BD Insider 189: Nigeria joins forces with India to fuel digital economy growth

Flutterwave is in the news again this morning. The payment startup has launched Swap to digitise FX processes for Nigerians. The new product which is backed by the Central Bank of Nigeria (CBN) “will help moderate the rates for the [bureau de change] BDCs and at the same time differentiate BDCs from black market transactions,” according to Folashodun Shonubi, the acting governor of the CBN.

“No new licenses were issued,” he added. Flutterwave will use its existing International Money Transfer Operator licence to provide foreign currencies. The fintech has partnered with Kadavra and Wema Bank, both entities will leverage their licenses to enable the new product.  

“We understand the FX access challenges individuals and businesses face. Swap is our answer to those pain points, providing a seamless and efficient platform for currency exchange,” says Olugbenga Agboola, the CEO of Flutterwave.

Currently, users residing in Nigeria can access Dollars, Euros, and British Pounds, via Flutterwave’s web app. Starting in October, Flutterwave will issue cards to Swap users who need to access Personal Travel Allowance and Business Travel Allowance from Nigeria.

Earlier this month, the CBN said it would clear the backlog of foreign exchange demands within two weeks. Although previous efforts have failed, Shonubi is optimistic that the bank will achieve its goal this time.

We will bring you more coverage of this story later in the day.

In this letter, we also explore:

• Ethiopia’s plan to adopt digital IDs
• MoUs between Nigeria and India to drive the digital economy
• how LipaLater is raising $1.2 million

We also have updates on the state of funding in Africa, other noteworthy information, and several opportunities.

The big three

#1. Digital IDs will soon be mandatory for banking in Ethiopia

The news: By the end of the 2023/2024 financial year, the National Bank of Ethiopia (NBE) plans to get all bank customers registered on Fayda, the country’s digital ID database. This is a joint initiative between NBE and the National ID Program.

Why it matters: This will allow Ethiopians to use Fayda as their bank ID to carry out KYC checks and complete remote onboarding. According to NBE, the adoption of Fayda as a primary ID for financial transactions will improve transparency, stability, and security in the country’s financial sector.

Last month, Madras Security Printers Private Limited was contracted by the Ethiopian government to produce one million cards for the country’s digital ID project with a $300,000 bid. For context, Ethiopia has an estimated population of 120.3 million, and only about 3.4 million Ethiopians have registered for the national digital ID, so far.

Yodahe Zemichael, the executive director of Ethiopia’s national ID program, disclosed last year that the country is on course to reach 70 million Ethiopians with digital ID by the year 2025.

The enrollment process for Fayda was launched a year ago.  

Know more: Earlier this year, Ethiopia passed the Digital Identity Proclamation Bill into law to establish a “comprehensive, consistent and reliable system for the registration of the citizens” in the country and to have a legal basis for the use of the digital ID system by keeping the information of the registrants.

Ethiopia joins Nigeria, Ghana, Uganda, and other African countries that are transitioning to digital identification systems.

#2. Nigeria signs MoUs with India to enable its digital economy

The news: The Nigerian government has signed a memorandum of understanding (MoU) with India’s ministry of electronics and information technology to “share best-in-class digital solutions for the benefit of the citizens of both countries,” according to 'Bosun Tijani, Nigeria’s minister for communication, innovation and digital economy.

Bosun, who co-founded CcHub, said that he also signed another MoU with Central Square Foundation, a non-profit organization working to ensure quality school education in India. “We will partner towards building a stronger edtech ecosystem,” he said.

These MoUs were signed on the sidelines of the just concluded G20 summit in India.

Why it matters: “Great to see Nigeria engaging with India.  So much that can be learned, borrowed, and adapted from India's experience driving digital adoption over the last 10 years.  It can (and will) happen in Nigeria too!”, according to Mark Straub, co-founder and CEO of Smile ID.

“We are very intentional about building stronger partnerships across both countries to deliver increased investment and learning for our startup ecosystem,” 'Bosun added.

#3. LipaLater turns to crowdfunding to raise $1.2 million

The news: Kenyan digital lender, LipaLater raising $1.2 million from retail investors at a $30,000,000 valuation. According to details on Republic, the crowdfunding platform where the company is raising, LipaLater is receiving investments between $100 to $124,000.

