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Kenyan B2B Agritech Logistics Company Twiga Foods Announces Another Round of Layoff, 59 Employees Affected

By
Ojukwu Emmanuel
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0

Twiga Foods, a Kenyan B2B Agritech logistics company, has announced another round of layoffs affecting 59 employees. This development is part of a broader strategy under the new CEO, Charles Ballard who took the helm in May 2024.

The company stated that the layoffs are aimed at improving operational efficiencies as it focuses on its path to profitability. The recent reduction of workforce at Twiga is coming only after a year, when the company laid off 283 employees, representing a third or 33% of its 850 workforce as it pushed for a “lean, agile and cost-effective organization.”

Twiga foods cited the decrease in the purchasing power of its users as justification for the most recent round of layoffs and modification in operations. Despite having raised significant capital over the past decade, the company has faced challenges, including financial struggles that led to issues with paying salaries and suppliers, as well as legal battles over unpaid dues.

The company found itself in financial distress, facing a liquidation notice from Incentro Africa Limited over unpaid debts amounting to USD 261,878.75. The recent layoff at Twiga Foods has sparked widespread reactions from Kenyan Netizens as some pointed out that the problem with the company is leadership.

On X, @JengaHustle wrote,

“The issue with Twiga feeds is leadership-based. The company has had significant operational difficulties under previous management, which led to inefficiencies and financial strains. Even after appointing a new CEO and securing additional funding, Twiga Foods continues to face serious challenges, as evidenced by recent layoffs. These redundancies suggest that the company is still struggling to achieve sustainable growth and may be dealing with deeper structural problems”.

Twiga Foods’ failure in Kenya is attributed to several challenges which include overexpansion, financial mismanagement, operational inefficiencies, adverse market conditions, strategic missteps, and legal disputes. While the company’s innovative model showed promise, these critical issues have hindered its ability to sustain growth and profitability.

The former CEO Peter Njonjo had previously noted that the cost of capital for venture-backed startups had risen significantly over the past two years, which has put pressure on companies like Twiga Foods to reassess their business models to remain competitive. 

In March 2024, amidst these growing challenges, Njonjo left his position following a successful $35 million fundraising round through convertible bonds. This development sparked rumors and speculation about the circumstances surrounding his departure, with some insiders suggesting that the former CEO may have been pushed out due to the company’s ongoing difficulties.

Njonjo was replaced by Charles Ballard, an ex-Jumia executive who took over as CEO in May 2024. Ballard in a bid to put the company on a path to profitability stated that the recent layoffs are essential for Twiga to refine its service offerings and build a stronger foundation for long-term growth.

With Ballard joining Twiga Foods, the company aims for continued growth and innovation in the food distribution industry. His diverse background and apt vision make him a highly valuable addition to the company’s leadership team. Ballard’s appointment comes at a time when Twiga Foods targets bolstering Kenya’s agricultural sector.

Notably, despite the recent layoffs, Twiga is also creating 25 new positions within its growth and innovation departments. This move suggests a strategic shift towards areas that the company believes will drive future growth, including stronger partnerships with fast-moving consumer goods (FMCG) manufacturers, logistic efficiencies, and the development of enhanced tech solutions.

State Street Partners with Taurus for its Tokenization Plans, as TON Rises in Value

By
Paul Ugbede Godwin
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State Street, a titan in the realm of institutional finance, has recently announced a strategic partnership with Taurus, a leader in digital asset infrastructure, to embark on a new venture into the world of tokenization. This collaboration is poised to revolutionize the traditional financial industry by integrating the cutting-edge capabilities of blockchain technology.

Tokenization, the process of converting rights to an asset into a digital token on a blockchain, offers a myriad of benefits, including increased liquidity, faster settlement times, and enhanced security. State Street’s initiative to incorporate tokenization services is a testament to the firm’s forward-thinking approach and its commitment to innovation in the digital asset space.

The partnership with Taurus will enable State Street to leverage Taurus’ expertise in creating and managing tokenized assets, thereby streamlining the issuance and servicing of digital securities and fund management vehicles. This move is particularly significant as it reflects State Street’s ambition to enhance its digital asset solutions and provide an integrated business and operating model that supports the entire digital investment lifecycle.

The landscape of tokenization is rapidly expanding, with a variety of companies entering the space to offer innovative solutions. Tokenization platforms are becoming increasingly popular as they provide a secure and efficient way to digitize assets on the blockchain. Companies like Akemona, NYALA, and Spydra are making strides in capital markets, offering services that cover the full lifecycle of digital assets.

