In the era of metaverse, an internet version of real life, companies are in a race to create a digital version of environments and cultures. The new digital era has seen the emergence of many startups with an increasing number of investors backing them.

Following this trend, Afropolitan, a community-as-a-service startup that wants to build a digital nation for Africans, announced that it has raised $2.1 million to build an Afro Digital Nation.

The investment is backed by over 25 Angel investors: Balaji Srinivasan, a high-profile figure in the crypto space and the ex-CTO of Coinbase, Elizabeth Yin of Hustle Fund, Shola Akinlade of Paystack, Ian Lee of SyndicateDAO, Iyinoluwa Aboyeji of Future Africa, Olugbenga Agboola of Flutterwave, Walter Baddoo of 4DX Ventures, Jason Njoku of IROKO, Tobenna Arodiogbu of Cloudtrucks, Ngozi Dozie of Carbon and Dare Obasanjo, senior product manager at Meta.

Also participating are Venture Capital firms: Hashed, Atlantica Ventures, Microtraction, Cultur3 Capital, Shima Capital, Savannah Fund, Ingressive Capital, Audacity Fund and RallyCap Ventures.

Afropolitan was founded by Eche Emole and Chika Uwazie to create a Digital Nation that will enable all Africans to build abundant lives. According to its manifesto, building a network comprising the best that Africa and the diaspora offer across art, finance, tech, health, sports, and media. Afropolitan wants to be the first-ever internet country in the future.

Afropolitan’s strategy of building a Digital Nation

Afropolitan, in a manifesto highlighting its strategy of building the Digital Nation, referenced Facebook as a proof that a nation made up of common interest could be built online.

“Human beings are social animals. All that is good and noble about us stems from the fact that we need each other. In the most basic sense, building a new country is a process of scaling a social network around a shared mission and principles. Social networks are formed online and tend to stay there in our time. But what if we built a new network and migrated it into the real world via a city (or Network of cities)?

“The internet enables people to organize around shared values at scales that were previously unthinkable before the current century. If it were a country, Facebook would be the largest one globally. With the advent of cryptocurrency, the next Facebook will not be a social network with a passive online community but rather a full-blown digital republic coordinated by its native currency and a unifying mission,” it said.

The startup touts Balaji Srinivasan’s Network State strategy as the most viable strategy to build such a country — in the 21st Century. The Network State is a digital nation launched first as an online community before materializing physically on land after reaching critical mass.

Afropolitan’s Master Plan,  per its manifesto

The best way to reform an obsolete system is by building a newer, more straightforward system. Afropolitan’s objective is to solve the Crisis of Legitimacy experienced by Africans worldwide by building a new source of Legitimacy embodied in our Digital Nation.

We will do so in four phases:

Phase 1: Network

In Phase 1, we seed our Network by communicating a clear and energetic vision for the world we want to build. We will drop an NFT campaign outlining mythology for our new nation. Afropolitan NFTs will also grant members a digital passport, alongside access to events and future value-added services.

Phase 2: Come for the Network, Stay for the Tool

Speaking of value-added services: Beyond the diaspora, scaling the Afropolitan Network will require providing maximal utility to our members. In Phase 2, we will launch the Afropolitan Super App to bring together all the utilities within the Afropolitan ecosystem under one roof. Members will be able to monitor their holdings, send money to anyone across borders, earn by contributing to the DAO, and buy goods and services. Most importantly, they will be able to watch the Network as it grows around the world, thanks to a native media feed. The whole thing will feel like a movement.

Phase 3: Minimum Viable State

Phase 3 is about preparing for our transition from the digital to the virtual. Our goal at this stage is to build up legitimacy through state capacity. We will create a network of seed institutions to govern our Network, including subsidiary funds, organizations, and a developing internal economy.

Phase 4: Foundation

Finally, in Phase 4, we leverage the Network, capital, and legitimacy accrued over the last 3 Phases to acquire land in negotiation with partner governments. The land piece will look like a “Chinatown/Afropolitan Town” where our members can establish a physical presence and create economic opportunities. At this stage, the Network State will serve as the “digital capital” which governs our physical Districts. Eventually, we will build a more extensive network of Charter Cities akin to Singapore and Hong Kong.

I wrote here that the best future for bitcoin and crypto will come when the government pays attention, and helps them, by regulating the sector. Bitcoin and cousins are software-currencies – and humans make software. Because humans are centralized in the formation and utilization of factors of production, within the ordinances set by governments, Bitcoin cannot operate on the illusion of technical decentralization. 

Yes, when inflation hits or recession is loading, Bitcoin feels the pain because some cryptos would need to be saved. Most crypto “investors” typically use Bitcoin (BTC) for collateralization when they design those nonsensical margin plays. So, if one low-quality crypto begins to struggle, they need to release their BTCs to cover their margins. And just like that, BTC will get into the mix. BTC can also be saved by USD!