Know more: The crowdfunding will close on October 29, 2023. “LipaLater must achieve its minimum goal of $50,000 before the deadline...If they don’t, all investments will be refunded,” reads a note on Republic. As of September 9, LipaLater raised $27,228 from 29 investors—which is 54% of its minimum goal.

Last December, LipaLater acquired Sky.Garden, a Kenyan e-commerce startup which was forced to close shop due to its inability to raise additional funding. Although the value of the transaction remains undisclosed, Lipa Later CEO Erick Muli disclosed at the time that they needed about $6 million to operate the venture.

Why it matters: As investors continue to maintain a tight-fisted approach to investing, more startups on the continent are exploring funding alternatives like crowdfunding. Just recently, MarketForce announced that it is raising $1 million via WeFunder, an online crowdfunding service.

💰 State of Funding in Africa

While the likes of LipaLater and MarketForce are crowdfunding, some startups on the continent are still raising from institutional investors.

After a drought, it seems crypto and Web3 startups are back again; at least two of them raised venture capital and one acquisition was recorded. The cleantech sector also recorded two major startup deals and the first close of a VC fund.

Find below a summary of the funding activity from last week:

M&A

• Jack Dorsey and Jay Z-funded ₿trust has acquired Qala, an African Bitcoin developer trainer in an undisclosed deal.

VC fund launch

• Catalyst Fund has closed the first round of its $40 million venture capital fund and accelerator. The fund will be invested in African cleantech startups.

📚 Noteworthy

Here are other important stories in the media:

• Flutterwave expands to India: Leading African payments startup, Flutterwave has partnered with IndusInd, the 6th largest bank in India by assets, to expand its remittance product, Send App to the South Asian country.
• InstaDeep picks Rwanda as AI research hub in Africa: Tunisian-born AI startup, InstaDeep has picked Rwanda as its AI research hub in Africa. “InstaDeep has always offered exceptional opportunities for Africans passionate about AI,” InstaDeep CEO Karim Beguir said.
• 60 female-led tech startups in Nigeria: Female-led startups make up 12.4% of Nigeria's startup ecosystem, showcasing the remarkable determination of these women to drive innovation within a fiercely competitive industry.
• The most potent West African passports in 2023: Dara curated this list based on the Henley Global Mobility Report. “Powerful passports are far more than mere travel documents that define our ease of cross-border movement,” he writes.
• More controversies at Ghanaian fintech, Float: In the last weekend brief, we reported that Float lost ₦5 billion to Nigeria's FX crises and fraud. A new report by WeeTracker says a client at the fintech has accused its CEO of “acting in bad faith and perpetrating fraud”.

💼 Opportunities

Jobs

We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.

Product & Design

• Amazon — Principal Product Manager, Capetown
• Nokia — Technical Project Manager, Lagos
• Credpal — Product Manager, Lagos (Hybrid)

Data & Engineering

• Moniepoint — Cloud Infrastructure Engineer, Remote
• GT Bank — Enterprise and Solutions Architect, Lagos  

Admin & Growth

• Brass — Head of Sales, Lagos (Hybrid)
• Bolt — Business Sales Specialist, Lagos
• Binance — Senior Marketing Manager, Capetown

Other opportunities

• Innovating for the African Bitcoin ecosystem: Btrust Builders has launched the Build for Africa, a hackathon that allows African Bitcoin enthusiasts to build solutions that solve African challenges and increase Bitcoin adoption in Africa. The winning idea will win about $5000.
• Research & Data Fellowship: OCCRP is seeking applications for its new 8-week hybrid Research & Data Fellowship. They're looking for 6-8 fellows who are excited to learn about OSINT, research, & data. Applications will be reviewed on a rolling basis till Sept. 29.
• For African tech startups: Applications are open for the 2023 MEST Africa Challenge. Only early-stage startups in Ghana, Nigeria, Senegal, Kenya, and South Africa, are eligible to apply for the $50,000 in equity prize.
• For pre-MVP founders: AWS Startups Builds Accelerator is receiving applications for its 10-week virtual program where pre-MVP founders get the training and support needed to launch their startups to market.

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