Africa. African fintech companies receive the most venture capital funding compared to other technology categories. 

In 2022, fintech startups in Africa raised over $2 billion in venture funding out of over $5 billion invested in African startups. AWS is now inviting early-stage fintech companies to apply to join the inaugural edition of the AWS FinTech Africa Accelerator. Applications end on the 27th of April.

2004 marked Amazon’s first entry into Africa. That year, the barely ten-year-old company set up a development centre in Cape Town, South Africa for its cloud-computing unit, AWS. The development centre focused on research to create cutting-edge networking technologies and next-generation customer support software. The investment paid off, and the South African development centre was responsible for Amazon EC2, the virtual server service that allows developers to host and build scalable applications on the cloud, paying only for what they use.

In 2015, AWS opened an office in Johannesburg, and in 2017 the company deepened its South African presence by bringing the Amazon Global Network to Africa through AWS Direct Connect. By May 2018, Amazon had brought Amazon CloudFront to Cape Town and Johannesburg increasing AWS’ 138 points of presence globally to 141. The company also began to offer Amazon Route 53, AWS Shield, and AWS WAF through South Africa. In 2020, Amazon opened its first African data centres in South Africa.

In November last year, AWS announced that it was opening an office in Lagos.

By honing its strategy to focus on providing digital hardware and software infrastructure through data centres and AWS, Amazon is pointing to where it sees value in the African market. And it is still not retail e-commerce. If you look at Amazon’s historical relationship with Africa, it is not difficult to see the (South Africa concentrated) pattern. The US giant has been hesitant to bring its retail business and ruthlessly efficient delivery service to the continent. But Amazon believes in the continued growth of Africa’s digital infrastructure and services market. There is a good reason for that. In 2018, according to research from market research firm, Xalam Analytics, demand for data centre services in Africa rose two to three times faster than supply. 

Africa is currently served by three AWS data centres two of which are in South Africa and the third in Nairobi, Kenya. 

By targeting new technology companies AWS, and by extension, Amazon is signalling that it wants to build early relationships with Africa’s future tech giants — their future target customers. Slowing revenue and net income is forcing the giant retailer to seek new spaces to grow its customer base. “We’re trying to build a set of relationships that outlast all of us,” Amazon CEO, Andy Jassy, said at the 2022 Q4 earnings call with investors and analysts in February. AWS already counts large African corporations and several startups as customers. Including Absa, Old Mutual, DPO, JUMO, Mukuru, and Travelstart, among others.

By contrast, the company’s other efforts on the continent have not been as smooth. A proposed $280 million project for an Africa HQ has been tangled in litigation and resistance by indigenous groups who say the construction will desecrate sacred lands. Amazon runs a logistics hub serving its middle east and north African business from Egypt, in northern Africa. In 2017, Amazon acquired Souq.com, Egypt’s largest e-commerce retailer at the time, for $580 million.

The AWS FinTech Africa Accelerator will train chief executive and chief technology officers in strategy, tech team management, product development, and helping founders prepare for navigating the complexities of fundraising. Amazon will not be taking equity in the companies, nor will it offer venture debt. Startups that are selected will join AWS’ Activate program which will provide founders with up to $25K USD in Activate Credits, and other services.  Founders will also participate in workshops and one-on-one sessions with industry experts to address specific challenges their company faces.

Opera the consumer internet brand and developer of the eponymous web browser has increased its stake in OPay to 9.5% from 6.4%. This follows the conclusion of the 2022 sale of Nanobank for $127 million.

In February this year, Nanobank sold the majority of its business in Asia to OPay in exchange for OPay shares to an unnamed PE firm. Prior to this, Opera, the Oslo-headquartered consumer internet group held 42% of Nanobank, a lending business it had formed by combining Opera’s microlending business with Mobimagic’s point-of-sale business. 

As mentioned earlier, Opera sold off its stake in Nanobank for $127.1 million in cash spread over 8 quarterly instalments in 2022. But earlier this year, Opera and the third-party buyer settled the internet brand’s receivable from the sale of Nanobank for OPay shares instead of quarterly cash payments that would have been paid through Q2 2026.

The result of this all-share transaction was that Opera’s stake in Opay increased to almost 10%. 

By choosing OPay shares instead of cash, Opera settled for $35.9 million less than the book value of its investment in Nanobank, leaving the internet brand with a net fair value of $76.3 million as of year-end 2022. The company said it considered this, “to be reflective of the underlying fair value of its Nanobank receivable as of year-end.”

“The settlement was based on the valuation applied in the transaction as well as an estimate for the value of Nanobank’s remaining business. Opera has stepped into the relevant provisions of the sales agreement, including potential adjustments depending on the business performance. Consequently, Opera will report the value of its increased OPay ownership based on a weighted set of scenarios for the performance of the sold business,” the company statement reads.

