👨🏿‍🚀TechCabal Daily – MTN Nigeria to pay $72.6 million in back-taxes

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At Moonshot 2023, TechCabal unveiled the Future of Commerce Trends Report which captures the most interesting growth trends in African e-commerce, payments, and logistics and speaks to the implications or outlook for the future.

Want to know why 67% of MSMEs in Nigeria, Kenya and South Africa are using social media for their businesses? Or why the social commerce trade in Africa and the Middle East will reach $41.9 billion by 2021? Then download the Future of Commerce Trends Report.

World Bank grants $1 billion loan for South Africa’s energy reforms


World Bank

Image source: Google

The World Bank has approved a $1 billion development policy loan to support electricity market reforms and decarbonisation in South Africa.

The loan will be used to restructure the power structure, unbundle Eskom, and redirect resources toward investments in transmission and plant maintenance. The loan will also support private investment in renewable energy and strengthen carbon pricing instruments.

Global support: This is the third policy loan that South Africa has received since it signed a Just Energy Transition Partnership with several developed countries. 

In November 2022, the French and German development banks, ADF and KfW, each extended €300 million ($318 million) in loans to South Africa. Collaboratively funded by the World Bank, the African Development Bank, KfW, and the government of Canada, the loan aligns with South Africa’s development priorities, including the Energy Action Plan to combat loadshedding and the Just Energy Transition.

The Wrold Bank’s loanaligns with the South African government’s confirmation of nearly $3.5 billion in additional pledges for the Just Energy Transition Investment Plan (JET IP). It also anticipates the approval of the JET IP implementation plan which will be presented before Cabinet ahead of the upcoming COP28 climate talks in Dubai from November 30 to December 12.

Zoom out: The World Bank announcement comes as South Africa experiences its worst year of power outages. In July, Bloomberg reported that regular outages since January have lasted as long as 12 hours a day, but eased up in May after South Africa managed to boost its generating capacity. Per Eskom, the situation is expected to worsen in 2024.

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Tribunal orders MTN Nigeria to pay $72.6 million fine


Thank you so much meme

GIF source: Tenor

MTN is finding fines everywhere it goes.

The telecom’s Nigerian subsidiary has received a demand from a Lagos-based Tax Appeal Tribunal to pay $72.6 million for unpaid taxes and penalties.

Backstory: In October 2018, the Office of the Attorney General of the Federation (OAGF), after investigating MTN’s tax payment history from 2007–2017, found the telecom to have an outstanding balance of ₦242 billion in value-added taxes (VAT). 

By 2021, the Federal Inland Revenue Services (FIRS)—Nigeria’s federal tax collection agency—issued a VAT assessment of $72.6 million to MTN, and another $21 million for penalties and interests accrued. MTN rejected the assessment, and in April 2022, the FIRS issued a new assessment consisting of $47 million in VAT, and $87.9 million in fines and penalties.

MTN, again, rejected the assessment, and approached the Tax Appeal Tribunal for a review. Now, the Tribunal, after more than a year of reviews, has ruled in favour of the FIRS and ordered MTN to pay the initial VAT assessment of $72.6 million. It, however, cancelled the $21 million penalty the telecom was charged.

What now? MTN Nigeria says it is reviewing the decision and will give a response on Friday, October 27, the same day it releases its trading statement. This new charge comes three years after the telecom, in 2020, won a 16-month-long battle against the Nigerian government which levied a $2 billion claim for back taxes against it.

Meanwhile, MTN’s Ghanaian arm has also been hit with fines for back taxes recently. In January, the Ghana Revenue Authority (GRA) lobbed a $773 million fine at MTN Ghana for outstanding tax obligations from 2014—2018. While the claim by the GRA has been withdrawn, it does beg the question: why does it take so long for federal tax agencies to identify these tax gaps, and what are the true costs to the economy?

Fidelity blocks transfers to OPay, Moniepoint, and Palmpay


Image source: Zikoko Memes

Fidelity bank, a Nigerian commercial bank, has blocked transfers to Nigerian neobanks, Opay, Moniepoint and Palmpay over rising fraud and customer verification concerns.

Zoom in: One week ago, a small number of customers noticed that several neobanks were no longer listed on the list of approved financial institutions in the Fidelity Bank app. While the bank claimed that the restrictions were related to an app upgrade, sources with direct knowledge of the matter gave different responses: the banks were removed for KYC violations. 

Five sources told TechCabal that the transfer restrictions began at least two weeks ago due to rising concerns about fraud and customer verification. Fidelity Bank, on its own, did not share the specific KYC concerns it had to these neobanks. 

Nigerian banks and fintechs have lost billions of naira to cyberattacks and fraud since the start of the year, according to three banking industry experts. Fraudsters often move stolen funds through neobanks and traditional banks. In March, Flutterwave reportedly lost ₦2.9 billion in a hack, which the company denied. The company, however, placed restraining orders on 107 bank accounts in 27 banks that allegedly received money from the illegal transfers.

Lights out: Fidelity’s move raises the question of whether other traditional banks are considering following suit. While traditional banks may be concerned about the adequacy of neobanks’ KYC verification, there are also concerns about traditional banks’ own anti-fraud measures. A 2022 KPMG Nigeria report found that only 30% of Nigerian banks have fully implemented KYC and anti-fraud measures.

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South African Airways set to relaunch with new routes to Brazil


A South African Airways plane

South African Airways (SAA) is making a comeback.

The airline, which is the national carrier of South Africa, will be officially relaunched this week at an event held in Cape Town. At the same event, SAA will also introduce a new route connecting Cape Town and Johannesburg to São Paulo, the largest city in Brazil. 

