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Pipit Global Enters 12 New African Markets with Cellulant

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International cash payments platform Pipit Global and pan-African payments company Cellulant have extended their partnership agreement to now include eighteen countries in Sub-Saharan Africa.

The partnership will see the companies providing both B2B and B2C payments services to existing and emergent financial institutions, eCommerce merchants, billers and billing platforms, mobile money providers and eWallets, digital financial service providers, and their customers.

Despite the Covid 19 pandemic, remittances into sub-Saharan Africa and intraregional SSA remittances have remained resilient. 

According to figures from the World Bank there was a modest decline of 1.4% in flows into SSA in 2020 – this figure excludes the exceptional case of Nigeria where economic factors beyond the pandemic affected remittances significantly. And in 2021 remittances have bounced back to near pre-pandemic levels with a year-on-year increase of 6.2% for the region.

This resilience demonstrates the fundamental importance of diaspora remittances to sub-Saharan African countries, which exceed Foreign Direct Investment and portfolio flows, and are approaching the levels of Official Development Aid.

However, the cost of remittances into Africa and intra-African remittances remains a significant challenge, a burden on senders and receivers, and a barrier to development.

Sub-Saharan Africa continues to have the highest average international remittance costs at 8.2%.  Intraregional remittance costs are higher still, with, as an example, the cost of a remittance of $200 dollars between Tanzania and Uganda costing an exorbitant 23%.

Pipit’s and Cellulant’s partnership will see the development of ‘for-purpose’ remittances. Rather than the traditional model of peer-to-peer cash remittances, migrants will be able to make bill payments and e-commerce transactions directly to suppliers.  This model ensures that bills are paid, and removes the potential for ‘leakage’ – where remitted money may not be used for its intended purpose.  It also reduces the receiver risk associated with cash collection.  And, in line with the goal to reduce remittance costs, the direct-to-biller model applies fees significantly lower than traditional remittance prices resulting in meaningful savings for remittance senders and receivers.

Commenting on the partnership, Pipit Global CEO Ollie Walsh said: “Pipit Global was founded on the basis of promoting collaboration in the world of payments. Making cash a core element of the digital economy, whilst maintaining that cash economy and giving the ability to transition between the two, gives real parity and freedom, and ultimately creates the social impact that drives global development and equality.

“Our partnership with Cellulant will turn these development and equality goals and aspirations into tangible realities.”

The expansion into the new markets comes just 5 months after the two companies announced a partnership to enable remittances into Nigeria, Kenya, Uganda, Tanzania, Mali, Senegal, and Ghana at lower rates.

“At Cellulant, we see digital payments as a significant opportunity to create transformational change for businesses, households and economies at large, ” said David Waithaka, Cellulant’s Chief Business Officer for Enterprise.

Speaking to the partnership, he added “International and intraregional remittances are an engine for growth for many economies in Africa providing resilience to financial shocks and improving livelihoods. Enabling lower rates and powering for-purpose remittances for us is about the direct impact on people’s lives.”

Technology and digital payments have been identified as a driver in reducing transaction costs of remittances to less than 3% by 2030 as outlined in SDG 10 enabling reduced inequalities within and among countries.

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Technology

WATRA Advocates E-Governance and Technology to Boost Jobs for Youths In Nigeria, W/Africa

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WEST Africa Telecommunications Regulators Assembly (WATRA) has advocated greater adoption of e-Governance and concerted effort to expand the digital economy in Nigeria and other countries of West Africa. 

The executive secretary of WATRA, Aliyu Yusuf Aboki stated that this will boost investment and create quality jobs for young people in Nigeria and West Africa. He stated that despite the comparatively low rate of literacy in West Africa, there is a very wide scope for digitizing government services. 

He said he sees the enormous opportunity for e-governance as he travels across the 15 ECOWAS states. He explained that governments at all levels could increase their taxes dramatically by digitizing the identities of taxpayers and tax collection processes. He also emphasized that there is a great opportunity to expand access to education and healthcare through digital tools. 

 WATRA is a regional organisation that has the mandate to promote the adoption and harmonization of regulations that stimulate investment in telecommunications and increase affordable access for citizens.

 The WATRA boss cited the example of India where over 1 billion citizens, including the poorest citizens, could easily receive or make payments using their telephones through a government-supported platform, the Unified Payments Interface (UPI).

