This post is a delayed version of Techpoint summary, a weekly newsletter that summarizes key events in African technology. You can start getting it hours before anyone else if you can.
Today I am discussing:
- CBN’s new regulations for mobile money services in Nigeria
- Flutterwave missed out on tax breaks
- Nigeria’s young population and technology
CBN publishes new regulations for mobile money services in Nigeria
On Friday, July 9th, 2021, the Nigerian Banking Authority, the Central Bank of Nigeria (CBN) released the new framework and guidelines for mobile money services in Nigeria (PDF) as part of their financial inclusion strategy for people with no bank account.
What is the essential? The last time CBN updated these regulations was in 2015 and while they are not that different from the old ones, there are some new introductions.
Very similar Regulations for Payment Service Banks (PSBs), Mobile Money Operators (MMOs) may not grant loans, advances and guarantees (direct or indirect) or accept foreign currency deposits
You can’t get around in the foreign exchange market – with the exception of the sale of foreign currencies from incoming cross-border personal transfers to authorized dealers – accept any electronic value of a closed system (e.g. airtime) as a means of payment or payment or establish a subsidiary.
What’s the bigger picture? The goal of CBN apparently is to improve financial inclusion. As mentioned earlier, when we discussed why payment service banks could face an uphill battle in the Nigerian market, there were minimal changes despite new services like agent banking, the introduction of BVN 2.0 and mobile money transactions.
As of July 4th, 2021 there are 48,762,163 BVN users in Nigeria. For comparison: In August 2020 there were 43.2 million users. For a country aiming for an 80% financial inclusion rate by 2020, these aren’t good numbers, especially given its population of over 200 million
Are these new regulations bringing the wind of change? During the week I will try to figure out this puzzle.
Flutterwave missed out on tax breaks
The Nigeria Investment Promotion Commission (NIPC) has published its report on Income Tax Relief Income Tax Relief Incentive Applications for the first quarter of 2021 (PDF).
The pioneer status is an incentive that grants qualified industries and products tax breaks for three years, which can be extended for a further year or two. It can be complete or partial.
Nigeria’s second unicorn, Flutterwave, was one of ten companies that were denied the incentive. Others include Flour Mills of Nigeria (FMN), Envoy Hotels, Fountain Manufacturing Company Limited, Al-Hamsad Rice Mill Limited, Benchmark Constructions Limited and Super Packaging Limited, Royal Foam Products Nigeria Limited, ENGIE Fenix Nigeria Limited, Technology Solutions Limited and Echostone Development Nigeria Limited.
Per The International Center for Investigative Reporting, Emeka Offor, director of the NIPC’s Strategic Communications Bureau, said some of the firms whose applications were denied could have avoided the situation by following the guidelines of the Industrial Development (Income Tax Relief) Act would have followed.
Speaking of Flutterwave, Offor said, “In the case of Flutterwave, for example, they applied within their third year of operation. Therefore it is time-bound according to the Industrial Development Act. Some other firms whose applications for tax breaks were denied had similar concerns. “
Essentially, Flutterwave’s application was denied because it was not requested on time. That brings all sorts of questions to mind. How many Nigerian startups are aware of such government incentives? And when you know, do you apply? What are the incentives for them?
You already know the exercise. Look out for a story from you later this week.
World Population Day
did you know already that July 11th was World Population Day? Don’t be shy. You probably didn’t. You can shock me and send evidence that you knew. Believe me. I want to see that.
But why do you care? Just hear me out. Currently, Nigeria’s population is estimated to be a whopping 211 million or more. According to the United Nations, from 2017 to 2050 half of the world’s population growth is expected to be concentrated in just nine countries, including Nigeria. Big numbers indeed.
But there is more: According to the UN population projections for 2020, around 62% were under 25 years of age. In contrast, less than 5% are 60 years or older. In essence, the median age in Nigeria is around 18 years old, although it is projected to increase to 21.4 years in 2050
Still wondering why should you care? Nigeria’s young population has been cited as the main draw for digital activities. Is this an opportunity or a problem? If so, can we trust these numbers?
Emmanuel Paul will give a deep insight into this. Come back later today to read this story.
What you missed at Techpoint Africa last week
What I read / watch
- Is it easier for white founders in Africa to get hold of capital? Read
- The inside story of how an ambitious African cryptocurrency startup failed. Read
- Sorry, your cat hated having you at home during the lockdown. Read
- How language shapes our thinking | Lera Boroditsky. Clock
- China has wiped out Jack Ma, and its fintech rivals are next. Read
Have a nice week!
Writer, humanoid, forever her / her, lover of words.
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