BD Insider 211: Kenya to lead the dollar-dominance cut in Africa

The Investors' Corner is back!

We wrapped up the inaugural season in May with an engaging discussion featuring Emmanuel Adegboye, Head of Madica. Adegboye delved into the obstacles encountered by underrepresented founders in Africa and strategies for fortifying the tech ecosystem.

Kicking off our second season is Basil Moftah, the General Partner at Nclude. Moftah offers valuable perspectives on securing VC funding during economic downturns, the landscape of financial inclusion in Egypt, and the unfolding trends in the African tech ecosystem.

Watch out for the next episodes.

In this letter, we bring you news about:

• Kenya's assignment to host the PAPSS
• the demise of Bolt Food in South Africa and Nigeria
• Fitbit's withdrawal from South Africa

We also curated other noteworthy information, including job opportunities.

The big three

#1. Kenya to host the Pan-African Payment and Settlement System

The news: Kenya has secured the bid to host the Pan-African Payment and Settlement System (PAPSS) house aimed at facilitating intra-African trade deals, to diminish dependence on the US dollar.

In October, the Central Bank of Kenya became the tenth African central bank to join PAPSS. Nigeria, Ghana, Liberia, Sierra Leone, Gambia, Zimbabwe, Djibouti, Zambia, and Guinea are already integrated into the platform.

Zoom in: PAPSS, developed by the African Export-Import Bank, is a digital platform crafted to facilitate immediate payments across African borders in local currencies, thereby minimising associated transaction costs.

With more than 42 different currencies in Africa, intra-African transactions have historically required the traditional method of converting local currencies into major currencies, predominantly the dollar. This process often involves high fees and extended transaction times. PAPSS is anticipated to save businesses across the continent a significant annual sum of $5 billion in transaction costs.

"By making cross-border payments affordable and easier, PAPSS gives small and medium-sized enterprises, entrepreneurs, and traders easier access to the formal payment services that will help them grow their businesses," according to Dare Okoudjou, founder and CEO of Onafriq (formerly MFS Africa).

Zoom out: It is expected that by the end of 2025, every commercial bank in Africa will have established a formal connection with PAPSS. Currently, only 28 commercial banks have pledged their commitment to this initiative. Notably, fintech firms like Interswitch and Onafriq are acknowledged as strategic partners within the PAPSS network.

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#2. Bolt Food to shut down in South Africa and Nigeria

The news: Bolt is exiting the food delivery markets in South Africa and Nigeria next month, citing business reasons. “The decision to exit [these markets] is necessary to streamline our resources and maximise our overall efficiency as a company,” a Bolt spokesperson said.

Know more: Bolt revealed its ambitions to enter the food delivery sector in 2019, targeting South Africa as one of its inaugural markets, alongside Estonia and Finland. By 2020, the company had commenced food delivery operations in Cape Town, and in October 2021, it expanded its services to Johannesburg and Nigeria.

A key element of Bolt Food's strategy was to outpace competitors by providing more competitive pricing. For instance, in South Africa, it imposed a flat 15% commission fee on all restaurant partners, in contrast to Uber Eats and Mr D Food, which charged a commission of 30%.

Despite this, the company remains in fierce competition with other established players. Additionally, in Nigeria, the fuel subsidy removal is adversely affecting businesses, particularly those providing logistics-related services, coupled with the challenge of rising food costs.

Zoom out: While Bolt Food is stepping back from the food delivery market, other Bolt verticals, including the ride-hailing platform, will remain in operation.

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#3. Google withdraws Fitbit from South Africa

Another shuttered venture in the South African market. Google-owned fitness device manufacturer, Fitbit will stop selling the hardware in the country “to align our hardware portfolio to map closer to Pixel’s regional availability”.

Google has never made Pixel phones available in South Africa. With the withdrawal of Fitbit, the company is actively opting not to officially offer any Google hardware in the market.

“Existing Nest and Fitbit customers will continue to have access to the same customer support, warranties will still be honoured, and products will continue to receive software and security updates,” according to Google.

💰 State of Funding in Africa

Visa has selected 23 African startups for the inaugural cohort of the Visa Africa Fintech Accelerator.

The selected startups will benefit from 1:1 mentoring from experts and founders in the ecosystem from Africa, Visa-specific training, partnership opportunities and undisclosed funding. Additionally, they will enjoy an array of product perks and discounts from more than 100 vendors worth $200,000. This includes credits from Google Cloud and HubSpot.

Among the nine African countries chosen for the accelerator, Nigerian startups comprised the largest portion of the cohort, followed by those from Ghana, Kenya, Morocco, South Africa, Egypt, Uganda, Zambia, and Tunisia.

A notable pattern in the cohort is the majority of startups that have previously undergone acceleration in global programs such as Y Combinator and Techstars.

Meanwhile, here's how African startups raised last week:

M&A

• Francophone Africa super app, Gozem has acquired Moneex, a Beninese fintech startup in an undisclosed deal. This strategic move is poised to enable Gozem to introduce a mobile money service in Togo and Benin.

📰 Noteworthy

Here are other important stories in the media:

• Flutterwave overcomes legal hurdles in Kenya: Kenya's Asset Recovery Agency has formally dropped its last case against Flutterwave, asserting that the frozen funds were not acquired through illicit activities.
• Direct debit in Nigeria: Nigerian fintech company, Paystack is launching a Direct Debit product in partnership with the Nigeria Inter-Bank Settlement System. The product will allow businesses to securely debit customers' bank accounts in Nigeria.
• Resignations at Flutterwave: Oneal Bhambani has stepped down from his position as chief financial officer at Flutterwave, just over a year after joining the company. Two other finance executives have also resigned.
• Electric Bikes for deliveries within Nigeria: Fez Delivery has launched electric bikes to provide a cleaner, more economical, and efficient solution for goods transportation in Nigeria.
• From Canva designs to UX strategy: Nigerian UX strategist and designer, Stephanie Orkuma shares how a tweet inspired her to start her design career journey and tips on personal branding.

💼 Opportunities

Jobs

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

Product & Design

• Busha — Technical Product Manager, Nigeria & Kenya [Remote]
• Moniepoint — Technical Product Manager, Lagos
• Kuda — Graphic Designer, Lagos

Data & Engineering

• Duplo — Backend Engineer, Nigeria [Remote]
• Moniepoint — Data Scientist, Lagos
• LemFi — Senior Android Engineer, Lagos [Remote]

Admin & Growth

• Flat6Labs — Investment Associate, Egypt
• ARM Labs Lagos Techstars — Technical Entrepreneur, Lagos
• Media Dev Investment Fund — Program Officer, Lagos

Other opportunities & events

• For Rwanda nationals: Andela has opened applications for its Technical Leadership Program in Rwanda, a nine-month career accelerator program, in partnership with the Ministry of ICT & Innovation. 
• The Art of Technology Lagos 5.0: Tech experts, enthusiasts and policymakers will gather from December 8-9 for The Art of Technology Lagos 5.0 which will focus on "Creative Economy" and "Digital Lagos". Learn more.

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Thank you for trusting us to bring you news about the African tech ecosystem.

Have a great week ahead!