Greetings – and please read the following from Tekedia Institute.
Tekedia Hub – “Facebook for Innovators” is ready. You can go ahead and register. The app will be released this week. We hope to use it to deepen learning. Tekedia Hub is an ecosystem developed for innovators and growth champions, to co-learn and co-share, on the mechanics of business systems and innovation. It has capabilities to enable members to form groups, follow others and be followed, and discuss important things, around business, education and more. Among others, the Hub will support learners and members of Tekedia Institute. Begin here – https://hub.tekedia.com/
Our Lead Faculty, Prof Ndubuisi Ekekwe, has an article to be published at Harvard Business Review at 9am New York time on Monday. It is on capturing value in market systems. We will share link here.
If you missed our last webinars- “The 2021 Winning Playbooks” and “The 2021 Outlook: Growth After A Redesign” – the recorded videos are here.
Meanwhile, Tekedia Mini-MBA 4th edition begins next week, Feb 8. If you have not registered, do it here – https://school.tekedia.com/course/mmba4/ . And please help us and share this message below with your colleagues and associates.
Tekedia Institute invites you to register for the 4th edition of Tekedia Mini-MBA (Feb 8 – May 3, 2021). Tekedia Mini-MBA is an innovation management 12-week program, optimized for business execution and growth, with digital operational overlay. It runs 100% online. The theme is Innovation, Growth & Digital Execution – Techniques for Building Category-King Companies. All contents are self-paced and recorded which means participants do not have to be at any scheduled time to learn.
This sector-agnostic program has more than 100 faculty from leading companies like Flutterwave, Microsoft, MTN, Access Bank, Afreximbank, KPMG, Shell, Schlumberger, Nigerian Breweries, etc, handling courses in more than 32 domains of business and leadership. More students graduated from it in 2020 than any school in Africa. From executives in Singapore to Nigerian bank managers to startup leaders in India, the last edition attracted learners from 35 countries and their testimonials are positive.
The acquired capabilities have helped learners to get new jobs, get promotions, raised funding, and advanced their careers and the companies they work for. The Institute is currently working with dozens of companies, providing a mechanism to co-design growth strategies in companies. More than 30% of learners are sponsored by companies and those firms include Soulmate Industries, Lily Hospitals, Problem Space New York, to name just a few.
Tekedia Mini-MBA costs N50,000 or $140 per user, and payment can be made via bank transfer, PayPal, Flutterwave, Bitcoin, etc.
Prof Ndubuisi Ekekwe, a World Economic Forum YGL and a regular writer in the Harvard Business Review, and who holds two PhDs and four master’s degrees, including a PhD from Johns Hopkins University, coordinates the program. He recently licensed a robotics patent to the United States Government. The ace circuit designer co-designed the accelerometer used in Apple iPhone’s early generations.
Besides the program, participants get other benefits, including Prof Ekekwe’s books like “The Dangote System: Techniques for Building Conglomerates”, Career Week, Innovation Week, Special Labs on Remote Work Administration (Krozu, USA), Decentralization Finance (BoundlessPay), Digital Security (Infoprive), among others, as coordinated by the Institute.
Class begins Feb 8, 2021 and we invite you to join us. Click to learn more and pay here: https://school.tekedia.com/course/mmba4/
In every market, there are frictions. Frictions extend into the needs of customers which they want fixed. A hungry man in Lagos, Nigeria, has a friction which is to find food and eat. A businesswoman looking for a loan has a friction of finding capital for her business. But due to information asymmetry (one party has more material knowledge than the other), markets are inherently imperfect, making it difficult for demand (the consumers or buyers) and supply (the providers) to come into an optimal equilibrium.
To overcome these challenges – the imperfection in markets and the friction experienced by market players, establishing companies becomes important. Through companies, factors of production are organized. And that organization of factors of production produces a force called “products and services”. Through products and services, companies exert forces which overcome the “frictions” experienced by customers. This is consistent with basic physics: a friction experienced by a customer must be overcome by a force (i.e. product or service) delivered by a provider. Companies exist to create products and services to fix market frictions!
Car start button on dashboard. Innovation start writes on push button. Horizontal composition with copy space and selective focus.
Tomorrow, Feb 1, Tekedia Institute will begin sending accounts to all members who have registered for Tekedia Mini-MBA edition 4 which begins Feb 8. Unlike in the past, the class will take place at the school. More so, we will begin scheduling for Live sessions (details in the dashboard). Business luminary Toyin F Sanni, CEO of Emerging Africa Capital, is coming and will be speaking on AfCFTA. Amazon is also sending a staff to discuss using insights to build great companies.
We are working hard to make it impactful for the community. If by Tuesday morning you have not received your login, please reach out to me directly.
Registration continues for Tekedia Mini-MBA: 12 weeks, online, self-paced and costs 50k or $140. Classes begin Feb 8. Begin here.
MTN South Africa has filed a lawsuit against the country’s telecom regulator, the Independent Communication Authority of South Africa (Icasa), over the upcoming 5G spectrum auction, thus becoming the second company, after Telkom, to do so.
The Icasa’s spectrum auction plan classified MTN and Vodacom as tier-1 operators, which limits their chances of participating in the auction to zero.
The bone of contention is the 3.5GHz radio frequency spectrum band, which Icasa intends to make available to smaller telcos in South Africa, excluding MTN and Vodacom. The band is key to the delivery of 5G broadband services, but with the tier-1 classification, MTN and Vodacom can only bid for 4G spectrum auction.
MTN filed the suit on Wednesday in Pretoria, asking the court to declare Icasa’s process for awarding the 3.5GHz spectrum “unlawful” and have it “reviewed”, “corrected” or “set aside.”
The regulator had decided to implement an auction structure that creates two tiers of mobile operator. MTN and Vodacom are in tier 1 while Telkom, Liquid Telecom, Cell C, Rain, are in tier 2.
Icasa plans an opt-in auction round in which tier-1 operators will be barred from participating while those in tier-2 will be eligible to bid for 5G spectrum.
If the plan goes, MTN will lose out of 5G roll out in South Africa where it has invested so much in the fifth generation network infrastructure. The telco has rolled out 5G network across 100 towers, using the temporary spectrum government assigned it. But it needs more spectrum to attain further coverage.
MTN now wants clarity on the tiering classifications and the opt-in round structure through court. It said it has exhausted all other options for clarification as the regulator was not forthcoming with explanation.
The company said in its suit challenging the definitions used by the regulator to differentiate tier-1 and tier-2 operators, that they are “vague, arbitrary and unreasonable.”
Telkom already has access to the 3.5GHz band, 28MHz of it, according to Tech Central. Now MTN is worried that its rival could use the opt-in phase to secure the available spectrum, leaving it on 4G.
Icasa’s decision to place MTN and Vodacom on tier-1 is seen as a move to clip their chances to dominate the 5G roll out. The South African government owns 40% majority stake in Telkom, which is the third largest telco in the country, behind MTN and Vodacom.
MTN and Vodacom have more financial muscle to outbid the rest of the telcos in the spectrum auction, a situation the South African government appears keen to avoid since it will cripple Telkom’s chances in the 5G play field. There is limited 5G spectrum, and between the telcos, only MTN and Vodacom stand in the way of Telkom who is trailing them with 12 million subscribers, not up to half the 30 million subscribers in MTN customer-base.
Liquid Telecom is the only other telco among them with 56MHz access to the 3.5GHz band. The company is already building a wholesale 5G network, with Vodacom paying it for 5G roaming services for clients, according to Tech Central.
However, MTN said it does not want the lawsuit to delay the auction which is expected to take place in March, although there is a pending suit by Telkom seeking urgent temporary relief to stop the auction.
Telkom Group Executive for regulatory affairs and government relations, Siyabonga Mahlangu told Tech Central it’s suing Icasa because it felt the invitation to apply (ITAs) for spectrum and a planned wholesale open-access network contained fundamental flaws that could entrench the dominance of Vodacom and MTN.
The importance of technology to modern day commercial activities is indispensable and has occupied a pervasive role not only in commercial transactions but all other spheres of human activities. Indeed so numerous are its forms and the chief among is Financial Technology popularly called Fintech. Innovations brought by technology have brought tremendous and radical changes to the traditional way of conducting commercial activities. Virtually all sectors of the economy of the countries in the world have been disrupted by the innovation brought by technology. Trading and provision of services have now been made easier as physical contact is no longer needed before commercial transactions can take place.
Capital market, a financial market for trading securities of companies, is not left out of this tremendous changes brought about by the technology, as many online platforms now available for buying and selling of company securities quoted on the Nigerian Stock Exchange. Hence, this article tends to bring out the impact of financial technology in the Nigerian Capital market and the needs for effective legal and regulatory framework.
DEMYSTIFICATION OF SOME CERTAIN TERMS
Before delving into the heart of this discussion, it is pertinent to demystify some certain terms like Financial Technology and Capital market for proper and easy understanding.
Financial Technology: Fintech, as it is mostly called and the name implies refers to that technology used in delivering financial services as opposed to the traditional banking method of delivering financial services. According to investopedia, Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. It has also been referred to as the synergy between finance and technology, which is used to enhance business operations and delivery of financial services. Examples of Fintech are Paystack, Paypal, Flutterwave, E-transact, Remittal, etc
Capital Market: Investment and Securities Act, 2007, the chief legislation on Capital Market, makes no provision for definition of capital market. But it has been defined as the financial market where trading of companies’ securities takes place. It has also been described as a financial market for long term financial assets such as government bonds, corporate bonds and equity and unlike money market which functions to provide short term funds : rather, it is a network of financial institutions that in various ways bring together suppliers and users of capital, facilitating the issuance of secondary and long term financial instruments
It is a market where investors and companies engage in trade of financial securities like bonds, stocks, etc
It is a market for buying and selling of shares and other financial securities. The Capital market is divided into primary markets where newly issued stocks are sold to the investors through a process called underwriting and secondary market for financial instruments that already exist.
Companies quoted on Nigerian Stock Exchange raise funds to cater for their financial needs
THE IMPACT OF FINANCIAL TECHNOLOGIES ON THE NIGERIAN CAPITAL MARKET
The elementary but chief function of FinTech is facilitating automated financial services delivery to the consumers. However, Fintech has now expanded beyond this role as many online platforms now exist for savings, crowdfunding, buying and selling of company’s securities, thereby making investment a lot easier for investors and companies to raise capital for their financial needs.
Security and Exchange Commission, the chief regulator of the Nigerian Capital market in its attempt to provide a regulatory framework for operation of Fintech firms and startups in the country launched a FinTech Roadmap Committee at the Q3 meeting of its Capital Market Committee in 2018. This shows that the SEC has come to the reality and impact of Fintech to the Nigerian Capital Market. The Committee came up with a report titled the “Future of FinTech in Nigeria”. It was formerly by the SEC on the 29th October 2019 at the Nigerian Fintech week.
Financial Technology now provides a platform where not only the investment in securities of companies take place but also commodities exchanges where tangible goods like agricultural products are traded. Examples of such platforms are Weath.ng, Chaka, Bamboo, etc. In others words, these platforms can be called online securities and commodity platforms. Also, the Nigerian Stock Exchange has adopted an automated trading system for securities trading on its floor.
It has increased participation of people investing in the securities of both local and foreign companies, thereby making it easier for both the investors and the companies to interact without physical contact.
Convenience: as reported by Mckinsey & Company on their website customer adoption of fintech is primarily driven by access and convenience. This in turn, reduces the time and stress in going through the traditional way of investing in securities of a company. Toeing this pathway, this has increased participation of low and middle income earners in the Nigerian Capital Market. It has promoted and still promotes easy access to the Nigerian Capital Market.
Accountability and Transparency are one of the driving forces of any financial investment as Fintech tends to portray these traits in their provision of financial services to the both the key players in the Nigerian Capital Market, even at a reduced level of documentation. Payment of taxes and other charges are done automated thereby promoting accountability and transparency. One can actually conclude here on this, that there has been a tremendous increase in government as there is no need for cash to exchange hands.
Integration and facilitation of payment for shares bought by investors is another chief role Fintechs play, as payment cannot be made possible without their services. This is made possible through card payment whether debit or credit, payment with account or bank transfer without visiting the traditional Banking institutions.
Finally, FinTech is invaluable to the development of the Nigerian Capital Market and its overwhelming role cannot be overlooked, hence the need for a proactive and effective legal and regulatory framework.
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THE NEEDS FOR EFFECTIVE LEGAL AND REGULATORY FRAMEWORK FOR FINTECHS IN THE NIGERIAN CAPITAL MARKET.
Provision of clarity and effectiveness of legal and regulatory framework of any legal system works magic. This cannot be over emphasized as this we result in the development of that country especially its economy. Lack of effective legal and regulatory framework on fintechs providing online securities and commodities exchanges trading has stifled the innovations and creativity of the fintech firms thereby limit their participation in the Nigerian Capital Market. This can be seen in the recent case between Chaka, an online platform for trading of securities and SEC, whereby the latter secured an interim order from the Investments and Securities Tribunal restraining the former and its promoters from advertising or offering for sales securities. This has led to the confusion on whether fintech firms dealing with securities as a stock broker or not.
It has been aptly argued that existing capital market regulations are inadequate in providing clarity as to the status and compliance requirements of Fintech companies.
As society keeps changing, legal frameworks must also be in motion in order to meet up the dynamic nature of the society. Our laws and regulations must keep to time and not remain static. This can be achieved by having proactive regulatory bodies saddled with the responsibility of making regulations for the Market through their enabling laws. The Capital Market of every country plays crucial roles in their economies, hence the needs for innovations.
Effectiveness and Clarity of legal and regulatory framework for FinTech in the Nigerian Capital Market would pave a pathway for development of the market which would enhance and equip it to compete globally.
CONCLUSION
In conclusion, Fintechs have come to stay and play a crucial role in the Nigerian Capital Market. The needs for an effective legal and regulatory framework cannot be faulted as this would lead to more innovations being brought by the fintechs to the development of the market.
References.
See http//: corporatefinancialinstitute.com
See the paper titled “An Introduction to the Capital Market”, delivered at a seminar in Abuja on 12th October 2000 by Dr (Mrs) Ndi Okereke Onyiuke, DG and the CEO of the Nigerian Stock Exchange. Quoted at pp 361 of Com pany Law and Practice in Nigeria by Hon. Dr J Olakunle Orojo.
Tayo F. ‘SEC VS Chaka: Key Lessons for Regulators and Securities FinTech Companies’ https://www.busnessday /opinion/article/sec–v- chaka-keylessons-for-regulators-and-securities-companies/amp/ .