 Other government-backed digital schemes in the country enable municipal governments to manage healthcare online and citizens to store and readily access government documents such as tax returns on their phones. 

Aliyu pointed out that the digitalization of government services has transformed the lives of the 273 million Indians who are classified as living in poverty. While noting progress in the adoption of ICT to deliver and manage government services in West Africa, the WATRA boss emphasized the need to scale up existing schemes in the sub-region. 

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Africa Region

Africa’s Smartphone Market Declines 3.4% In Q1

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Africa’s smartphone market declined 3.4 per cent quarter on quarter (QoQ) in Q1 2023 to total 17 million units, the lowest level of shipments since the start of the COVID-19 pandemic in Q1 2020.  That’s according to the latest figures announced by International Data Corporation (IDC), with the firm’s newly released Worldwide Quarterly Mobile Phone Tracker showing that rising inflation and local currency depreciations against the U.S. dollar have negatively impacted demand for smartphones across the continent.

Shipments of feature phones across Africa also declined in Q1 2023, although not to the same extent as smartphones. Feature phones remain relatively affordable and are still the preferred secondary device option for many consumers.

“Africa’s smartphone declined throughout 2022 amid weak consumer demand, and this has been exacerbated by rising inflation and higher device prices,” says George Mbuthia, a senior research analyst at IDC. “The average selling price (ASP) for smartphones grew QoQ due to high import costs and the fact that many vendors’ flagship devices are now equipped with 5G and have therefore moved up in price to the premium segment.”

Africa’s top 3 smartphone markets recorded a mixed performance in Q1 2023. South Africa and Nigeria both saw shipments decline QoQ, while the Egyptian market registered growth. South Africa was impacted by seasonality issues and weak demand, meaning vendors were unable to bring in new units while they continued to clear the channel. Egypt remains below its potential, but local assembly is picking up in the country and the government has now dropped its “letters of credit” requirement for vendors, both of which have helped the market to recover from its low base.

Transsion (Tecno, Itel, and Infinix) accounted for the largest share for smartphone shipments across Africa in Q1 2023, despite experiencing a decline in units. Samsung placed second, while Xiaomi came in third.

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Africa Region

M-KOPA raises $250m to scale high-impact consumer fintech across Africa

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M-KOPA, a leading fintech platform, today announced it successfully closed over $250m in new debt and equity funding to expand its financial services offering to underbanked consumers across Sub-Saharan Africa. This marks one of the largest combined debt and equity raises in the African tech sector, enabling M-KOPA to continue its rapid growth.

Over $200m in sustainability-linked debt financing was led and arranged by Standard Bank Group, Africa’s largest bank and long-term strategic partner to M-KOPA. Other participating lenders include The International Finance Corporation (IFC), funds managed by Lion’s Head Global Partners, FMO: Dutch Entrepreneurial Development Bank, British International Investment, Mirova SunFunder and Nithio. A further $55m in equity investment was backed by existing strategic investor Sumitomo Corporation, which is contributing $36.5m to the total raise and will engage closely with M-KOPA on new growth markets and products. Blue Haven Initiative, Lightrock, Broadscale Group and Latitude, the sister fund to Local Globe, also participated in the transaction.

M-KOPA’s fintech platform combines the power of digital micropayments with the Internet-of-Things (IoT) to provide customers with access to productive assets. In markets where individuals have limited pre-existing financial identities and conventional collateral, M-KOPA’s flexible credit model allows individuals to pay a small deposit and get instant access to everyday essentials, including smartphones, electric motorcycles and solar power systems, and then graduate to digital financial services such as loans and health insurance. M-KOPA’s solution embeds credit into the product through a smart digital connection, giving customers ownership instantly, which they can pay off through micro-instalments over time. The company has sold over 3 million of these products through a unique direct sales model that includes more than 10,000 agents. M-KOPA’s operations started in East Africa and successfully expanded to Nigeria in 2021 and, more recently, Ghana. From 2020 to 2022, M-KOPA recorded a compound annual growth rate of 85% in new customer acquisition, and was recently recognised as one of Africa’s Fastest-Growing Top 100 companies by the Financial Times for two consecutive years, in 2022 and 2023.

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