InvestaX is another notable player, providing tokenization as a service with a focus on the Asian market. Enigma Vault and Cadmos Tokenization Platform are also contributing to the ecosystem by simplifying data security and enhancing asset liquidity through tokenization.

Visa has entered the tokenization sector as well, aiming to boost authorization and create new digital commerce experiences. SettleMint, Republic Crypto, and Tokeny are further examples of companies that are facilitating the issuance, allocation, and management of security tokens.

The tokenization movement is not limited to startups and fintech firms; established financial institutions are also participating. For instance, companies like Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks are key ecosystem participants supporting the tokenization of real-world assets (RWAs).

State Street’s foray into tokenization is not just a leap into the future of finance but also a strategic response to the evolving regulatory landscape. The firm has been vocal about the need for regulatory clarity and has been actively engaging with regulators to shape a conducive environment for digital assets. The partnership with Taurus is a clear signal of State Street’s readiness to offer digital asset custody once the U.S. regulatory framework becomes more favorable.

The collaboration comes at a time when institutional interest in digital assets is at an all-time high. By adding tokenization and digital custody services to its repertoire, State Street is positioning itself as a leader in this growing asset class. The firm’s decision to partner with Taurus underscores its ongoing commitment to delivering innovative solutions that meet the demands of its clients in the digital era.

As the financial industry continues to evolve, partnerships like the one between State Street and Taurus will likely become more prevalent, paving the way for a more interconnected and technologically advanced financial ecosystem. The implications of such collaborations are far-reaching, promising to redefine the boundaries of what is possible in the realm of finance and investment.

TON outperformed the broader Crypto Market, rising nearly 3% to $6.75

Meanwhile, in the dynamic world of digital assets, strategic partnerships can serve as significant catalysts for growth and innovation. The recent announcement of HashKey’s partnership with TON, the digital asset associated with the popular messaging app Telegram, is a testament to this phenomenon. This collaboration marks a pivotal moment for TON, as it not only resulted in an immediate price surge of nearly 3% to $6.75, but also signifies a broader commitment to expanding the TON ecosystem.

The TON blockchain, originally conceived by Telegram, has undergone a remarkable transformation since its inception. After facing regulatory challenges, the project was adopted by the community and has since flourished under the stewardship of the TON Foundation. The partnership with HashKey Group, a prominent digital asset financial services provider in Asia, is poised to further enhance TON’s offerings, particularly in the realms of Web3 and GameFi development.

The Open Network (TON), as it is now known, has evolved into an independent entity, with its own set of developers and contributors who have taken the original vision of Telegram and propelled it into a new era. The endorsement from Telegram’s CEO, Pavel Durov, has further bolstered the credibility of TON, leading to a notable increase in the value of its native token, Toncoin.

Moreover, the formation of TON Ventures, a venture capital fund dedicated to investing in consumer applications built on the TON blockchain, signifies the ecosystem’s maturity and readiness for mainstream adoption. With an initial capital of $40 million, TON Ventures aims to catalyze the development of applications with mass appeal, further expanding the reach and utility of the TON blockchain.

The comparison of TON with other blockchains highlights its focus on user-friendliness and mass adoption. Its design caters to the needs of Telegram’s vast user base, aiming to onboard billions into the blockchain space with its user-centric approach.

The focus of the partnership, initially centered on Hong Kong, aims to facilitate easier access to cryptocurrency transactions for Telegram users, especially in the Asia-Pacific region. This strategic move is expected to drive crypto on-ramping, thereby bolstering the TON ecosystem’s utility and reach. The collaboration also underscores the growing interest in GameFi, a sector that combines gaming with decentralized finance, offering a new paradigm for digital entertainment infrastructure.

Here are some of the key features that set TON apart:

TON’s unique multi-blockchain architecture allows for exceptional scalability, enabling the network to handle a growing number of transactions and applications efficiently. With its advanced infrastructure, TON can process high volumes of transactions, which is crucial for widespread adoption and functionality.

Utilizing a PoS consensus mechanism, TON enhances the network’s efficiency and security, making it more environmentally friendly compared to traditional proof-of-work systems. TON leverages sharding technology, which allows blockchains to split and merge based on the load, further improving the network’s scalability. The network includes distributed file storage technology and a network proxy/anonymizer layer, providing users with additional security and privacy options.