Resumption of São Paulo flights: The reintroduction of direct flights to São Paulo by SAA will become the airline’s first intercontinental flight since its revival. The flights to São Paulo will operate four times a week, with two flights departing from Cape Town and two from Johannesburg. The first flight from Cape Town to São Paulo is scheduled for October 31, 2023, while Johannesburg will follow suit on November 6, 2023.

The relaunch signifies the airline’s return to operation two years after it faced liquidation.

SAA’s road to recovery: In 2017, SSA was accused of corruption and mismanagement, leading to its declaration of bankruptcy in December 2019. The financial challenges worsened with the pandemic, causing the South African government to halt financial aid to the company. 

Consequently, SAA halted its services in December 2020 and underwent a business rescue

process. However, In June 2021, the government approved the sale of a 51% stake to a group of investors known as the Takatso Consortium, leading the airline to emerge from bankruptcy in September 2021. As part of the business rescue operation, SAA faced a 16-month grounding period. During this time, the airline made difficult decisions to streamline its operations, including route cutbacks, and reducing its workforce by approximately 1,000 employees to reduce operational costs.

Now that regulatory approval has been granted, the acquisition by Takasto is expected to be finalised soon.

Kofa partners with TAILG to supply electric bikes in Kenya


Image source: Kofa

Kofa, a Ghanaian cleantech startup, has partnered with TAILG Group, a Chinese Electric vehicle company, to launch electric motorcycles in the country. 

The first orders of the battery swap electric motorcycle called “Jidi” are expected to arrive in Ghana at the end of 2023. The partnership with TAILG aims to deploy 200,000 electric vehicles and over 5,000 battery swap stations across Africa by 2030. Jidi’s dual batteries can provide a range of up to 100 km on a full battery change. 

Kofa’s partnership TAILG aims to reduce rider costs by up to 30 per cent in the country. Kofa will also operate an innovative battery swap technology—Kofa Swap & Go system—a distributed network of batteries and swap stations that provides immediate access to a fully-charged battery in seconds. 

Launched in 2023, Kofa joins other players like Hyundai Kona EV, Ora Black Cat and Kantanka Amoanimah EV in the nascent electric vehicle market in Ghana. The Country also supports the EV industry through its tax exemptions and import duty waivers.

The big picture: Kofa joins a list of other electric mobility startups on the continent justling for a top spot in Africa’s nascent EV sector, which is estimated to reach $21.4 billion in value by 2027. Spiro, an e-mobility company, signed a $63 million debt financing to fund two electric motorcycle assembly and battery manufacturing plants in Benin and Togo in 2024. Roam, an electric mobility company, recently introduced Kenya’s first locally manufactured electric bus and Qore, a Sterling Bank-backed company in Nigeria, is converting regular vehicles—motorcycles, tricycles and mini buses—to electric vehicles and will deploy 100 electric tricycles in the next month.

TAILG plans to integrate Kofa batteries into its new and existing models, supporting the spread of electric vehicles in Africa.

The World Wide Web3

Source:

Coin Market Cap logo

Coin Name

Current Value

Day

Month

Bitcoin $34,639

+ 1.60%

+ 31.84%

Ether $1,794

+ 0.32%

+ 13.13%

CyberConnect

$6.06

+ 28.05%

+ 20.51%

Biconomy $0.22

+ 0.30%

+ 9.25%

* Data as of 23:45 PM WAT, October 25, 2023.


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Starting today, FTX founder Sam Bankman-Fried will testify at his trial. CoinDesk reports that the founder of the now-defunct crypto company whose downfall sent the crypto market into a spiral will make a direct appeal to jurors in his bid to prove he did not commit fraud or conspire to commit fraud at his once-giant cryptocurrency exchange. 

Meanwhile, a web3 gaming company Neon Machine has raised $20 million to develop a blockchain-based Call of Duty lookalike called Shrapnel. CoinTelegraph reports that the game will allow players to insert blockchain assets—which other players can interact with—into the game. The team also raised $10.5 million in June 2022 for the project. If you want to find out what the game looks like, here’s a gameplay video

  • The Digital Nigeria International Conference 2023 is set to hold from October 24–26, 2023 at the Abuja International Conference Centre. The 3-day programme will see technology enthusiasts within the Nigerian startup ecosystem dive deeper into areas and aspects where startup founders seek support, education, or real-world problems, challenges facing their businesses and roles of government, especially NITDA, in supporting Nigerian startups. This year’s Digital Nigeria International Conference will attract over 10,000+ in-person and 5,000+ virtual attendees. Find out more about the speakers here.
  • DICE is holding the next edition of its quarterly gathering. This edition is themed “Solve for Africa: Co-Creating a Tech-Enabled Future” and will feature startup founders, investors, venture capitalists and tech leaders answering questions on how tech can be harnessed as a catalyst for change in Africa. Join Jim Ovia, chairman of Zenith Bank, Bosun Tijani, Nigerian minister of comms, and Funke Opeke, founder of Mainstreet Technologies amongst others by 6 PM on November 8, 2023, as they co-create a shared future. Register to attend here
  • Interested in discovering how tech is driving Africa’s economic boom? Then the 2023 Africa Tech Festival is for you. With over 200+ speakers including South Africa’s minister of mineral resources Gwede Mantashe, the event is set for November 13–16, at the Cape Town International Convention Centre in South Africa. Tickets are available here, and you can get 15% off paid passes with the code “TECHCABAL15”.

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