In the early 1960s, Norway wrote that Nigeria was an emerging nation with an extremely pragmatic agricultural program which must be watched, as it could become  a leading powerhouse in global markets. Despite the vagaries of civil war which paused the effervescence, Nigeria began to rise again. The Naira was stronger than the US dollars and airlines were putting travel visas on Nigerian passports with no requirements to visit any embassy.

Men flew from Lagos to watch Liverpool and then reconnected to the United States for the Yankees. Tuskegee University alone had hundreds of Nigerian students on scholarship, paid by the Nigeria people. Because the nation had better promises, well ahead of what America offered then, most returned home.

Factories, companies, etc, were opening up – and civil engineering rose to its pinnacle. Everywhere was a construction site! From Bata to PAN to Michelin, to anything you could imagine, Nigeria was rising to the mountaintop.

Then, we froze and began a descent. In this video, the world saw us as a place for opportunity, not a place looking for liberation. And they came. How can we return back to the beginning where things are MADE IN Nigeria?

On February 1 2020, Lagos State Government (LASG) , riding on the Lagos State Transport Sector Reform Law of 2018, re-enacted the ban of motorcycles, tricycles and others from operating in most parts of Lagos State (the State). While the initiative was termed by LASG as a move to secure the property and lives of people within the State, the ban however led to the fall of major technology companies such as GoKada, Opay, Max.ng etc. who were deepening the capacities of their motorcycle ride-hailing businesses.

Recall that earlier in May 2019, GoKada which was founded by Fahim Saleh, had raised about US$5.3 million in a series A funding round led by Rise Capital. According to the CEO, as captured by TechCrunch, Gokada intended to use the financing to increase its fleet and ride volume. Opay on the other hand, in August 2018, had benefited from a series A and series B funding of US$50 million and US$120 million respectively. According to Opay’s CEO, Zhou Yahui, as captured by Techpoint, Opay’s rides had tripled and the company made over US$10 million in daily revenues after putting the Series A fund to good use.

Similarly, the Central Bank of Nigeria (CBN) announced the re-enactment of the ban of cryptocurrency trading in Nigeria using the official banking system. This move was indeed targeted at start-ups involved in cryptocurrency. CBN in a circular dated 7 February 2021, reiterated that CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies but rather all banks in Nigeria had been earlier forbidden from using, holding, trading and/or transacting in cryptocurrencies, through a circular dated 12 January 2018.

In a recent move by Securities and Exchange Commission (SEC), in a circular dated 8 April 2021, SEC noted that all capital market operators (CMOs) involved with online trading platforms that give Nigerians the opportunity to invest in foreign traded equities, should desist and put an end to it. Citing the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 and 415 of the SEC Rules and Regulations, SEC noted that only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Again, this move was targeted at the likes of Bamboo, Trove, Chaka etc. It should be noted that Bamboo had raised about US$150,000 in funding since commencing business in 2019 as documented by Crunchbase.

Worthy of mention is the fact that CBN in a recent move, banned all Fintechs and third-party partners from accessing the BVN validation service. This was aptly put in Paystack’s communication to its customers which said “We’ve recently been made aware of a regulatory directive from the primary custodian of Nigeria’s BVN service to all their partners to suspend the provision of the BVN validation service to their third-party partners. In light of this news, we’re hereby informing you that the BVN Resolve service will be temporarily unavailable starting at midnight, April 8”. Given the onerous nature of the KYC requirements for financial institutions, this suggests that Fintechs may be unable to fulfil the KYC requirements imposed on them by the regulators.

The way forward for Fintechs and other techs:

In the light of the recent turn of events occasioned by the regulators in Nigeria, one could clearly see that the biggest challenge to Fintechs and other technology companies in Nigeria is not necessarily access to finance but regulations. While there seems to be a perfect product-market fit for the services churned out by techs, product-regulation fit appears to be largely non-existent. Consequently, the following are recommended:

1. Increased need for regulatory modelling and forecasting: An examination of the moves made by regulatory authorities reveal that they rely on existing laws and regulations to squash the activities of these tech companies. Seeing that laws already in place cannot be wished away, it is therefore pertinent that techs, as part of their market research efforts, invest in understanding the existing laws that may disrupt their activities, and take steps ahead of the regulatory authorities to ensure that they are better able to withstand any re-enactment or regulatory blow. The result of these would be a “What-if analysis” with respect to the technology regulatory universe in Nigeria.
2. Increased need for ‘co-opetition’ amongst tech companies: As described by Harvard Business Review (HBR) in its article titled “the rules of co-opetition”, HBR noted that co-opetition is simply the mix of competition and cooperation. Hence, co-opetition is the act of cooperating or collaborating with a competitor to achieve a common goal. For techs, particularly Fintechs, more than ever before, they need to come together in a common front, to engage the regulators either through legal means or roundtable discussions, in a bid to resolve the issues that may be fuelling the activities of the regulators which are eroding their businesses.
3. Increased need for lobbying and presence of political heavy-weights on their Boards: A clinical look at the outcomes of the recent regulatory quagmire suggests that these may be the result of lobbying by various interest groups whose businesses are being challenged by Fintechs. Thus, it is important that Fintechs respond appropriately by employing the services of political lobbyists who would be able to influence political and regulatory decisions in their favor. This technique has been historically employed in business and proven to be very effective especially in climes like Nigeria. The appointment of political heavy-weights to their Boards would give them leverage to influence the lawmakers to update old laws, and enact new laws that would favor their course.

