There is a massive promise on the ascension of a digital currency, e-naira, in Nigeria. But e-Naira can also crack Nigeria’s economy. I have a 25 document which I have been creating on E-Naira as I continue to evaluate the opportunities and risk.  The fact is this: if E-Naira launches, expect everyone to move his or her money from retail banks to CBN (Central Bank of Nigeria) – and if that is the case, retail banks will have limited money to lend, freezing banking as we know it.

Magically, if people cannot borrow from banks because the money is in the CBN vault, the economy will crash as we cannot have growth. I do expect the CBN to cap how much people can keep in e-Naira; otherwise, our economy will fold. 

Already, my model is that up to 10% of Naira will be in e-wallets by 2025 and with that, retail bank-driven CBN pushed monetary policy will not “affect” 10% of naira. In other words, if monetary policies are designed around control via retail banks and money is warehoused in Pass, Flutterwave, Paystack, expect dislocations.

I am waiting for the CBN technical document on the digital currency. Depending on what they have there and the apparatus it wants to run the show, we will know what the future holds. But one thing is certain: if you disintermediate retail banks through e-Naira, you will destroy Nigerian economy overnight because companies cannot source funds for growth. You cannot expect the citizens to hold money directly with the apex bank and still expect the retail banks to still have money to lend!

Of course, from ease of use, no issues of failed banks to deal with, zero or extremely low transaction costs, to ability to engage citizens directly on monetary policies via many tools like interest rates, e-naira will be a positive.

A Nigeria’s Massive Opportunity Arrives in 2022 As Era of Fintech 2.0 Begins

Tesla is among the notable growth stocks that have recorded significant returns for investors. Despite the electric vehicle manufacturer’s stock slumping in 2021, it has maintained an edge over competitors.

According to data acquired by Finbold, Tesla stock registered an ROI of 224.93% between June 2021 and June 2020, outperforming some of its major competitors. Among the selected vehicle manufacturers, Tesla only trailed China-based NIO, which had almost double returns at 539.13%. Ford Motor ranks third with returns of 152.28%, followed by General Motors at 141.08%, while Volkswagen AG ranks fifth at 116.62%.

Other stocks with key returns include XPeng (75.47%), Oshkosh (74.08%), Navistar (60.29%), Toyota  42.19%), and Honda (25.22%)

Between the period, Tesla also maintained a superior stock price growing from $191.95 in 2020 to $623.71 in 2021. Elsewhere, last year, NIO’s stock price was at $6.9, while in June 2021, the stock stood at $44.1.

Tesla benefiting from green energy debate 

Having established its position as a  leader in electric vehicle manufacturing, Tesla stock benefitted from some of the initiatives around environmental conservation. According to the research report:

“In the wake of a new focus towards the climate change agenda, Tesla has been at the center of attention, with more investors betting on the company. Some jurisdictions are also enacting legislation favouring consumers opting for electric vehicles, and as a leader in the sector, Tesla stands to gain.”

Based on the Tesla returns, it is clear the massive gains made in 2020 were enough to sustain profitability for investors despite the stock slumping in 2021. The growth was mainly guided by fundamental factors like greater retail investor interest in the stock and the inclusion of the S&P 500 index.

However, for Tesla to remain with the upper hand, the company needs to look out for competition.

Source: Finbold newsletter

The Central Bank of Nigeria plans to unveil Nigeria’s digital currency. Yes, the e-Naira is coming next year. I am looking for startups which are thinking ahead of this new market, and ready to build a product for that future. While we do not know fully what it would look like, one thing I know is this: there would be new or updated payment gateways and possibly Nigeria will have nodes for “agents” at different levels of market stacks, from commercial banks to mama put and akara sellers. This is a cambrian-level opportunity and it looks promising.

The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has revealed that Nigeria will launch a digital currency. With this, Nigeria tracks other nations which plan or have launched digital currencies. China is expected to roll out the e-yuan, its digital currency, at scale, later in the year. The United States has also started work on e-dollars.

Next month, Tekedia Mini-MBA LIVE is converging a session to be anchored by Dubai-based Bitfxt (crypto exchange) and BoundlessPay (crypto payment) on Digital Currencies: E-Yuan, E-Dollars, and E-Naira. We do expect to learn a lot about this evolving market and how businesses and entrepreneurs could prepare for that future. Yes, I want to make sure people can pay for Tekedia Mini-MBA with e-Naira once it goes live.

