Over the past month, we’ve streamlined TC Daily by removing most images to keep the newsletter concise.
However, if you, like Osaz from Lagos, miss the memes and images, please let me know at timi@bigcabal.com. If you prefer the current format, your feedback is equally welcome. Cheers!
Nigeria’s Central Bank Implements New Rules for Bureau de Change Operators
Bureau de Change (BDC) operators in Nigeria have been at the center of significant regulatory changes as the Central Bank of Nigeria (CBN) strives to stabilize the nation’s currency.
Over the past year, the Economic and Financial Crimes Commission (EFCC) has conducted several crackdowns on forex traders in major cities, reflecting the high stakes and turbulence in the forex market.
Blame and Repercussions
The CBN has partially blamed BDC operators for the country’s erratic exchange rate. In March, just a year after lifting a two-year ban on foreign exchange (FX) sales to BDCs, the CBN resumed dollar sales to eligible operators.
However, this was swiftly followed by the revocation of licenses for over 4,173 operators, indicating a stringent regulatory environment.
New Guidelines for BDC Operators
The CBN has introduced revised guidelines for BDC operators with valid licenses. Tier-1 BDCs must now maintain a minimum capital base of ₦2 billion ($1.4 million), while Tier-2 BDCs need ₦500 million ($349,000).
The application fee for a Tier-1 license is ₦1 million ($699), with a licensing fee of ₦5 million ($3,496). For Tier-2, the application fee is ₦250,000 ($174) and the licensing fee is ₦2 million ($1,398).
Operational Scope and Restrictions
Tier-1 BDCs can operate across all 36 states and the Federal Capital Territory (FCT), and can establish franchises nationwide with CBN approval.
However, new restrictions prohibit BDCs from engaging in futures, options, and derivative trading, outward international transfers, receiving international inward transfers, and dealing in crypto assets.
Forex Transaction Limitations
For forex transactions, BDCs are now limited to Personal Travel Allowance (PTA), Business Travel Allowance (BTA), overseas medical bills or school fees, professional examination fees, and the repurchase of unused naira from non-residents.
Existing BDCs must reapply for a new license under their chosen tier within six months and meet the corresponding capital requirements.
Inside BlackCopper’s Struggles in the Lending Market
Lending to individuals and small businesses in Nigeria represents a $2.7 billion market. Despite its potential, major banks and financial institutions have historically shied away from this sector.
In 2019, only about 6.2% of Nigeria’s adult population received loans from banks, highlighting a significant underserved market.
Digital Lenders and Recovery Challenges
Digital lenders have emerged to fill this gap, offering loans to individuals and SMEs. However, recovering these loans remains a significant challenge. According to a 2022 McKinsey & Company report, approximately 30% of issued loans are not fully recovered.
BlackCopper’s Experience
Techstars-backed startup BlackCopper launched in 2020 to provide collateral-free loans to SMEs.
While it disbursed ₦2.1 billion ($1.45 million) in loans, it has struggled with recovery, managing to reclaim only about ₦200 million ($139,000) of the ₦1.2 billion ($839,000) in unpaid loans.
Moniepoint: Africa’s Fastest-Growing Fintech
The Financial Times has recognized Moniepoint as Africa’s fastest-growing fintech, based on its absolute and compound growth rate. This accolade underscores Moniepoint’s rapid expansion and influence in the African fintech landscape.
Apple’s Controversy Over Conflict Minerals
The Democratic Republic of Congo (DRC) is rich in minerals such as tin, tantalum, tungsten, and gold (3TGs), crucial for electronics. However, these resources have fueled armed conflicts, with rebel groups exploiting mines to fund their activities. The mining process often involves forced and child labor.
Regulatory Measures and Accusations Against Apple
U.S. SEC regulations require companies to disclose the origins of these minerals to prevent financing armed groups.
Despite this, Apple has been accused of sourcing minerals from war-torn regions in the DRC. Lawyers from Amsterdam & Partners LLP allege that Apple’s supply chain may include “blood minerals,” with no response from Apple to their inquiries.
Apple’s Defense and Ongoing Issues
Apple maintains that it has a rigorous vetting process to ensure its supply chain is conflict-free.
However, recent escalations in eastern Congo, notably the capture of key mining towns by rebels, have intensified scrutiny on companies like Apple.
NITDA Restructures Blockchain Implementation Committee
In May 2023, Nigeria announced a national blockchain policy aimed at creating a blockchain-powered economy for secure transactions and data sharing.
The National Blockchain Policy Steering Committee (NBP-SC) was established to implement this strategy.
Recent Developments
Despite initial progress, implementation has been slow. NITDA has now restructured the committee to include new stakeholders, hoping to accelerate policy adoption.
This comes amid heightened government scrutiny of crypto activities, which are excluded from the national blockchain policy.
Microsoft and G42’s Eco-Friendly Data Centre in Kenya
Microsoft and UAE-based AI firm G42 are collaborating to build a “hyperscale” data centre in Kenya, powered by geothermal energy.
This facility will be part of a $1 billion investment to boost Kenya’s digital economy.
Features and Impact
The data centre will offer high-powered cloud services and incorporate eco-friendly technologies.
Additionally, the initiative includes developing AI models for Swahili, launching an innovation lab, and partnering with the Kenyan government for secure cloud services.
Significance
This investment signals strong confidence in Kenya’s digital future, potentially driving significant innovation and growth in East Africa.
Conclusion
Stay informed with TechCabal’s comprehensive coverage of Africa’s tech and business landscape. Sign up for our newsletters and keep an eye on upcoming events like the Moonshot Conference in October 2024.
P.S. If you’re missing TC Daily in your inbox, check your Promotions folder and move any edition from “Promotions” to your “Primary” folder to ensure you never miss an update.