And do you know the most troubling part? In those cryptos, some privileged investors do wash trades (illegal in regulated assets), and get away with them because the assets are not regulated. In other words, no one is watching those trades (using multiple brokers to inflate and dump)!

Microstrategy has become well known in the world of corporate finance for its monster holdings of Bitcoin. With crypto in free-fall, however, BTC has become quite the liability for shareholders. Now, CEO Michael Saylor wants the government to step in, most likely to preserve the firm’s bottom line. His plea to regulators: Crack down on crypto industry’s shaky practices—the “parade of horribles” as he describes it—that are dragging down the price of Bitcoin (Fortune).

The CEO of MicroStrategy, Michael Saylor, has seen enough and is asking the government to come and help the sector: ‘His plea to regulators: Crack down on crypto industry’s shaky practices—the “parade of horribles” as he describes it—that are dragging down the price of Bitcoin’.

MicroStrategy invests in Bitcoin; due to the paralysis in Bitcoin, its shares have fallen from a 12-month high of $891 to $184.

What an irony – the world of decentralized crypto now needs a centralized government to help.

Speaking in a webcast with NorthmanTrader founder Sven Henrich, Saylor said Bitcoin was being caught in the crossfire of a collapsing crypto market since it often served as collateral on margin loans for less proven tokens.

“What you have is a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure, and they are all cross-collateralized with Bitcoin,” he argued

The Biggest Irony in Bitcoin: It Needs Government Protection To Thrive

As the ripple effects of Russia-Ukraine war cut through economies, exposing many to inflation as the cost of living rockets, Nigeria, Africa’s largest economy that has helplessly watched the economic spikes take a toll on its people, is about to see its situation exacerbated.

On Monday, the Independent Petroleum Marketers Association of Nigeria (IPMAN) asked marketers across the country to begin dispensing petrol at N180 per liter and above, as it’s no longer possible to sell at the government’s approved price of N165 per liter.

“The chairman and executives, in conjunction with some senior members of our unit, organised a press conference today, 20th June 2022, at IPMAN HOUSE Ejigbo Lagos, where we explained our predicament with the current price of PMS at the private depot.

“We explained that with the current price, there is no way we can sell less than N180 per litre. On this note, members are hereby advised to sell at a sustainable price within their environment.

“Just make sure that the price is on your pump. Kindly contact the secretariat should you have any authority challenging your operations,” IPMAN spokesman Akeem Balogun said in a statement to Peoples Gazette.

Recently, there has been an uptick in queues at petrol stations, signaling imminent scarcity of petroleum products once again.

Earlier, petrol distributors and the Nigerian Association of Road Transport Owners (NARTO), had cried out to the federal government, asking for permission to increase freight rate as the price of diesel, which has risen as much as N800 per liter, is making their business unsustainable.

In response to their outcry, President Buhari, last week, approved the upward review in freight rate for transporters. This was disclosed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

“The review was necessitated by the upswing in the global price of petroleum products especially automotive gas oil (diesel) and its implication on the cost of transporting premium motor spirit (PMS) nationwide,” NMDPRA said, adding that the transporters’ freight rate has been reviewed to reflect current market realities.

Nigeria is facing a serious challenge in its downstream sector that has been compounded by rising oil prices.  Fuel subsidy, which is gulping nearly 30% of Nigeria’s 2022 budget, has put the government in a difficult situation. The government has repeatedly failed to remove the subsidy due to opposition from the Nigerian Labour Congress and civil rights groups, who fear that its removal would deteriorate the already bad economic situation of the country.

However, without a choice, the government is succumbing to the harsh realities of the oil market.  With crude oil selling above $100, Nigeria needs to double its $62 budget’s oil benchmark to sustain the subsidy payment and keep pump price at the N165 per liter cap, which it has been borrowing to maintain.

The Finance Minister said Nigeria will need further N4 trillion if the subsidy is to be maintained in the next six months. But selling fuel at N180 per liter means Nigerians will experience a new height of economic hardship. For a country where businesses depend mainly on power generators for electricity, the already high cost of goods services is expected to see further spike. This will push inflation, which is currently at above 17%, further up.

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In the Nigerian Business environment as well as any other jurisdiction, no factor is usually as important as the level of access to Credit facilities which are a means for getting businesses running as well as a means of plugging gaps in individual finances.

In the same length, no issue bothers those in the business of rendering Credit services more than the issue of recovering its receivables, specifically debts owed by their customers, which has led to the creation of a sub-industry on its own – the Debt Recovery sub-sector.

With the coming of Fintech, the problem of recovering debt hasn’t gone away but has instead taken a digital form, with debtors sometimes playing the system to take several loans on the basis of either inaccurate or concealed unfavorable information that would ordinarily disqualify the borrowers from getting a loan. This has led to many Digital lenders, some of them less than transparent themselves, turning into Digital loan sharks and using Debt Recovery methods that would qualify as some of the most deeply upsetting forms of Cyber-bullying.

