As technology provides deeper insights to make it possible for demand and supply to attain a more optimal equilibrium, reducing  information asymmetry, business models are evolving. From brokerage firms to commodities middlemen, we are seeing huge disintermediation in markets. While serving the rich still has a promise, the biggest opportunity now is for those who figure out how to serve a huge number of people at the lowest marginal cost.

That is why with $1,000, you can have an EFT account with Goldman Sachs because the bank is adjusting to a  new world, by going retail, with credit cards and mainstreet checking accounts . Indeed, that playbook is working as since it opened it, it has added billions of dollars in its valuation.

That takes me to Nigeria where Transcorp Hotels Plc, Nigeria’s most elite hotel chain, is going for the people. Yes,  Transcorp Hotels Plc has announced the launch of Aura, a new digital platform through which people can book accommodation, restaurants, and experiences”. Read carefully – “The new brand, Transcorp’s first in the alternative accommodation segment, is part of the company’s asset-light model, leveraging technology to deliver true hospitality, exciting experiences, and drive shareholder value.” Yes, alternative accommodation, check; asset-light, check;  leveraging technology, check. That is a new redesign.

Aura is Africa’s best platform for connecting travellers with great accommodation, good food, and memorable experiences. The platform is also an avenue for people with unoccupied homes, hotels, restaurants, or different skill sets that may interest others can earn an income by becoming hosts.

Simply, Transcorp is executing an Airbnb playbook. That playbook is called aggregation construct. And it is the most potent business model of the 21st century. More than 80% of the top 20 technology companies have an element of it. Yes, from Facebook to Google, Apple to Alibaba, Tencent to Microsoft, aggregation construct powers a critical element of their business systems.

Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and the customers, the advertisers focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible. Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process.

Transcorp wants to join that party. But it might have scored an own-goal by putting Aura inside transcorphotels.com for aura.transcorphotels.com. Whenever that happens, incentives change – and that is not always a winning formula.

Greetings. Tekedia Live Zoom Schedules for the week are as follows:

• Tue, March 9 | 12noon – 1pm WAT | Ecommerce in China – Dr. Henry Chan, CICP Asia

• Thur, March 11 | 7pm – 8.30pm WAT | General Topic, Your Edge Over Bigger Companies – Ndubuisi Ekekwe

• Sat, March 13 | 7pm – 8.30pm WAT | Consumer Marketing in FMCG – Emmanuel Agu. FNIMN, FIMC, FIPMA, MSC, MBA, Ashridge Alumnus, Group Marketing Director, Jotna (the LaCasera Company).

All links in the Board.

As the Central Bank of Nigeria (CBN) policy of Naira 4 Dollar Scheme kicks off tomorrow, we would be looking at how the policymakers  respond when live data begins to arrive. I have called it a “quasi-devaluation” of the Naira, but with the understanding that it is a short-term experiment, we should wait for the data to hit the CBN headquarters. But before that happens, this is what I expect to happen across most countries: remittance  inflow will improve but most may not be real! 

The Central Bank of Nigeria (CBN) needs US dollars desperately to help cushion the nation’s balance of payment, and fight deterioration of the Naira, and is going to Nigeria’s best export: the diaspora community. Yes, the apex bank has unveiled a really ingenious scheme called “Naira 4 Dollar Scheme”. Largely, if you wire US dollars to Nigeria via the approved IMTO (international money transfer operators) like Western Union, the payout bank will pay your recipient N5 per $I besides the recipient receiving the full amount you wired in US dollars. The CBN Governor mentioned in a Diaspora Series organized by Fidelity Bank Plc.

Yes, expect someone to wire $10,000 from New York, gets paid $10,000 in Lagos, and then the N50k bonus. The cost of wiring that money is never going to be more than N50k ($120); the cost to wire $10k from US to Nigeria is $17 via Western Union. Some do think they can use peer-to-peer platforms to move that $10k back to New York, and send it back again for another N50k in Nigeria. This loop can continue, and they will rip big bonuses from the Nigeria treasury!

But note one thing: CBN is aware of this potential risk and that is why it has this requirement that people use the approved IMTOs like Western Union and MoneyGram. Those entities most times will not allow anyone to wire more than $10,000 in a month. And by the time you start shopping for who to help you make extra N50k on your $10k, you can lose that $10k entirely! Yes, a snake can swallow that money, big time, even in New York.

I do think  that this policy is designed to incentivize Nigerian diasporas to send money home. It is too early to know if that will improve remittance over long-term; I mean after the program ends later in the year.  Personally, my choice,  as I noted in my Fidelity Bank presentation, would be to offer a seamless tax holiday on all profits through a special fund vehicle I called Diaspora Growth Nation Fund. 

Yes, if you invest in SMEs, startups, real estate or other productive areas, via official channels like banks, all taxes on profits over 5-10 years would be waived! That is a better way to get people to unload US dollars and hard currency on Nigeria. I am not sure people with many benjamins will care that $1 will add extra N5! That is a distraction! 

And if CBN is not careful, it could have a ponzi scheme on its hands with USD for Naira, being round-tripped, outside international money movement ordinance. Yet, the good news is that the bad guy will have to beat the US, UK in addition to Nigeria. And that is why I think abuse will be limited. But it is good to experiment and CBN is doing that which I think is good. It will see data and over time decide on what works.

Consistent with the global trend, Nigeria aspires to ensure that remittance flows and diaspora investments become a significant source of external financing. #Emefiele

— Central Bank of Nigeria (@cenbank) March 6, 2021

On Friday, I invested in a downstream technology sector of the oil, gas & renewables sector. It is a California-based startup. We will bring visibility on how people buy refined crude products & renewables, orchestrating demand and supply into a more optimal equilibrium, through reduction of information asymmetry. From finance to logistics to payment, we want to uber the downstream sector! And that downstream includes renewables.

I will make a proper announcement within the week. We need to digitize the energy sector.