Nigeria is on the brink of increasing its national minimum wage. Yesterday, the country's legislature approved a bill raising the minimum wage from ₦30,000 to ₦70,000. While this adjustment marks a positive step forward for Nigerian workers, the nation still lags behind countries like Seychelles, Morocco, and Libya in terms of minimum wage standards in Africa.

In today's midweek update, we look at:

• African startups hit hard as Mercury cuts ties with 13 African countries
• Why Nigeria fined Meta $220 million for data breach
• Starlink eyes Liberian launch after Presidential meeting

African startups hit hard as Mercury cuts ties with 13 African countries

It’s a tough break for African startups. Mercury, the US fintech that became a lifeline for many after Silicon Valley Bank's collapse, has announced it's shutting down accounts for businesses in 13 African countries. These startups were counting on Mercury to manage their foreign investments and handle cross-border payments.

The decision, which will be effective August 22, 2024, stems from recent changes in the company’s account eligibility criteria. Countries affected include Burundi, Cameroon, Central African Rep, DR Congo, Congo, Liberia, Mali, Mozambique, Nigeria, Somalia, South Sudan, Sudan, and Zimbabwe.

What's behind this sudden move: A couple of factors contributed to this shutdown; Increased regulatory scrutiny of fintechs, especially those dealing with high-risk regions, is one big reason. The collapse of Silicon Valley Bank and the subsequent crackdown on US banks hasn't helped either. Also, the fact that several African countries are on the Financial Action Task Force Greylist. Countries on the list are subject to additional scrutiny because of deficiencies in money laundering and terrorism financing regulations, making them even more attractive targets for compliance officers.

Context: This is not the first time Mercury would be restricting African accounts. In 2022, Mercury restricted several accounts linked to African startups without giving reasons.

The problem runs deeper than Mercury's decision. It highlights the broader fragility of African startups within the global financial system. However, this unfortunate situation presents an opportunity for homegrown fintechs like Raenest, Verto, and Leatherback to step in and provide essential banking services to affected businesses.

Dig Deeper: Read First SVB, now Mercury. US banks leave African startups in dire straits.

Partner

Why Nigeria fined Meta $220 million for data breach​
​

With over 51 million WhatsApp users in Nigeria, an alleged privacy breach involving the data of these users is at the forefront of the Federal Competition and Consumer Protection Commission's (FCCPC) decision to impose a $220 million fine on Meta, WhatsApp's parent company.​

The commission released a 116-page document on Monday, which claimed that Meta violated Nigerian data protection laws by forcing users to accept a new privacy policy in 2021, sharing user data without explicit consent, and discriminating against Nigerian users compared to their European counterparts.

According to the FCCPC, the decision was reached after a 38-month joint investigation with the Nigeria Data Protection Commission, which started in May 2021.​

Nigerians, according to the FCCPC, weren't given a real choice when it came to the new policy. They were allegedly forced to accept the update, which allowed WhatsApp to share user data with third parties.​

The investigation also suggests Meta might be playing favorites with its privacy policies. The FCCPC alleges Nigerians received a different policy compared to their European counterparts. European users reportedly had more control over their data and received clearer explanations about how it was being used.​

But the issue goes beyond the policy itself. The FCCPC also raises concerns about the sheer amount of data WhatsApp collects. Compared to competitors like Signal and Telegram, which collect a mere 4 data points, WhatsApp allegedly collects a staggering 44. Furthermore, the FCCPC alleges Meta failed to adequately inform users about how this data is used and stored

Context: This is not the first time Meta has been accused of sharing users’ data. Just two months ago, a court document revealed Meta gave Netflix access to Facebook users’ direct messages to improve its ads targeting. In October 2023, South Africa’s Competition Commission announced it would investigate Meta after claims that the company was competing with news publishers by using their content to generate ad revenue.

Meta isn't the only company under investigation by Nigerian authorities for alleged data breaches. OPay and DHL have also faced probes recently.

​Looking Ahead: Meta has disputed the FCCPC’s claim and plans to appeal the judgment. This fine comes after a Nigerian court recently struck out a ₦30 billion ‘illegal advertisement’ suit by the Advertising Regulatory Council of Nigeria against Meta.

Starlink eyes Liberian launch after Presidential meeting

On Monday, we wrote about how Starlink is gaining ground in Africa, and it’s obvious that the satellite network isn’t slowing down soon.

It’s next stop? Liberia, based on a recent meeting between Elon Musk and Liberian President Joseph Nyuma Boakai. This meeting comes at a crucial time for Liberia, which is in dire need of a fast and affordable internet service provider, especially in rural areas where local telecoms have struggled to deliver.

Context: At the start of 2024, Liberia had an internet penetration rate of just 30%. The country's average internet speed is 7.14 Mbps, falling below the global benchmark. Additionally, the high cost of data is a significant concern for Liberians, with monthly fees for basic broadband averaging $2.63.

During the virtual meeting, Musk emphasised the importance of Starlink and its potential to support initiatives in education and healthcare. Notably, similar meetings have preceded the launch of Starlink in other African countries. Musk previously met with Botswana's President Mokgweetsi Masisi and Kenya’s President William Ruto

​​Zoom Out: The satellite service is already operational in 10 African countries and plans to continue strengthening its presence in Africa despite facing several licensing and regulatory challenges.

By the Numbers

$465.4

The amount in dollars Seychelles pays her citizens as minimum wage. They are followed by Libya with $321.83 and Morocco with $314.7