HashKey’s decision to partner with TON is rooted in the blockchain’s rapid growth and the increasing number of developers contributing to its ecosystem. The partnership is a clear indication of the confidence in TON’s potential to foster a thriving environment for both developers and users alike. With the support of HashKey, TON is set to embark on a journey of accelerated growth and innovation, further solidifying its position in the competitive landscape of digital assets.

As the TON blockchain continues to evolve, the partnership with HashKey Group represents a significant milestone in its journey. It is a collaboration that promises to unlock new possibilities and drive the adoption of digital assets within the Telegram community and beyond. The rise in TON’s value following the partnership announcement is just the beginning of what could be a transformative period for the TON ecosystem and its stakeholders.

Flutterwave Introduces American Express Payment Option for Nigerian Merchants

By
Ojukwu Emmanuel
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0

Flutterwave, one of Africa’s leading Fintech companies, has announced a significant development that will broaden payment options for its online merchants in Nigeria.

The company has integrated American Express into its payment platform, allowing Nigerian merchants to accept payments from American Express cardholders.

This development is poised to have a substantial impact by facilitating smoother transactions with international customers and enhancing the global reach of Nigerian businesses. Also, Flutterwave has announced that this feature will be available to merchants in several other African countries which include Tanzania, Rwanda, Ghana, and Uganda, in the near future.

Speaking on this collaboration, Flutterwave CEO and Founder, Olugbenga Agboola said,

“At Flutterwave, we’re always looking for ways to connect the world to Africa through payments. This is one of our initiatives to ensure that more people across the world can pay using Flutterwave in Africa. We understand the value of providing shoppers with payment methods that work for them, as well as helping businesses to expand their customer bases.

“This collaboration also provides more options of where to shop and what to buy to American Express cardholders across the globe. By offering American Express as a method of payment, Flutterwave will make the payment process faster and simpler for American Express card holders, and improve the experience for e-commerce businesses using Flutterwave, helping them to start locally and sell globally.”

Also speaking, the Vice President and General Manager of Global Network Services EMEA at American Express, Briana Wilsey said,

“American Express continues to expand in Africa to enable greater payment choices for businesses and consumers. Through the agreement with Flutterwave, a trusted payment provider, we are giving e-commerce merchants in Nigeria the opportunity to reach American Express Card Members around the world. The collaboration is a win-win because it also increases the number of places where our Card Members can use their Cards in Nigeria.”

Flutterwave collaboration with American Express will facilitate online transactions and offer a range of benefits for both merchants and online shoppers. These includes;

• Flutterwave merchants can attract business from a new customer base of American Express Card Members in Africa and around the world. This includes consumers with personal cards and spenders with business or corporate products. Terms and conditions apply.

• For shoppers, there is more choice when it comes to being able to select their preferred method of payment when transacting with Flutterwave merchants. This collaboration strengthens the American Express global network and increases the number of locations across Africa that can be used by American Express Card Members to purchase a range of different goods and services.

The integration of American Express into Flutterwave’s platform is expected to simplify cross-border transactions. Nigerian merchants will now find it easier to engage with international customers who prefer to use their Amex cards. This can lead to increased sales and revenue, as the barrier to accepting payments from a global clientele is significantly reduced.

Additionally, this development aligns with Flutterwave’s broader strategy of fostering financial inclusion and making it easier for African businesses to participate in the global economy. By facilitating seamless payments from international customers, Flutterwave is helping Nigerian businesses expand their footprint beyond local markets.

Fuel Subsidy Controversy: Government Pays Us to Sell at Half the Landing Cost, We’re Not Paying Subsidies – NNPCL

By
Samuel Nwite
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The Chief Financial Officer (CFO) of the Nigeria National Petroleum Company Ltd (NNPCL), Alhaji Umar Ajiya, has clarified the ongoing confusion regarding fuel subsidies and the financial operations of NNPCL.

Speaking in Abuja on Monday during the presentation of the company’s 2023 full-year financial results, which recorded a profit of N3.3 trillion, Ajiya disclosed that the government does no longer subsidize the cost of Premium Motor Spirit (PMS) it only compensates NNPCL for selling the product at half the landing cost.

He explained that for the past eight to nine months, NNPCL has not disbursed any subsidies to fuel marketers. Instead, the company has been handling the shortfall arising from selling PMS at government-mandated prices, which are significantly lower than the actual landing costs.

He stated: “In the last eight to nine months, the NNPC Ltd. has not paid anybody a dime as subsidy, no one has been paid kobo by the NNPC Ltd. in the name of subsidy. No marketer has received any money from us by way of subsidy.”

Ajiya further clarified that the government’s directive requires NNPCL to sell PMS at half the landing cost, with the difference being reconciled between NNPCL and the federation. This arrangement, which he referred to as “shortfall,” essentially means that while NNPCL is not directly paying subsidies to marketers, the government is indirectly subsidizing fuel by covering the gap between the market cost and the regulated retail price.

This clarification comes amidst reports that the administration of President Bola Tinubu plans to spend N6.8 trillion on fuel subsidies between August 2023 and December 2024. This figure, the highest ever recorded, has fueled public concern and criticism, particularly given the ongoing economic challenges facing the country.

Nigerians are questioning the distinction between traditional fuel subsidies and the current arrangement where the government pays NNPCL to sell PMS at a loss. Data from NNPCL indicates that the landing cost of fuel is approximately N1,200 per liter, while the official selling price is N600 per liter. Between January and June 2024, the government reportedly spent N7.8 trillion on what is essentially a subsidy, albeit under a different label (shortfall).

Alleged $6.8 Billion Debt and Credit Lines

Addressing concerns about NNPCL’s financial obligations, Ajiya acknowledged that the company has engaged in open credit arrangements with PMS suppliers, a common practice in the global downstream sector. He noted that these credit lines involve term agreements for payment, which are critical for maintaining a steady supply of petroleum products.

Dapi Segun, NNPCL’s Executive Vice President of Downstream Operations, also weighed in on the matter, disputing reports that the company owes $6.8 billion to suppliers. He explained that while there are outstanding payments, the figure is lower than the reported amount and is subject to fluctuations based on ongoing transactions.

“Concerning the outstanding to the suppliers, it is not in that magnitude that has been put out; it is actually lower than the $6.8 billion,” Segun stated. “What matters really is the relationship between us and our suppliers to ensure that we keep faith in making these payments to our suppliers, which we have done over time.”

Segun also highlighted the dynamic nature of these financial obligations, explaining that the debt figure is not static and fluctuates as payments are made and new supplies are received. He stressed that the primary concern for NNPCL is to ensure the continuous availability of PMS across the country.

“You would understand that it is not a static figure, and I wouldn’t want to be quoting any figure, when we make payments it goes down, when they supply products, it goes up.

“It is a dynamic way, but the most important thing is to ensure that we continue to make PMS available across the country,” he said.

The Subsidy and Ongoing Fuel Scarcity

Despite assurances from NNPCL that fuel will be available across the country in a few days, the Nigerian people are currently experiencing widespread fuel scarcity, exacerbated by perceived lapses in the subsidy arrangement and distribution inefficiencies. The Independent Petroleum Marketers Association of Nigeria (IPMAN), which represents over 3,000 members controlling the largest share of filling stations nationwide, has accused NNPCL of failing to supply enough products to meet demand.

Engr Shina Amoo, Chairman of IPMAN’s Ore Depot, expressed frustration during an appearance on Channels Television’s Morning Brief, citing a lack of adequate supply from NNPCL. He pointed out that independent marketers, who are crucial to fuel distribution, have been sidelined in favor of major marketers, leading to widespread shortages.

“There is no supply anywhere. For now, the only supply available is not well distributed. We have been making noise about the distribution pattern long ago,” Amoo said. “We had a type of arrangement before now, where we used to enjoy 70/30 supply based on our strength. If you go to areas like villages, and urban areas, you will see lots of independent marketers where you would not find any major or semi-major marketers.”

Oil Producers Warn Nigeria Against Mandatory Crude Oil Sales to Local Refineries, Citing Economic Risks and Legal Constraints

By
Samuel Nwite
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0

The Independent Petroleum Producers Group (IPPG) has issued a stern warning to Nigerian authorities against the forced sale of crude oil to local refineries, including the Dangote Refinery.

The group, which represents major upstream oil producers in Nigeria, expressed deep concerns that such mandates could lead to severe economic repercussions and violate existing contractual obligations.

This warning follows a directive from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), dated July 31, 2024, which outlined domestic crude oil refining requirements and forecasted production for the second half of 2024. The directive also requested monthly quotations for crude oil supply from all producing companies to licensed refineries in Nigeria.

