Kenya’s Marketforce shuts down the ecommerce unit, RejaReja. This business has raised more than $103 million. It follows old Konga, OLX, Kalahari, Mocality, and other big funded ecommerce companies which have folded in Africa: “YCombinator-backed Kenyan retail startup Marketforce has announced the shutdown of its e-commerce arm RejaReja. The company’s co-founder, Tesh Mbaabu, via a blog post, disclosed that the shutdown was due to struggles with profitability.”

In a seminal article in Harvard Business Review, I quoted Kalahari CEO as he closed the business: ‘In closing some of their e-commerce properties, Naspers, a media and internet empire, noted that it was a “sad day for e-commerce” in Africa and cited “unprofitability” as a reason.’ Yes, the same thing the Marketforce team is citing.

Structurally and without a postal service, it is a waste of time to start an ecommerce business in sub-Saharan Africa unless you have shops for pick ups. Companies like the new Konga will be fine (they have many pick up locations via sister companies under Leo Stan Ekeh empire), but others which do not have those physical networks will struggle to make money. 

From Kalahari to Mocality, OLX to old Konga and Jumia, the result will be the same: B2C ecommerce is a waste of time.

Jumia is going on because it has resources even though it continues to lose state-level budget as a loss: “African online retailer Jumia reported a loss of $98.6 million before tax from continuing operations in 2023, which is a 52% decrease from 2022.“ The “decrease” is partly because of currency “loss-gain” and exit from some markets.

The challenge is marginal cost paralysis which destroys value as you scale the business. In other words, you cannot compound and leverage anything because your unit economics does not improve as you expand the operations. When a company operates in that type of market, your success will simply destroy you, as an inflection point will NEVER arrive, for a positive marginal cost positioning.

I refer you back to secondary school on marginal revenue, marginal price, marginal profit and marginal cost. In ecommerce in Africa, you will expect to see marginal loss! Simply, it is hopeless without a postal system!

Kenya’s Marketforce shuts down the ecommerce unit, RejaReja. This business has raised more than $103 million. It follows old Konga, OLX, Kalahari, Mocality, and other big funded ecommerce companies which have folded in Africa: "The company’s co-founder, Tesh Mbaabu, via a blog… pic.twitter.com/HBAv9qFKZt

— Ndubuisi Ekekwe (@ndekekwe) April 19, 2024

President Bola Tinubu has taken a significant step towards revitalizing the Nigerian education sector by approving a comprehensive set of policies aimed at improving learning outcomes, increasing enrolment rates, and ensuring academic security across the country. 

In a press release, Ajuri Ngelale, the President’s spokesperson, emphasized the importance of these reforms in addressing the pressing challenges faced by the Nigerian education system.

The newly approved policies, collectively referred to as the “DOTS” framework, target four key areas:

1. Data Repository: President Tinubu has given the green light for an extensive census to be conducted across all educational institutions, from primary to tertiary levels, encompassing schools, teachers, and students nationwide. Under the Data Repository initiative, data are required from (a) All schools in Nigeria from Primary to Tertiary level, their conditions and live-in facilities, proximity to one another, educational infrastructure, etc.

(b) All teachers in Nigeria, their qualifications, training support received, etc.

(c) All pupils and students in Primary, Secondary, and Tertiary institutions, gender, exam grades, etc.

The comprehensive data collected will serve as a foundation for informed decision-making and policy formulation, enabling targeted interventions and real-time monitoring at both the federal and local levels.

2. Out-of-School Children’s Education and Training: Building on existing efforts, the Federal Ministry of Education is actively implementing initiatives to address the challenge of out-of-school children. 

With approximately two million beneficiaries already benefiting from these interventions, the government aims to further expand its reach and ensure that every child has access to quality education and opportunities for personal development.

3. Teachers’ Development and Support: Recognizing the pivotal role of teachers in shaping the learning experience, the government plans to prioritize their development and support. This includes providing training in digital skills to facilitate the integration of technology in classrooms, thereby enhancing the quality of education and preparing students for success in the digital age.

4. Skill Development and Acquisition: President Tinubu has approved the establishment of a National Skills Framework designed to equip individuals with relevant skills tailored to the demands of the 21st-century global economy. 

It is believed that by addressing skill gaps and providing students with both specialized skills and foundational knowledge, the framework aims to enhance employability, foster economic growth, and reduce unemployment rates.

The implementation of these policies is expected to have a transformative impact on the Nigerian education system, paving the way for improved learning outcomes, increased enrolment rates, and greater opportunities for personal and professional development. 

By connecting the “DOTS” – Data, Out-of-School Children’s Education, Teacher Training, and Skill Development – President Tinubu is said to be demonstrating his commitment to building a brighter future for the youth of Nigeria.

This move is coming weeks after the president assented to the reenacted Nigerian Education Loan Fund (NELFUND) bill, which has been hailed by many as a game changer in Nigeria’s educational system. 

According to Mr. Akintunde Sawyerr, the Managing Director of NELFUND, accessing student loans under the revised act will require candidates to provide their Unified Tertiary Matriculation Examination (UTME) registration number, National Identification Number (NIN), and Bank Verification Number (BVN). These stringent requirements aim to ensure transparency and accountability in the loan disbursement process.

Speaking during an interactive session with members of the Education Writers Association of Nigeria (EWAN) in Lagos, Sawyerr revealed that approximately 1.2 million Nigerian students in tertiary institutions and government-recognized skill acquisition centers are slated to be among the first beneficiaries of the loan scheme. 

The funds allocated for the program, equivalent to one percent of the revenue generated annually by the Federal Inland Revenue Service, underscore the government’s commitment to investing in education and human capital development, according to Sawyerr. 

Elaborating on the loan disbursement process, Sawyerr outlined a two-step approach. Firstly, the allocated funds for school fees will be disbursed directly to the institution on behalf of the student, ensuring seamless payment and enrollment. Secondly, a stipend will be deposited directly into the student’s bank account, providing financial support to cover additional expenses related to their education.

Sawyerr explained that financially disadvantaged undergraduates seeking assistance for their education are encouraged to apply through the designated website, where they will be required to submit their matriculation details for verification. 

Importantly, beneficiaries will be expected to commence loan repayment upon securing employment or establishing businesses, ensuring sustainability and the continued circulation of funds within the education sector.

The implementation of these progressive education policies, coupled with the revamped NELFUND loan scheme, is seen as part of a concerted effort by the government to address the myriad challenges facing the education sector. 

These follow calls on the government to unlock the full potential of its youth and pave the way for a brighter future for all by prioritizing access to education and providing financial support to students in need.