How Nigerian startups are navigating the naira nightmare
Plus the reasons 15 startups across Africa gave for shutting down last year, top stories of 2023, and a word about M&A in African tech
Afridigest is your intelligent guide to tech in Africa. We provide ideas, analysis, and insights for startup founders, operators, and investors across Africa and beyond.
Hope your 2024 is off to a great start, dear reader. 🦾 New format alert: This post contains three article snippets and a bonus video clip on M&A in African tech.
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1) How Nigerian startups are coping with the currency crisis
2023 was a disastrous year for African currencies.
Three of the world’s five worst-performing currencies were from the continent: Nigeria’s naira, Angola’s kwanza, and Malawi’s kwacha.
The Nigerian naira — the third worst-performing currency in the world, behind only the Lebanese pound and the Argentine peso — claimed the dubious honor of being the worst-performing African currency of 2023.
Nigerian banknotes fell 55% in value versus the US dollar over the course of the year, so companies operating in Nigeria would have needed to grow their naira revenue by ~2.2x in 2023 just to hold constant in dollar terms.
“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.”" — Lewis Carroll, Alice in Wonderland
Given that the majority of Nigerian (and African) startups raise dollar-denominated capital, it’s no surprise that they (and their counterparts in other hard-hit countries) are increasingly deploying these tactics: