Softbank experiences another bad timing as Germany’s Wirecard crashes. Wireacrd had attracted a $1 billion investment from SoftBank in April 2019 to finance Wirecard’s expansion into Asian markets. Today, Wirecard, after revelation that the  $2.1 billion the company had reported on its balance sheet did not exist, has dropped to less than $2 billion in valuation from the high of $27 billion. This is another poor run for Japan’s Softbank. Maybe it is time for Softbank to try a mega investment in Africa. We could make it whole.

In a deepening fintech industry scandal, the former Wirecard CEO was arrested Tuesday on charges of inflating the company’s balance sheet, said German prosecutors. The payments firm, which saw boss Markus Braun step down last week, has been unable to locate $2.1 billion in cash that was missing from its balance sheet — which the company said Monday probably doesn’t exist. Wirecard has withdrawn its most recent financial results and is now weighing “a full scale restructuring” to survive, Bloomberg reports.

To show how bad things are in Softbank, the company is cutting “15 per cent of jobs at the investment arm which manages its $100 billion Vision Fund, following a series of misplaced bets which damaged its overall value. The Vision Fund, which is responsible for taking major stakes on behalf of Softbank in tech startups such Wework and Uber, has a global staff of approximately 500 people”. This Vision Fund certainly has bad luck with the Wirecard scandal developing. Yet, it is important to note that the company has some wins; companies like Nvidia and Ping An are good bets.

I received a Royal Mail from the United Kingdom today. It was sent from the Companies House, the government agency that manages things relating to companies, including Directors. With this inscription on the envelope, “On Her Majesty’s Service”, I knew it was it.

A few months ago, a really wealthy man invited me to join the Board of his company. Then in my village boy mentality, I asked him to also give me shares in the company. Amazingly, he did.

Today, the UK government wrote to me, informing me. I always pray, “Oh Lord, my hands are raised up for your blessing. As the angels go on assignments to bless, make them see my hands”. This season, He did.

Your own will come…keep working hard.

As far back as 2002, in Diamond Bank’s intranet, a quote welcomed all staff into the system. It was from a speech which Diamond Bank Founder, Pascal Dozie, had delivered on trade, banking and regional integration. He postulated the implication of a single currency and why Diamond Bank must pursue a regional growth in ECOWAS. He used the phrase, “a name, possibly Eco” to describe the potential currency with a supranational bank within the region. Diamond Bank was setting up the Benin Republic branch then.

Single currency has many advantages, on trade, but in heterogeneous markets, there is a huge risk of welfare losses. Typically, when nations lose autonomy to devalue their currencies to adjust equilibrium in international markets, a currency region could be subjected to the vagaries of the most dominant economies in the bloc. 

So, in ECOWAS, if crude oil price drops, Nigeria typically devalues its currency to re-calibrate, but under a single currency, it would lose that ability since the Central Bank of Nigeria would not be controlling the regional currency which would be under the control of a supranational bank. But if the paralysis becomes acute and the regional bank devalues, say Eco, some countries like Gambia and Benin Republic have been impacted instead of just Nigeria.

This explains why President Buhari’s statement to some ECOWAS countries which are trying to play a huge game, flipping CFA Franc as Eco, leaving some countries out, is important. Eco is never new, going back to Mr Dozie’s writing. But when a small bloc, UEMOA, tries to take over it, it makes the whole process harder. You cannot just hijack something everyone has been working for decades and expect others to party.

‘‘We have urged our Ministers towards an expeditious path to success. It, therefore, gives me an uneasy feeling that the UEMOA Zone now wishes to take up the Eco in replacement for its CFA Franc ahead of the rest of the Member States.

‘‘This is in addition to deviating from the Community Act on a consistent attainment of convergence in the three years running up to the introduction of the currency, and our subsequent reinforcing directives.

‘‘I am informed that the French Ministers have approved a bill to reform the CFA Franc and most, if not all of the UEMOA Member States, have already passed legislations in their various Parliaments to that effect.

[…]

‘‘We must proceed with caution and comply with the agreed process of reaching our collective goal while treating each other with utmost respect. Without these, our ambitions for a strategic Monetary Union as an ECOWAS bloc could very well be in serious jeopardy,’’ he said.

As I wrote for the African Heads of State during an African Union Congress, the trajectory must be prior convergence of regional economies before a single African currency. What UEMOA is doing right now will make it challenging in ECOWAS. I hope they play with caution and allow a natural attainment of convergence to happen. 

Yesterday, Lekan Akande Olokunde, FCA shared a page summary for Innovation Lessons (5in5), one of the 3 sub-themes in our Week 1 of Tekedia Institute Mini-MBA. Week 1 is focusing on Innovation & Growth with three faculty handling each of the 3 sub-themes. He has studied the 2.5 hours of video and summarized the message in a page. For our very busy members, this would be helpful.

Also, he also created an amazing calendar for our schedules; that would go to the Board later today. We would be sharing his page summary also.

Please if you do have yours (summary, analysis, etc), share with Admin for the community. Let’s co-learn and co-share. I understand the MVQ has resonated well.

We continue to welcome the World; REGISTER.

https://www.tekedia.com/mini-mba-2/

Good People, we have received many requests for permission to use Tekedia Mini-MBA to set up social media groups as our community members work on Challenge Assignments and discuss projects within the Community Circle. This is to note that such is expected as it is within fair use of the brand. I have seen the WhatsApp group in the Discussion area of Week 1,  which focuses on discussing the lectures. Certainly, we cannot join all but feel free to reach out to Admin anytime you think you need support.

Go ahead and form your communities: no need to seek any permission.