We are in the final week of Tekedia Mini-MBA edition 5 after 12 solid weeks. It has been a wonderful journey with all co-learners and faculty. Here are the programs for this final week.

Lectures on Growth and Taxation are already in the Board. Four Faculty members are leading the session:

• Managerial Accounting, Business Decision Making and Growth – Idris Ayinde, ACA, CFA, EY  UK
• Tax Management for SMEs – Banji Adelaja ACA, Managing Consultant, Aradol Consulting
• Tax Treaties and Their Benefits – Emmanuel Eze, Manager, Federal Inland Revenue Service (FIRS)
• Regional Case: Tax Law and Compliance in Lagos State  – Abimbola Abdur-Rahman Lekki, Lagos Internal Revenue Service.

On Thursday, we move to Execution and Closure; already in the Board

• Effective Product & Service Pricing, Accelerated Revenue, Profit Maximization – Saima Khan, Partner, Strategic Pricing Management Group, Toronto, Canada
• Establishing Business Consulting & Advisory Services – Mustafa Yusuf-Adebola, Founder, Provisio Professional
• Driving Profitable Growth, Marginal Cost, Scaling – Prof. Ndubuisi Ekekwe
• Stimulating New Markets Through Innovation and Perception Demand – Prof Ndubuisi Ekekwe

Tekedia Live this week is scheduled thus:

• Tue | 7pm – 8pm WAT | Winning in Markets – Ndubuisi Ekekwe
• Thur| 7pm – 8pm WAT  | The Call to Business Execution – Ndubuisi Ekekwe
• Sat 7pm – 8.30pm WAT | It’s Graduation Day  –  Ndubuisi Ekekwe

Zoom links in the Board.

On Saturday, after the closure, certificates will become available. Thank you for joining us for this academic festival. The registration for the next edition is here.

Mr. Price left last year. Woolworths had departed in 2013, and Shoprite left a few months ago. Now Tiger Brands joins the bandwagon as South Africa’s retail/FMCG struggles in Africa’s largest economy: “South African company Tiger Brands, owner of brands like All Gold, Black Cat and Koo, agreed to sell its 49% minority shareholding in UAC Foods to parent UAC of Nigeria.” But this one is not on Nigeria; it is on the southern African companies. Yes, if you look carefully, Nigerian retail/FMCG has a promise, and the locals are outcompeting the foreign players here.

That promise requires a new business model. And if you check at what TradeDepot, Alerzo, Mint and some other B2B ecommerce startups are doing, you will notice one thing: they are improving open market operations, and provided that continues to happen, organized and formalized retail will struggle in a nation with decreasing purchasing power especially for imported products.

The purchase is expected to be completed in September, UAC of Nigeria said in a filing published on the website of the Nigerian Exchange Group. UAC of Nigeria currently owns 51% of UAC Food’s shares.

Tiger Brands acquired a minority state in UAC Foods in 2011, following a joint venture agreement with the Nigerian firm to manufacture and distribute some sausage, ice cream and water brands. It is exiting Nigeria about two months after another South African firm, Shoprite Holdings, sold its operations in the West African country to local investors.

Also, Tiger Brands in 2015 sold its shareholding in Dangote Flour to Nigerian parent Dangote Industries, three years after buying it.

These factors continue to shape the Nigerian retail/FMCG market, making things hard for these organized foreign retailers.

Product-Market Fit: To a large extent, formal retail in Nigeria remains highly underdeveloped due to infrastructures. While it makes sense to go to a farmer’s market in Cape Town and buy a cow, process it and dump in your deep freezer for months, large-scale shopping when there is no electricity makes no sense in Nigeria.

Economy: South Africa at close to 60 million people budgets an excess of $65 billion than Nigeria which is more than 3.5x its population. At a population of 210 million, Nigeria spends a paltry $35 billion when South Africa hits close to $100 billion. So, to a large extent, the middle class in Nigeria is very small and the purchasing power for organized retail may be limited.

Unlike South Africa, Nigeria falls within this segment which reshapes available opportunities for organized retail: “the most significant opportunity for African B2C startups lies with consumers who earn between $4 — $8 per day”. That spectrum is not a very sweet domain for organized retail. You need at least $15 per day to make it fascinating for the likes of Shoprite. So, there is a clear product-market fit dislocation and that has made organized retail challenging in Nigeria.

