The second largest mobile network operator in Nigeria said the programme’s primary objective was to reduce share capital which in turn cuts down Airtel’s debt obligations and cost of operations which has grown in recent times. 

Segun Ogunsanya, CEO of Airtel Africa, claims Airtel’s businesses have generated significant cash hence the decision of the board to launch a share buy-back programme. 

“The board believes that repurchasing its shares is an attractive use of its capital in light of the Group’s strong long-term growth outlook,” said Segun Ogunsanya, CEO of Airtel Africa. 

The buy-back programme kicked off on March 1, 2024, and involves the repurchase of $100 million worth of the company’s shares in 12 months. 

The programme is divided into two tranches with the first tranche worth $50 million running for a period of 7 months – from March to August 2024.

The latest transaction between Airtel and Citigroup involves the repurchase of 487,985 ordinary shares at a weighted average price of £103.94 ($131.70) per share. 

Airtel Africa has struggled to stay profitable due to macroeconomic challenges in Nigeria, its largest market on the continent. The company’s financial statement showed revenue dropped by 21.96% to $1.24 billion in December 2023, from $1.59 billion due to the fall of the naira affecting Airtel’s conversion rates. Airtel recently took steps to reduce its high operating costs like outsourcing most of its tower operations to IHS Towers. The buy-back programme also helps the company reduce its debt obligations as it seeks other ways to maintain profitability. 

According to Roam, the partnership also increases the transition to electric motorcycles from traditional motorcycles. Motorcycle riders, popularly known as boda boda riders, are expected to increase their daily earnings by 30%. 

Roam told TechCabal that it is the largest provider of electric motorcycles putting out the largest volumes in Nairobi targeting boda boda riders and B2B providers. For riders participating in the deal, Mogo will offer financing at a rate of KES 25,000 deposit, and a daily repayment of KES 682 for 24 months. The package includes a motorcycle, battery, charger, and two helmets and vests.

“At Roam, our mission is clear, we want to provide the best and most affordable electric motorcycle to the market and Mogo is a great partner in accelerating that mission,” said Mikael Gånge, Co-Founder and Chief Commercial Officer of Roam.

Kenya boasts of about 3 million boda-boda riders according to James Macharia, the minister of transport. The United Nations also estimates that about 5 million Kenyans get their income from riding motorcycles. However, the Kenyan government is keen on converting most of the fuel-based motorcycles to electric.

President William Ruto had on September 1, 2023, launched a national e-mobility programme which has three-wheeled tuk-tuks, or auto rickshaws the focal point of a transition to green transportation. Kenya’s National Transport and Safety Authority (NTSA) plans to convert 2-3 million boda bodas to being electric by 2030.  

Raul Leitis, business development project manager at Mogo said the deal with Roam will go beyond Kenya to the rest of the continent and electric motorcycles will surpass fuel motorcycles in no distant time. 

“We see that the electric motorcycle market is ever expanding and with Roam’s innovative products that enable customers to not only charge at home but also at the Roam Hubs, we believe the electric motorcycle market will eventually become larger than the petrol one,” Leitis said. 

MTN, the largest telecom operator in the country, saw over 2.8 million subscribers drop from its internet business leaving 67.8 million subscribers in January from 70.6 million subscribers in December. The decline was the most MTN Nigeria has seen since May 2023. 

The drop, however, didn’t affect Airtel and Globacom as both telcos gained subscribers in the same month, according to the latest data from the regulator. Airtel gained the most subscribers in January with 890,935 subscribers joining the network and helping to solidify its position as the second-largest internet service provider with 45.9 million subscribers. Globacom also gained 192,313 subscribers in January. 

Subscriber gains from Airtel and Globacom helped to reduce the impact of MTN’s subscriber decline on the industry. Airtel grew its subscriber base from 45.0 million subscribers to 45.9 million subscribers. Globacom also grew its subscriber base from 43.9 million subscribers to 44.1 million subscribers. 

