As a dynamic business school which educates with the antennas of the market, Tekedia Mini-MBA will teach a new course on satellite broadband with a case study of SpaceX Starlink now that we have the product and the pricing model ($600 hardware, $43 monthly service).

Elon Musk’s SpaceX Starlink is just about ready in Nigeria. But the price will shock many people: US$43/month service and a one-time hardware cost of $600. With that, you get a high-speed, low-latency broadband internet in remote and rural locations across the nation. In the US, the average cost for service is $110/month. So, it will be interesting to know if the bandwidth will be the same since the price in Nigeria is well lower.

Your business will change. Your career will change. Because satellites will unlock new vistas; join the next Tekedia Mini-MBA starting Feb 6 

80.7%. That is the magic number in Nigeria, the debt service to revenue ratio for the 2023 national budget. In other words, you pay N81 to service debt for every N100 received as revenue. If you swap that debt service for marketing cost, you get the financial trajectory of some e-commerce companies in Africa. Of course, we know the destinations and outcomes for those companies – and the reason Nigeria must avoid packing debts when the debts are not used for productive endeavours which can earn revenue to pay them off.

Nigeria’s debt service to revenue ratio is reported as 80.7% according to the information contained in the 2023 Budget presentation made by the Minister of Finance.

The report reveals a total debt service of N5.2 trillion in the first 11 months of 2022 out of a total revenue of N6.49 trillion.

That said, Buhari has innovated well on revenue collection. Our tax agency has deployed new playbooks. Our business received an email on Jan 2nd on ITF fee, and I was like: really, the government was already open for 2023.

Of course, we need to innovate on growth policies at the same rate we have put on tax collections. But generally, the government is doing better on revenue – those bars continue to go up even though I would have wished, it rises faster. If we keep the debts off, we will have more funds to take care of things in Nigeria. Right now, it is a vicious circle as the more debt servicing rises, the fewer are the funds available for education, healthcare, etc.

Indeed, we can learn from agency banking and explore how to use some of those structures to improve tax collections.

This year also saw an increase in Agent Banking with an all-time high of about 1.4 million agents spread across the country, through the Shared Agent Network Expansion Facility (SANEF). Consequently, the volume of PoS transactions rose by 24.3 % to 878.4 million as of September 2022, from 706.8 million in the corresponding time last year. The value stood at 4.6 trillion.

Zenith Bank has become the latest financial institution in Nigeria to suspend naira debit card transactions on international POS and web due to the nation’s forex crisis.

In an email to customers this week, the tier-1 bank said the Visa or Mastercard-powered naira-based operation will be suspended henceforth, joining a growing number of other banks that have made the same decision.

“Please be informed that you will be unable to use your Zenith Bank Naira cards for International Automated Teller Machine (ATM) cash withdrawals, POS transactions and web transactions,” the bank said.

Zenith bank said the suspension will take effect from January 9th, 2023.

“If you have international spend requirements, simply visit any of our branches and request for a foreign currency debit or prepaid card, which are available in US Dollar, Pounds and Euro variants,” the bank added.

Other financial institutions have made similar moves as the situation tightens. Last week, Guaranty Trust Bank announced the same decision in an email sent to customers, compounding the concerning development that began last year.

In early February and March 2022, Zenith Bank and the United Bank for Africa reduced their international spending limit on their naira cards from $100 to $20 a month, a decision understood to be born of the stringent policies by the Central Bank of Nigeria, aimed at protecting the naira.

The CBN governor, Godwin Emefiele, had last year, revealed that the apex would not continue to supply banks with foreign currencies. He said banks need to engage in export to generate forex.

With limited supply of foreign currencies, the banks apparently do not have enough forex liquidity to sustain thousands of POS, ATM and web-based international transactions powered by debit cards. The situation has eventually created the suspension of debit card international transactions, which every Nigerian bank is expected to effect very soon.

In July last year, Standard Chartered Bank announced it’s suspending international transactions on its naira visa debit. The announcement was followed by other financial service operators like Flutterwave, Eversend and other fintech platforms, announcing they have stopped virtual card services for international transactions.

In September 2021, First Bank announced that it’s suspending international transactions on its naira Mastercard, after an earlier decision to reduce the international spending limit on naira cards from $100 to $20.

The banks have always advised customers to get foreign currency debit or prepaid cards, which are going to be funded outside the Investor and Exporter official exchange rates. This means that individuals and businesses in Nigeria depending on bank-issued cards to carry out international transactions will still have to buy their respective foreign currencies at parallel market rates.

At the unavailable I&E window rates, dollar sells for N461.50/$1 while at the parallel market, it exchanges at about N731/$1, as of Friday.