This article aims to enlighten Digital lenders, be they Digital Banks, Digital Financial Institutions or Moneylending companies, on the full extent of Debt Recovery as a concept and some of the legitimate methods for Debt Recovery under Nigerian law.

For starters, Debt Recovery is simply the process of securing payment from borrowers, be they individuals, businesses or companies, for Monetary debts owed to other companies or individuals which were not paid as at the time and in a manner agreed between the borrowers and lenders.

This will then lead us to some of the permissible methods of Debt Recovery under Nigerian law which are as follows:-

1. A Conditional Bill of Sale :- This is a document that grants to the lender from the borrower a conditional title to a piece of moveable property (or chattel) legally owned by the borrower or his guarantor as a security for the loan. Conditional Bills of Sale are enforceable debt instruments that grant speedy collateral security for lenders and are to be registered with the Bill of Sale Registry under the Directorate of  Commercial Law of the Ministry of Justice in places like Lagos State.

By requiring that this document be executed at least digitally, Digital Credit providers can be assured of collateral security on the Back-end for their services.

2. Global Standing Instructions :- These are legal conveyances signed by borrowers that allow for the recovery of debts as at when due from all accounts belonging to or maintained by the borrowers when they’re in default of their repayment obligations other than the accounts domiciled with the Creditor lender who must be a Bank or Financial Institution licensed by the Central Bank of Nigeria.

Global Standing Instructions can be executed digitally and provide a smooth process of quick recovery and NPL(Non-Performing Loan) reduction in the Banking Sector. Global Standing Instructions however, do not apply to penal charges accruing on a loan as part of the outstanding obligations of a borrower.

3. Small Claims Actions :- Small claims actions are basically lawsuits that are designed by deliberate policy in states like Lagos to aid in the quick recovery of debt sums below 5 Million Naira in a quick, relatively affordable and efficient manner.

Small claims actions can be carried out in person without the necessity of hiring a lawyer to appear in court (though a Lawyer’s input in filing and commencing a small claims action is necessary) and are required by Practice Directions of the Magistrate Court in places like Lagos to be beyond 60 days (or 2 months).

Small claims actions are advantageous because they can be enforceable against relatively minute sums that would ordinarily be too negligible to hire a Debt Recovery agency or a law firm.

4. Debt Recovery Actions via Summary Judgment :- These types of actions are usually actions that are for sums of 10 Million Naira and above and are usually filed as liquidated sum demands for judgments of the Court based on the borrower having no reasonable defense to such suits, hence the term “Summary Judgment”, especially where the borrower had admitted to the existence of the debt in question.

Debt Recovery Actions of this nature are under the jurisdiction of State High Courts and can be carried out for huge debts , though it must be pointed out that they usually take longer in terms of time and can be considerably expensive in terms of filing costs and legal fees.

5. Company Voluntary Arrangements :- A new method of Debt Recovery introduced by the Companies and Allied Matters Act 2020, these are simply proposals by a company to its unsecured creditors (creditors that advanced unsecured loans not backed by any collateral or security) that result in a binding agreement or understanding for the satisfaction or liquidation of the borrower’s debts .

6. Administration :- This is also a new method of Debt Recovery introduced by the Companies and Allied Matters Act 2020 and involves the appointment of an Administrator by a creditor/lender rather than a liquidator or Receiver/Manager, to manage a debtor company diligently for the repayment of a due debt. This is an alternative to the sometimes unnecessary practice of winding up a company via the appointment of a liquidator.

7. A Winding-up Petition :- This should be a last resort and is applicable to debtor companies owing a minimum requirement of Two Hundred Thousand Naira. 

This requires filing a petition to the Federal High Court and asking for the appointment of a Liquidator to oversee the process of Winding-up which usually involves satisfying the debts of the company in order of priority. This can take up to a year or more. 

8. A Criminal Petition :- This is only applicable in the event of a dud or dishonored cheque being advanced by the borrower in exchange for the loan at the time of transacting between both parties or the obtaining of the loan based on false information (a misrepresentation) given deliberately by the borrower. Debt Recovery is STRICTLY a Civil matter.

These options listed above are part of the options available for creditors in Nigeria and should NEVER be ditched in favor of illegal practices like Debt-Shaming which involves unethical disclosure of a public nature by a lender to either the public or 3rd parties known to the borrower/debtor that are not privies or parties to the loan transaction, usually with information about the debt aimed at shaming the loan defaulter into repaying his loan debt.

This practice is a Criminal violation of the Nigerian Data Protection Regulations 2019 as well as a breach of the Cybercrime Act which can lead to a blacklisting of the digital lender, a fine imposition from the National Information Technology Development Agency (NITDA) as well as Criminal Prosecution and business license revocation.

From the above, it is hoped that the ability to make a better-informed decision on the Debt Recovery method best suited for a particular circumstance as well as what would be considered best operating practice in Nigeria’s Finance sector.