Afridigest: Curated Content #1
A selection of recommended content for Africa-focused founders, executives, and investors.
Afridigest is your intelligent guide to Africa’s tech ecosystem. This new Curated Content feature is our roundup of recent content worth consuming for Africa-focused founders, executives, investors, and others.
Welcome to the first Curated Content feature, friends! Every week, we go through a large chunk of content and select the best of the best for your benefit. Historically, we’ve shared this in the Monday Week in Review newsletter, but we’re experimenting with a dedicated bi-weekly(?) format that we think will help you get smarter about tech & business in Africa. Your thoughts are appreciated! 🙏🏽
Today’s edition includes perspectives on:
• Why zero cognitive load products matter
• How Safaricom exploits the poor with M-Pesa
• How regulations cripple African crypto companies
• The problems with Kenyan startups
• The opportunity in building proprietary Africa-focused data analytics
• Digital ads across Africa
• Nigeria’s eNaira adoption
• Ethiopia's foreign currency peg
• Zambia’s payments ecosystem
• What’s ahead for B2B e-commerce in Africa
• How living in Nigeria makes life for tech workers more difficult
• Egypt’s payments revolution
• Lessons learned investing in African startups
• Franchise models in today’s digital era
• Why market matters most to VCs
• & more
Some questions for you: Should we revert back to the previous format with curated content embedded in the Week in Review? Or should we make this an email you can opt out of separately?
Your feedback is very much welcome by email or via these forms: 😡 Hate it • 😑 Meh • 😃 Love it
With that said, let’s get into it.
Eghosa Omoigui, Founder and Managing General Partner of EchoVC Partners (Video - Nothing Ventured)
On underserved markets, iceberg markets, zero cognitive load products, and more.
“There's a construct we’ve built internally for investing in underserved markets — things we push founders to think through — and this one, we call it the ‘ZCL’ for zero cognitive load. It's critical to build products and services that are zero cognitive load and an example of zero quality load products is certainly WhatsApp but the prior example was M-Pesa.
What’s the most interesting feature of M-Pesa? … You don't need to know how to read or write English. It doesn't make any assumptions. Even the trader on the side of the road knows how to count from zero to nine... When you're using you just numerals to transmit and receive money, that’s a zero cognitive load product. It's not fancy but it gets the job done.”
Fintech and microfinance are preying on the global poor (Article - Jacobin)
Economist Milford Bateman puts forth his argument that microfinance and fintech have failed to help the poor in this interview.
“Many innovations, including financial innovations, start out as beneficial to the poor. But the problems start, in general, when such financial innovations are then commercialized and privatized. Once private fintech corporations conquer a critical customer base and become oligopolists, or even monopolists, which is the goal of those scalable data-driven business models, the situation radically changes. The poor are no longer the beneficiaries of a particular financial innovation, but increasingly its hapless victims.
We first saw this in the case of M-Pesa in Kenya, the iconic money transfer platform that effectively gave rise to the global fintech movement in the early 2010s. M-Pesa was started with … good intentions [to] be ‘'a great way of helping Kenya’s poor.’ But then the parent company Safaricom within which M-Pesa operated inevitably came under investor pressure, and it quickly morphed into one of the most exploitative corporate titans in Africa, if not the world. Its profits exceeded that of many Western corporations. Even worse, other fintechs are emulating that model now.”
Inside the Lazerpay shutdown: A conversation with Njoku Emmanuel (Video - Crypto@scale)
On Lazerpay’s stablecoin vision, lessons learned from its shutdown, and the future of crypto in Africa.
“The major problem around [Lazerpay] not working and us not being able to scale was…regulations… We spoke to the biggest payment gateways in Africa and in Nigeria and we sold to them, but the problem was that compliance always shut it down — because the regulatory framework around crypto in Nigeria, which was our core market, was not clear at all.
Enterprise businesses don't want to [be] at the mercy of the Central Bank [as a result of] adding crypto to their offerings. So that was the problem and we realized that late. Otherwise, maybe we wouldn’t have started from the African market. Maybe would have started from the Middle Eastern market. But regulations were the biggest problem we faced.”
The dark side of Kenyan startups (Article)
A controversial article that caused quite a stir in Kenyan tech circles.
“The Kenyan startup scene, known for its dynamism and innovation, is plagued by a range of unethical practices that deeply impact the well-being and professional growth of workers. From toxic work environments and unfair treatment to delayed payments and misappropriation of funds, the challenges faced by employees within these startups are concerning.”
Reimagining economic growth in Africa: Turning diversity into opportunity (Report - McKinsey)
A granular analysis from McKinsey of Africa’s countries, cities, and companies from 2000 to 2019 with recommendations for the continent’s future growth.
“Across all sectors, but particularly in services, countries and companies can close the competitiveness gap with their emerging-market peers by rapidly deploying digital innovations at scale. Digital products and services can enhance customer experience, drive innovations, and improve productivity in ways that solve real problems in African societies. More and better data and data analytics can help companies identify growth opportunities and tailor offerings across a diverse continent where clients and consumers in different countries have differing needs. Additionally, building and owning proprietary data analytics is a large opportunity in Africa’s data-scarce environment. For governments, leveraging digital can stimulate productivity, accelerate economic growth, improve citizen experience, increase revenues, and reduce costs and leakages in the system.”
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