In December 2023, the NCC directed all the telecom operators in the country to deregister all phone lines without a NIN and those with unverified NINs. A spokesperson for MTN Nigeria told TechCabal that the operator started compliance almost immediately after the directive was issued. The company also made several advertorials regarding the directive which led many subscribers to take steps to update or register their NIN.

The deadline was supposed to have expired on March 29, 2024, however, the NCC has now extended the deadline for the disconnection of unlinked lines to July 31, 2024, per TheCable. 

The telecom operator has had a history of fines with the NCC which it is still trying to put behind it. In 2015, the company was fined $5.2 billion for failing to disconnect customers with unregistered SIM cards. 

MTN Nigeria’s subscription decline dented the overall industry internet figures in January. According to the NCC, the total number of subscribers that dropped off across all networks was 1.84 million leaving operators with 161.5 million subscribers from 163.3 million in December 2023. Aside from MTN Nigeria, 9Mobile continued its nearly nine-year decline with 94,824 subscribers leaving the network in January. 9Mobile now has 3.53 million subscribers. 

The revocation took effect on December 6, 2023. 

Cellulant is therefore leaving the consumer-facing mobile money market to focus on providing payment services to businesses. The company told TechCabal via email that it decided to exit the mobile money space and focus on providing solutions “as far back as 2021”. This informed its procurement of a Payment Solution Service Provider (PSSP) licence from the CBN, which has been issued and is now operational. 

“The regulator did not revoke the licence as a result of infractions or any breach. The CBN succeeded in gazetting this request in December 2023, occasioned by the time it took them to conclude the process of revoking the mobile money license as requested by Cellulant,” Cellulant said in the email.

The CBN in the aforementioned letter addressed to Cellulant said it was revoking Cellulant’s mobile money licence, “following [Cellulant’s] decision to discontinue operating the licence”.

The company, which raised $54.5 million in three funding rounds between 2014 and 2018 from investors like The Rise Fund, has hit a rough patch lately. After an out-of-court settlement of a long-drawn leadership tussle with its former co-founder, Bolaji Akinboro, Cellulant has struggled to stabilise its operations and raise new funding.

In 2023, Cellulant saw the need to restructure its business, including reducing the headcount by 20% in August. In December, the company’s CEO Akshay Grover, stepped down citing personal reasons. That exit also led to another round of layoffs in the company and the announcement of an acting CEO. 

Auto finance companies enable consumers to buy cars from dealers and be able to pay over a period of time. 

However, experts say shifts in vehicle pricing due to the FX crisis and market dynamics have significant implications for vehicle financing. 

Three companies that TechCabal spoke to said they are prioritising financing vehicles in areas of preference. This means measuring the demand for a particular vehicle, deciding whether the vehicle serves a commercial purpose, and assessing how affordable it is for consumers. 

“Ultimately, these changes reflect a dynamic adaptation within the vehicle financing sector to accommodate shifting market conditions and consumer preferences,” said Ojurongbe Damilola, head of technical services, Cars45.  

Max, for example, which historically financed motorcycles, bicycles, three-wheelers, and mini-buses (four-wheelers), said it has recently done more three-wheelers and motorcycles in the 11 Nigerian states where it operates. It has financed 33,000 vehicles so far. Max plans to finance 70,000 vehicles in 2024. 

For Carima, a B2B marketplace that allows dealers to make requests from other dealers for cars they don’t have in their lots, financing dealers is the better route to profitability. The company said it has financed dealers’ requests worth N400 million since January this year and has received back 100% of the loans. The platform has 3,000 registered dealers and overall access to 30,000 dealers. 

“We are financing dealers because they see cars as an asset while the normal individual sees cars as a liability. The dealer is buying a car because he wants to resell and make a profit,” Adebayo Tomiwa, CEO of Carima, told TechCabal. With 100% repayment done so far, Carima is now looking to expand the service. 

While prices of cars are on the rise, experts say the factors driving consumers towards vehicle financing include the ability to access a wide range of vehicles that financiers can now provide. Ojurongbe Damilola of Cars45, told TechCabal that this variety now allows individuals to select vehicles that meet both their preferences and financial realities. 