There are several arguments that suggest that regulation stiffens innovation. As this gradually appears to be the case in Nigeria, there is now a heightened need for Fintechs to approach things differently. Paul Tudor Jones noted that we must adapt, evolve, compete, or die. I expect that these few recommendations put forward would enable the Fintechs to adapt, evolve, and compete but not die.

Nigeria is in financial trouble, and the Federal Government of Nigeria printed N60bn to share in March, according to a hard to watch video (below) by Edo State governor, Godwin Obaseki. This is not really news because we know that Nigeria has been printing money recklessly. After the freeze on bank dormant accounts, and unclaimed dividends, the only option was printing since the lenders are getting stricter.

Everyone prints, including the United States. But the difference here is that the US has a roadmap on how to cover the flanks while Nigeria is still digging. As the governor noted in the video, you are like a family which keeps expanding spending even when your source of income has diminished, pretending that everything is fine. Certainly, that playbook will not work in the long-term as one day the system will collapse.

Nigeria’s biggest challenge today is that our government is not communicating very well to the citizens. We continue to create the impression of abundance when scarcity has hit the land. In the days of Sam Mbakwe, ex-governor of Imo State, he might have printed a document and showed the citizens on the state TV, making a case why he needed help. He did those things many times and the citizens responded. 

As primary school kids, we contributed money to help him on building palm plantations, poultry, power plants, etc for the state. He never borrowed money from any foreign government. Mbakwe was like: if you need it, you have to fund it – and from the sincerity of his heart, Imolites responded. You pay school fees for your kids and you also send government money to fund developments.

I am still expecting President Buhari to come out clean and speak to his fellow citizens on the way forward. He needs help and now is the time to ask for it. 

In a speech last week, with eminent Northern Nigeria leaders, I presented a template on how Southeast leaders, post-war, rebuilt and positioned the region,  that 40 years after the war, from real estate holding to business to education, not many would remember that every family in Southeast began to rebuild with 20 pounds, from 1970. 

Yes, that Imo state records more than 96% literacy rate today, and a former FCT Minister noting that Southeast real estate investors control more than 70% of Abuja’s real estate, are strong data points to show that Nigeria has winning models. Across all domains, Southeast from the zero-ing which happened in 1970 should be exceedingly poor,  but they turned it around.

In 2007, the Minister for FCT,Mallam Nasir el-Rufai declared that “Igbos have acquired about 73 percent of landed property in Abuja”. He was addressing a gathering of South East elected officials, he also revealed how the National Chairman of the Peoples Democratic Party, PDP, Senator Ahmadu Ali abused him for demolishing his house in Asokoro District in Abuja.On a lighter mood, el-Rufai called on the Igbos to take Abuja as the sixth state of the South East in view of their dominance of the real estate sector of the FCT.

People write of Bitcoin wealth, but I tell them that the fastest accumulation of wealth in human history was done by Southeast Nigeria where in less than 40 years, men and women turned 20 pounds into empires! That is a Nigerian story and one we need to scale!

I have taken time to understand what happened and how they did it – Nigeria needs to use it to rebuild the nation. In a document I have titled “Readiness for Fly of the Eagle”, I have articulated everything in case the moment comes.

People, be hopeful – Nigeria will be fine.

Daily Trust has a piece on it  and I am producing below. 

 Speaking at a programme in the state on Thursday, the governor said the federal allocation for March was insufficient, forcing the Federal Government to print between N50 billion and N60 billion for states to share.

“When we got FAAC for March, the federal government printed additional N50-N60 billion to top-up for us to share.

“This April, we will go to Abuja and share. By the end of this year, our total borrowings is going to be within N15-N16 trillion. Imagine a family that is just borrowing without any means to pay back and nobody is looking at that, everybody is looking at 2023, everybody is blaming Mr. President as if he is a magician,” he said.

Lamenting the overdependence on crude oil, Obaseki said the rising debt profile is worrisome.