Further terms of the equity swap were not disclosed thus it is not possible to determine at what valuation the transaction was priced. However it is an interesting turn to the story when you consider that in June 2021, two months before Opera and Mobimagic created the Cayman Islands-headquartered Nanobank, Opera sold off almost 30% of its former stake in Opay for $31 million.

Opera does not appear to want to hold on to its stake in OPay. It has marked its OPay ownership as ‘held for sale’, noting that “OPay continued its strong growth trajectory through 2022, giving us comfort in the ultimate marketability of our increased ownership stake.”

OPay was founded in 2018 by Opera Norway AS Group, which is owned by Shenzhen-listed Kunlun Tech Co., Ltd. That Opera the company which founded OPay owns so little of OPay may be surprising. A possible explanation is that Opera’s stake in OPay may have been severely diluted in the funding rounds through which the firm raised $570 million (per Crunchbase). The firm was last valued at $2 billion.

More about OPay:

AWS customers can use the Local Zones to deploy applications that require low latency to end-users. Latency refers to the time it takes for data to travel from its source to its destination. The Local Zones will provide single-digit millisecond latency, which is required for live streaming, augmented and virtual reality, and online gaming to be optimal. 

The proximity of AWS Local Zones to the Lagos metropolis will help improve the development and performance of applications that Lagosians and Nigerians—in the broader sense—use to access these services.

Beyond the aforementioned use cases, AWS Local Zones can also help customers operating in regulated sectors like healthcare and financial services. Companies within these sectors may have preferences or requirements to keep data within a geographic boundary.

According to Robin Njiru, AWS’s regional public sector lead for West, East, and Central Africa, the launch will help businesses deploy latency-sensitive workloads and meet local data residency requirements. 

“We’ve designed Local Zones to support a broad range of use cases—from trading applications that need to respond quickly to market fluctuations to interactive live events and gaming experiences. Customers in a variety of industries can now deliver new innovative services and experiences to their end users, all with familiar AWS infrastructure, services, APIs, and tools”, he said in a statement. 

Read also: Can Kenya’s new data centre spur Africa’s digital economy charge?

The Lagos State Government, Stanbic IBTC Holdings PLC, and The Terragon Group are among the customers that have already patronised the new Local Zones. Speaking on how the move will affect the local tech startup scene, Hakeem Popoola Fahm, the Commissioner of Science and Technology for Lagos, said, “The services available with AWS Local Zones will promote and accelerate the introduction of new digital solutions at our technology and engineering location in the heart of Lagos.” 

Endorsing Fahm’s statement, Sochima Ezekwisili, a senior infrastructure engineer at Huawei, told TechCabal on a call that the new AWS Local Zones will help startups that host their applications on AWS create faster and cheaper solutions. “ If I want to host a streaming service on AWS for Nigerians from anywhere in the world, I have to use a content delivery network (CDN) to ensure that Nigerians have low latency and experience it as if it is hosted in Nigeria. With AWS Local Zones in Nigeria, I don’t have to worry about a CDN anymore because it is hosted in Nigeria and cheaper for me”, he said. International streaming companies like Netflix and Spotify use AWS to host their streaming services. 

He also explained that because Amazon charges different fees for different regions, African startups that used AWS had to pay high fees to host their applications. “Previously, if a startup hosts its application on AWS, it was not hosted in Nigeria. But now, with AWS Local Zones in Nigeria, it may become cheaper for local startups to host their apps on AWS”, he said. 

Ezekwisili also shared that Nigerians would also stand to benefit from the new AWS Local Zones as latency for applications hosted on AWS would significantly reduce and would “make the internet faster and easier to access”.

Could Africa’s digital infrastructure be on the rebound?

Last year, this publication called Africa “a digital market still waiting to happen”. The absence of necessary continent-wide digital infrastructure like data centres and fibre optic networks and a finely tuned plan to build it led to this statement. 

Africa is home to only 86 colocation data centres in 15 countries, making it the continent with the lowest number of data centres per internet user in the world. The continent also has a higher percentage of its population—45%—further than 10 kilometres from fibre network infrastructure than any other continent. These figures have led to high latency issues and less than half of Sub-Saharan Africa—22%—being connected to the internet. 

Investments and partnerships from both the public and private sectors will significantly change the leisurely pace Africa is taking to become a digital economy. This year, in response, Africa Data Centres has announced the launch of two new data centres in Kenya and South Africa. In Kenya, the new facility will be completed in mid-2024 and will increase the company’s IT load from 4.5 megawatts to 15 megawatts. The South Africa centre will increase the number of Africa Data Centres in South Africa to four and continue to establish South Africa as the leader of data centres on the continent.

The Africa data centre market size by investment was valued at $2 billion in 2020 and is expected to grow to $5 billion by 2026, growing at a cumulative annual growth rate of 15% during 2021–2026. To achieve this figure, infrastructural developments like AWS’s new Local Zones would help pave the way. 

Read also: A data centre roadmap for Africa