In a letter addressed to the NUPRC Chief Executive, the IPPG, chaired by Abdulrazaq Isa, challenged the directive, arguing that it is both economically and legally problematic. The letter, dated August 16, 2024, invoked section 109(4) of the Petroleum Industry Act (PIA) 2021, underscoring that any supply of crude oil to a refinery under the Domestic Crude Oil Supply Obligations (DCSO) must be conducted on a willing buyer-willing seller basis.

Economic Damage and Legal Violations

The IPPG highlighted that the NUPRC’s directive could lead to “economic damage and self-sabotage of the Nigerian economy.” The group emphasized that under Nigerian law, the sale of crude oil to refineries cannot be forced by regulation or guidelines, as it must be commercially negotiated between the producer and the refinery, taking into account prevailing international market prices.

The IPPG explained that most producers, including NNPC Limited, are currently bound by fixed supply or forward sale contracts with international traders. These contracts, often established to bridge financing gaps in upstream investments, are secured by the producers’ barrels of crude oil.

Consequently, any directive mandating the diversion of crude oil to local refineries would not only breach these contracts but also expose producers to severe financial penalties and default risks.

“These contractual arrangements have become the necessary collateral obligations for producers (including NNPC Limited) and thus they currently have contractual rights to producers’ barrels of crude oil,” the IPPG stated. “In addition, crude cargoes are normally sold at least three (3) months in advance, and therefore your recent letters to some of our members received in August mandating DCSO volumes from July to December 2024 are not achievable.”

The group further warned that enforcing the NUPRC’s directive would cause a cascade of defaults across multiple financial obligations held by Nigerian producers. This could severely impact their ability to secure future financing, thereby hampering efforts to increase Nigeria’s crude oil production from the current level of 1.3 million barrels per day to the government’s target of 2-2.5 million barrels per day.

Impact on Nigeria’s Economic Stability

The IPPG’s letter detailed the broader economic implications of enforcing the NUPRC directive. It cautioned that compelling producers to supply crude oil to local refineries under these terms would “cause cross defaults across IPPG members” and “dry up a critical source of foreign exchange (FX) for the country.” Given that NNPC Limited has already engaged in a series of Forward Sale Agreements, which involve securing future revenues against upfront funding, any disruption in FX inflows from other producers could create a liquidity crisis, further destabilizing the Nigerian economy.

“The Foreign Exchange (FX) shortage would be acutely felt given that NNPC Limited has engaged in (and is currently marketing) a series of Forward Sale Agreements which mean future revenues are being secured against upfront funding,” the IPPG warned. “If the IPPG members cannot augment this gap with their own FX inflows, then it creates a spiral of liquidity funding that will further impair our economy on a macro level.”

Legal Arguments Against the Directive

In its legal argument, the IPPG pointed out that section 109(4)(c) of the Petroleum Industry Act (PIA) explicitly states that the payment for crude oil supplied to refineries should be in either US Dollars or Naira, as agreed between the producer and the refinery. The group argued that mandating the currency of transaction, or compelling producers to sell to local refineries outside of negotiated agreements, contravenes the principal law.

“Holders of crude oil refining licenses shall provide payment guarantees as required by the applicable lessee, and payment for crude oil purchased pursuant to obligations shall be in US Dollars or Naira, as may be agreed between the lessees or suppliers and the licensee of the refining license,” the IPPG stated, stressing that any attempt to override this provision would be legally untenable.

However, an energy expert has pointed out that the Petroleum Industry Act (PIA), sections 11 & 12 of the production regulations under the domestic crude supply obligations, mandates the NUPRC to issue a ‘request for quote’ to production lessees or licensees to mark up the shortage when there is crude oil shortage at domestic refineries – affecting national supply curve. The PIA thus empowers the NUPRC to withdraw export permits of the lessees or licensees if they fail to comply.

“Sections 11,12,14 & 15 of the production curtailment and domestic crude oil supply obligation regulations 2023 issued as a gazette pursuant to sections 109 of the PIA of 2021 — is very clear,” Kelvin Emmanuel, cofounder and CEO of Dairy Hills, said.

“Independent producers onshore and in shallow waters that sign pre-export financing contracts in forward sale agreements with international oil traders subject to stabilization clauses included in their unregistered joint venture agreements are not superior to the provisions of the PIA.”

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