Another factor attracting consumers is expanded financing options due to more financing companies entering the market. This means that customers can now make their choices from a broader range of car loan providers. This also has led to more people embracing the concept of financing vehicles as they are more willing to consider vehicle loans as a viable option for buying cars due to the financial burden it takes off them. 

“This increased competition among financiers has made financing more accessible to a larger segment of the population,” Damilola said. 

However, there are concerns as to how the Central Bank of Nigeria’s Monetary Policy Committee (MPC) will affect loan interest rates, including car loans, if they continue to increase the benchmark interest rate. On March 26, 2024, the MPC hiked the benchmark interest rate by 200 basis points to 24.75%, from 22.75% recorded a month ago. Most of the financing companies often collaborate with financial institutions to access the funds they disburse as loans; an increase in base interest rate can also necessitate an adjustment in the rates offered by these companies. 

Access Holdings recently made its biggest play in East Africa with the acquisition of the entire issued share capital of National Bank of Kenya Limited. 

“This partnership encompasses more than a convergence of capabilities; it signifies the fusion of collective expertise, resources, and an unwavering commitment to drive financial inclusion, empowering millions throughout Africa,” Aig-Imoukhuede said.

Nigeria and Kenya are the first and third largest recipients of diaspora remittances in sub-Saharan Africa, data from the World Bank’s Migration and Development Brief report shows. In 2023, remittances to Nigeria accounted for 38% of the total $58 billion remittance flows to the region, growing by 2%, while Ghana and Kenya, posted estimated gains of 5.6% and 3.8%, respectively. 

As the largest consumer bank in Africa with over 60 million customers in 21 countries, Access Bank will significantly boost its remittance business by tackling the challenges customers face in making remittances within and outside the continent.

The collaboration, which is subject to approval from the Kenyan financial authorities, will see the players connect more than 60 million customers and 5 million businesses across 8 countries and process more than $1 billion a day in transaction value. Access Holdings which has a presence in 14 African countries and is the largest consumer banking institution, is expected to provide technology-infused financial services and Coronation Group will bring its technology expertise to the deal. 

M-Pesa, the mobile money platform of Safaricom, currently dominates the mobile money market in Kenya with a 96.5% share of the market. Another report has shown that 32% of remittances in Kenya are through mobile money operators. But M-Pesa is facing a future separate from Safaricom. In December 2023, Kamau Thugge, governor of the Central Bank of Kenya, said plans to split M-Pesa from Safaricom were ongoing to minimize shocks.

“African countries trade more with nations outside the continent than within themselves. Initiatives such as the African Continental Free Trade Area (AfCFTA) seek to address the lack of intra-continental trade. This partnership with Safaricom, Coronation Group and Access Holdings seeks to explore remittance corridors between East and West Africa, bringing alive the AfCFTA spirit,” said Sitoyo Lopokoyit, managing director, M-Pesa Africa. 

The first phase of the collaboration will concentrate on the biggest markets along the East and West African corridor, including Nigeria, Kenya, Ghana, and Tanzania. 

The plan restricts the drivers to main city centres such as Ikeja Central Area, Surulere, Lekki, Victoria Island, and Ikoyi in Nigeria’s commercial capital, the only place Moove operates under the Uber brand in the country. 

The company was responding to speculations that drivers are leaving the platform in droves due to an expensive daily remittance. Moove is also facing aggressive Lagos state task force officers who either impound the company’s vehicles or deflate their tyres. . 

Moove told TechCabal that it is yet to start discussion with the government on bringing a solution to the constant harassments of its drivers. 

Apart from getting beaten by touts, Moove drivers are also concerned about the conditions and the cost of operating on the platform. According to a driver who recently left the platform, drivers are limited to at most 12 trips within 12 hours for 6 days and are mandated to pay N9,400 per day for 48 months, in addition to the daily 25% commission to Uber. 

Moove’s remittance rates are almost the same as Lagride, another drive-to-own e-hailing platform backed by the Lagos state government and managed by a private company, Ibile Holdings. Drivers on Lagride are expected to remit N9,000 per day to own the vehicle, in addition to a 25% commission (used to be 20% as of January) to the managing company. GAC was supposed to be maintaining the vehicles for the drivers, but a driver told TechCabal that the company has deviated from the plan and drivers are now required to maintain the car themselves with no compensation. 