Also, checking the economy, South Africa collects excess of $85 billion from taxes. Nigeria’s revenue comes down to about $10 billion. This shows the scale of the disparity of the economies.

Competition: From daily to weekly open markets to shop on the street, to traffic sellers, Nigeria is a market. To win as an organized retailer, you have to beat those alternatives. But beating them when they do not tax becomes challenging. If margins remain low, issues crop up. Nonetheless, a new South African firm is in town: Pick n Pay.

You can also add currency in the list. Foreign brands may not like packing Naira when they have to struggle to exchange them for US dollars or Rand for largely nothing. So, the currency deterioration in Nigeria is a very big challenge.

As October 1 nears for the much anticipated e-Naira to be unveiled, the Central Bank of Nigeria (CBN) has started outlining guidelines for the digital currency. Nairametrics reported that the apex bank has sent a presentation to Nigerian banks about the e-Naira project, revealing more details about its design and operational module. The apex bank has also hired a technical partner, Bitt Inc.

According to the report, the Central Bank Digital Currency (CBDC) status of the e-Naira makes it a legal tender as it serves the same purpose as the fiat. However, the rules as outlined by the CBN separates them in some ways.

The report states that the e-Naira is a legal tender for the entire country and it will have non-interest-bearing CBDC status, a transaction limit for customers, and a value-based transaction limit.

Participants in the e-Naira program are featured in five stages, including:

Monetary Authority Suite: The Central Bank will be handing the first product component that includes issue, distribute, redeem and destroy the currency. Store data on a cloud server, monitor and analyze currency transactions.

Financial Institution Suite: licensed financial institution will be able to request currency or issue stablecoins, manage digital currency across branches, KYC, identify and AML compliance capability.

e-Government Suite: the government will be able to efficiently process digital payments sent to and received from citizens and businesses.

Merchants Suite: Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation.

Retail Consumer Suite: features user-centered designs for a great user experience. The architecture will be expandable to enable innovation; features advanced privacy and security.

Besides these, the CBN also outlined the proposed transaction cost for the e-Naira wallet.

The report highlighted other regulatory guidelines including that the digital currency infrastructure does not charge for user-to-merchant transactions and P2P wallet transactions.

Also, that it shall be the responsibility of Nigerian banks to promote and market the centrally issued digital currency as a cash alternative to existing and potential customers in support of the Nigerian apex bank’s goal for financial inclusion.

In order to catalyze the adoption of the e-Naira, banks will facilitate onboarding and provide world-class customer service.

Nigerian banks will be allowed to invite all their customers to register for the e-Naira. Besides pre-generated codes, the banks can send invitation codes for onboarding to a specific list of selected customers. Onboarding will be done for customers who have a code assigned by their banks. The banks have already validated and verified these customers.

The apex bank said the wallet provided by its institution was merely a stop-gap measure for meeting the deadline, given that banks and other licensed operators may provide their own wallets since it didn’t intend to compete against the banks, the report said.

And as part of the digital currency initiative, the NIBSS and other switching platforms will still be relevant, existing infrastructure can be integrated and leveraged in the e-Naira implementation.

Also, as a National Critical Infrastructure, the e-Naira system will be subject to comprehensive security checks, all data and personally identifiable information (PII) will be kept off the ledger and will not be stored on the ledger.

According to a further report by Nairametrics, the central bank announced three “Speed wallet” levels issued primarily to meet the October 1st deadline.

The wallet doesn’t compete with existing banks, but it stands in place whilst banks and other players create more wallets.

With the first tier, Speed Wallet can be used by anyone who does not have a bank account. However, users will have to submit a passport photo, a name, birth date and place, a phone number, and their address.

A fifty-thousand-naira limit is in place for Send & Receive, the minimum requirement is the individual’s National Identity Number (NIN), which will be validated. A cumulative balance of three hundred thousand naira is fixed each day.

For Tier Two Wallets, an account with an existing bank and Bank Verification Number (BVN) are the minimum requirement. The user is limited to sending and receiving two hundred thousand naira per day with a Cumulative Balance of half a million naira daily.

Tier three allows daily transactions of a million naira, with daily cumulative balances of five million naira. Just as tier two, the user requires at least a BVN.

Those who possess this merchant level can send or receive a million naira daily. The rules allow merchants to move as much money as they want into their bank accounts. However, the CBN notably did not make room for cryptocurrencies, affirming the stand it had taken on the digital assets earlier in the year.