He said oil companies are shutting down in the country, challenging the government to come up with other means of revenue generation.

“Nigeria has changed. The economy of Nigeria is not the same again whether we like it or not. Since the civil war, we have been managing, saying money is not our problem as long as we are pumping crude oil everyday.

“So we have run a very strange economy and strange presidential system where the local, state and federal government, at the end of the month, go and earn salary. We are the only country in the world that does that.

“Everywhere else, government rely on the people to produce taxes and that is what they use to run the local government, state and the federation.

“But with the way we run Nigeria, the country can go to sleep. At the end of the month, we just go to Abuja, collect money and we come back to spend. We are in trouble, huge financial trouble.

“The current price of crude oil is only a mirage. The major oil companies who are the ones producing are no longer investing much in oil. Shell is pulling out of Nigeria and Chevron is now one of the world’s largest investors in alternative fuel, so in another year or so, where will we find this money that we go to share in Abuja?” he asked.

Chinese authorities have hit e-commerce giant Alibaba with a 18.23 billion yuan ($2.8 billion) fine for abusing its market dominance.

Alibaba has been under the radar of Chinese regulators since last year. In December, the State Administration for Market Regulation (SAMR), launched an investigation into the practices of China tech giants. The e-commerce platform was found guilty of forcing merchants to choose one of two platforms rather than being able to work with both.

SAMR said on Saturday it had determined that Alibaba had been “abusing market dominance” since 2015 by forcing its Chinese merchants to sell exclusively on one e-commerce platform instead of letting them choose freely among different services. Vendors are often pressured to side with Alibaba to take advantage of its enormous user base.

Late last year, the Chinese authorities launched a regulatory clampdown on China’s online industry, in a first shakeup that had Ant’s $34 billion proposed IPO suspended.

“Today, we received the Administrative Penalty Decision issued by the State Administration for Market Regulation of the People’s Republic of China,” Alibaba said in a statement. “We accept the penalty with sincerity and will ensure our compliance with determination. To serve our responsibility to society, we will operate in accordance with the law with utmost diligence, continue to strengthen our compliance systems and build on growth through innovation.”

Jack Ma, Alibaba became a person of interest in China’s regulatory clampdown for being critical of the authorities.

Ma accused the institutions last year of having a “pawnship” mentality of using collateral instead of advanced credit ratings and watchdogs of not knowing the difference between regulation and supervision.

His outburst attracted further attention from the authorities who wanted to make a lesson statement to the online industry and individuals heading them. Ma went into hiding for weeks.

A barrage of regulations rolled out by SAMR in the following months means that things will never go back to the old ways, when there was a lax oversight function, in the tech industry.

SAMR said Alibaba’s actions stifles competition in China’s online retail market and “infringes on the businesses of merchants on the platforms and the legitimate rights and interests of consumers.”

The fine amounts to about 4% of the company’s 2019 revenue. Experts say it will spur a positive change in China’s tech industry.

“There has been weakness in China’s big tech stocks and I think this fine will be seen as a benchmark for any other penalties which could be applied to the other companies,” said Louis Tse, managing director at Wealthy Securities in Hong Kong.

It is believed that Alibaba’s fine is a kickoff of a ton of sledge hammers that the government has in store for big players in the tech industry caught in monopolistic and anticompetitive practices.

“What comes after Alibaba’s fine is the likelihood that there will be damage to China’s other internet giants,” said Francis Lun, CEO of GEO Securities, Hong Kong.

“Their growth has been enormous and the government has turned a blind eye and allowed them to carry out uncompetitive practices. They can no longer do that.”

Reuters reported in February that China’s big technology firms have been stepping up hiring of legal and compliance experts and setting aside funds for potential fines, amid the antitrust and data privacy crackdown by regulators.

Wium Malan, an analyst at Propitious Research, Cape Town, who publishes on the Smartkarma platform, echoed the sentiment describing the fine as a “clear statement of intent”.

For Alibaba, Malan said, the fine was “affordable” but that the market was still “waiting to see what the ultimate impact would be from the Ant Group restructuring, which still leaves a lot of uncertainty”.

Alibaba, which has been forced to learn obedience, said it fully cooperated with the investigation, conducted a self-assessment and already implemented improvements to its internal systems.

“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said.

Meanwhile, in Nigeria, Dangote Group and Flour Mills have filed a petition to have a competitor, the BUA Group, shut down its sugar refinery, as its function will mean disrupting their monopoly in the sugar industry.

It’s a tale of contrasting government approach to economic growth. While China harps on fiscal policies that allow competition, Nigeria fosters monopolistic practices by giving selected companies a preferential treatment. Experts said it is sad that while other countries are building economies where prices are determined by market forces, the largest economy in Africa does not even have anti monopoly watchdog.