The agreement between Moove and Uber is such that drivers are allowed to lease the vehicles on a drive-to-own basis and drive under Uber. This means they remit a N9400 daily amount to Moove and also pay a 25% commission to Uber on every ride. 

Taiwo Ajibola, regional managing director, Moove Nigeria, told TechCabal that enforcing the geofencing plan was aligned with the company’s original mission of targeting customers in specific urban areas, mainly commercial and industrial districts. Drivers in the past had been driving the Suzuki S Presso outside the specified geofencing which was responsible for the vehicle being seen in different parts of the state. 

Ajibola said the rate at which drivers exited the platform has fluctuated over the years. He does not believe the cost of daily remittance is what’s driving many of the drivers away. He insists that the company is making efforts to make its services affordable. For example, Ajibola said, while the going rate for a brand new Suzuki S Presso is around N9.9 million, the last unit of the vehicles Moove acquired in 2022 cost far less because the company bought it in large volume. He declined to say the actual cost of the vehicle. 

“We’ve had some churns as a result of maybe the driver had a change in the job that he had or some other reasons. But the rates have remained the same. The numbers keep fluctuating but really what we are seeing is negligible statistically speaking it is less than what would be any significant impact on the business,” Ajibola said. 

Suzuki S Presso is supplied in Nigeria by CFAO under a drive-to-own arrangement by Moove Africa. Before the S-Presso units were launched into the Nigerian market, Moove drivers were using Suzuki Alto which has a lower purchase price than the S Presso. 

Mike Ojeh, a former Uber driver, told TechCabal that he doesn’t have a problem with the N9400 repayment to Moove. In 2022, he leased a Suzuki Alto, which is cheaper than an S Presso, and was paying N7000 daily to Moove as repayment for the vehicle, as well as Uber’s commission and a maintenance fee. The conditions for 12 rides in 10 hours per day were a major highlight for him, as he always met his target and was able to make more rides to take money home.

Over 218 drivers have graduated from the Moove drive-to-own initiative, according to Ajibola.  

Car dealers who spoke to TechCabal said her best bet, given her budget, was a Nigerian used Toyota Corolla. A combination of foreign exchange volatility, customs duty, and shipping costs are putting the prices of cars beyond the reach of many Nigerians.

“I bought a car worth $600 and got it shipped for $1600. When it got to Nigeria, I had to pay about N3 million ($1,886) to clear the vehicle. This has never happened in the history of our business,” Kolawole, a car dealer, said. 

It now costs at least ₦5 million to buy a foreign-used sedan and ₦3 million for a Nigerian-used one. That is more than double the cost from 2023, according to data supplied by Pankaj Bohhra, co-founder of Fixit45. 

The rise in prices coincides with a decline in imports. The number of cars imported through the Tin-Can Island port, the entry point of choice for many Nigerian imports, dropped from 32,000 units in 2018 to 4008 in 2023, according to Dera Nnadi, the Customs Controller of the Command. 

Local assembly and production have also failed to grow. At a summit in 2020, Yemi Osinbajo, former Vice President, noted that available assembly plants delivered fewer than 14,000 cars.

Prices are forcing many to compromise 

Those prices are forcing adjustments as some companies switch to Nigerian-used official cars or relatively new or unknown brands as cheaper alternatives to Japanese cars, which have always been the preferred option. 

Other companies lease cars or use flexible auto financing for purchases. 

For individual customers, auto loans are still largely unpopular. While many financial institutions offer auto loans, consumers are unaware of them or don’t understand how they work. Ngozi, for instance, believes vehicle financing options have high-interest rates.

Ojurongbe Damilola, head of technical services at Cars45, believes customers are slowly warming up to car loans, citing an increase in financing requests compared to the past year. 

Ultimately, Nigeria’s car market is at a crossroads, and navigating the new normal will cause short-term pains. Local production is unlikely to increase, and as long as macroeconomic conditions remain the same, financing may still not be compelling enough for consumers. 