At Tekedia Capital, this is an area we hope to invest if indeed the Central Bank of Nigeria (CBN) decentralizes the distribution of the e-Naira to the extent that our phones, portals, etc become our banks, and our bank accounts are now ‘warehoused” in the CBN, at least up to a level. 

If you have a compelling vision with a roadmap of that future, I will personally write a cheque once CBN shares guidelines on the protocol. More so, we would like to invite you to this exclusive conversation for the Tekedia community. Indicate your interest by commenting below.

The race to Fintech 2.0 in Nigeria is beginning next year. Are you ready? Who builds the first e-naira compatible API?

Despite what we have in the books now, it seems the Central Bank of Nigeria has found another point for the Naira: “The Governor of the Central Bank of Nigeria, Godwin Emefiele advised investors in the U.K that he expects the true value of the naira to be between N430-440 to the dollar. Mr. Emefiele made this comment in a Webinar organized by the Standard Bank of Africa (parent company of Stanbic IBTC Nigeria). According to sources who attended the event on Monday, Mr Emefiele told participants that the current exchange rate at the parallel market was between N430-440/$1 and not the black-market rate which closed at about N500/$1.”

In an apparent attempt to woo foreign investments, the CBN Governor also encouraged foreign investors to reconsider their waning interest in Nigerian Equities suggesting that some of the stocks were undervalued. Nigeria’s capital importation data into equities was just $755 million in the whole of 2020 compared to $1.8 billion in 2019.

Nigeria needs the foreign investors desperately into the economy as whenever they show interest in our stock market, numbers move. Yet, it is really challenging for the investors since if the Naira continues to move negatively in the forex market, taking mid to long term positions will become harder. This is compounded by the foreign reserves which have gone down to a four year low. If that trajectory does not change, another currency devaluation would be on the way.

Tough decisions coming early in Q3 2021 for the nation and it would be really challenging. Sure, crude oil price is showing positive signs and if happens at high volume, we could buy a few more months.

Meanwhile, the Nigerian government has inaugurated the National Steering Committee (NSC) of the National Poverty Reduction with Growth Strategy (NPRGS), with the aim to lift 100 million Nigerians out of poverty. The Chairman of the committee is the Vice President. This committee will establish a private equity fund, the Nigeria Investment and Growth Fund (NIG-Fund), to lead resource mobilisation drive and manage its resources. Besides this playbook, Nigeria needs to work to stabilize the Naira. If we keep the Naira fairly stable, investment capital will arrive, and government will not even need to expand bureaucracy.

As the world welcomes another American company crossing the $2 trillion mark on market capitalization, one thing is very evident: technology will power the empires of the future. Yes, it took Microsoft more than three decades to hit the $1 trillion mark, but about two years to hit the $2 trillion number, demonstrating the pace of value capture and the absolute redesign of global economic structures. Amazon is expected to join Apple and Microsoft over the next coming months; Google (yes Alphabet) is not far behind.

What a record for Microsoft: it took it 33 years to hit $1 trillion. In just two years, it hit $2 trillion: “While it took Microsoft 33 years from its IPO to achieve $1 trillion in market capitalization in 2019, the next trillion only took two years, thanks to a rise in interest in tech companies prior to the Covid-19 epidemic and throughout the health crisis.”

This is a new era and the new empires are united by one gene code: technology. As the changes happen, these four things are now very noticeable in this post-Covid-19 world.

• Hybridized Supply Chain: Flexible, adaptive, global and local, at the same time.
• Remote Everything: The web will run the world across sectors.
• Digitization and Cloud Migration: The pace will accelerate.
• Semi-automation: Disintermediation of humans will accelerate.

Many firms are winning around those constructs especially in cloud computing and digitization. Most possess these four characteristics.

• Perceptively innovative: you are always innovating. You never rest, always pushing for better products, services and experiences. You outperform competitors with new solutions for unmet needs.
• Evidently inspired: you inspire your users. You are modern, trustworthy and inspirational, you have a larger purpose, helping people live out their own values and beliefs.
• Ruthlessly pragmatic: your customers depend on you and you have their backs, making life easier by delivering consistent experiences. You make good on your promises.
• Customer obsessed: customers cannot imagine living without you. You know what matters to customers, finding new ways to meet their most important. needs.

Build on these tenets and win.