Ayotunde Coker, CEO of Open Data Access Centre (OADC), told TechCabal that the increasing number of submarine cables means that a lot of big data will be captured and require massive storage capacity. This is responsible for the renewed deployment of capital into hyperscale mega data centres in the country. The companies currently building hyperscale data centres in Nigeria include Kasi, Rack Centre, and OADC. 

Kasi Cloud Limited began construction of its hyperscale or Tier IV data centre, modelled after the Silicon Valley technology parks, in 2022. The facility, worth $250 million, will be located in Lekki, Lagos, and is expected to go live in 2024. 

Rack Centre, a Tier III data centre company, started building a 12-megawatt IT data centre at Ikeja, Lagos in 2023. The data centre is situated on a 20,000 square metre green field site and sits at over 30 metres above sea level. 

Construction of OADC’s hyperscale data centre began in 2022. The company is building a data centre with a capacity of 24 megawatts of power. 

“You will see that from the end of this year, the facilities with hyperscale spec will become available, almost like every quarter into the year after. It is like the tipping point is happening,” Coker said.

Before now, most investors have built Tier III data centres, the second-highest certification in the Uptime Institute’s system of classifying data centre performance into four tiers. Tier III data centres such as MainOne Data Centre and Rack Centre offer additional reliability over Tier II in the form of N+1 redundancy and multiple power and cooling distribution paths. 

Hyperscale data centres have much larger capacities and infrastructure. These facilities are massive business-critical facilities designed to efficiently support robust, scalable applications and are often associated with big data-producing companies such as Google, Amazon, Facebook, IBM, and Microsoft. Hyperscale data centres usually exceed 5,000 servers and 10,000 square metre.

South Africa built the first hyperscale data centre in sub-Saharan Africa seven years ago. In Nigeria, companies like Google, Microsoft, and Facebook stored some of their data with data centres like MainOne, but the majority of their data storage needs have come from outside the country. A MainOne spokesperson told TechCabal that it had been providing storage for companies like Google and Microsoft. 

There is also an increase in the construction of other tiers of data centres. In March, Airtel broke ground on Nxtra, a data centre with a total capacity of 180 megawatts distributed across 13 major data centres and over 48 Edge data centres. Medallion also recently expanded its data centre facility to add a three-floor building with 1 megawatt of IT capacity and 232 racks. 

So far, the eight subsea cables that have landed in Nigeria include MainOne cable with a capacity of 10tbits; ntel’s SAT-3 with 800gbits; Globacom’s GLO-2 12Tbits); Africa Coast to Europe Cable System with a capacity of 5.5tbps; WACS (14.5tbits);, Equiano (144tbits); the Nigeria Cameroon Submarine Cable System (NCSCS) with capacity of 12.8tbps; and 2Africa (180tbits).

The new licences will put Kuda in direct competition with startups like LemFi and Nala, which style themselves as global neobanks for Africans in the diaspora. 

This is not Kuda’s first crack at the remittance market. In 2022, it secured a payment licence in the United Kingdom and rolled out a subscription remittance offering with a flat fee of £3 and a transfer limit of £10,000. One person with knowledge of the company’s business told TechCabal that the product has now been discontinued, theorising that the market was not ready for a subscription-based remittance offering.

It makes it likely that when the neobank rolls out its offerings in Canada and Tanzania, it will not go the way of subscriptions. 

The remittance market has become more attractive to investors as more Nigerians and Africans seek greener pastures abroad. In 2022, Nigeria was Canada’s fourth largest immigration source country, welcoming 22,085 Nigerian immigrants, making 5.06% of Canada’s total number of permanent residents. At the same time, over 100,000 Canadians of Nigerian descent call Canada home. In 2022, remittance inflows into Africa totaled an estimated $100.1 billion, accounting for 3.4% of Africa’s GDP. 

By focusing on markets like Canada and the UK where the number of Nigerian migrants continues to grow, Kuda has an opportunity to grow its foreign exchange revenue at a time when the FX rates are decimating the profits of startups.