Author Archives: bankelele

About bankelele

Writing on banking, finance and investments in East Africa. Email bankelele_at_hotmail.com, Instagram: Bankelele, Twitter: @Bankelele.

Getting Paid for e-commerce in Africa

When it comes to support, from PayPal’s perspective, your value is worthless. PayPal is a terrible company to deal with; they will withhold money for quasi-fraudulent reasons, that have long been suspected to be pools that are linked to high interest-earning fixed deposit accounts or something along that line. When they withhold your money, they are actually playing monopoly with your money, and the reasons are always obscure. Your account will be shut down for even more obscure reasons.

PayPal deleted this tweet

PayPal never points to a specific issue, and since they are a near-monopoly, they are above the law, and you, in a third-world country, can only wait and pray. PayPal can act with impunity and there are no mechanisms for third-world individuals to hold PayPal accountable, and they know this, so it’s not implausible for them to take advantage. They do.

Stripe on the other hand is the king of double standards. When it comes to engagements with Westerners, Stripe is your friend through and through, but the minute you, a third-world resident, control a USA entity, the double standards come out. You can’t do certain things that other Western companies are free to do, and if you have a chargeback as a foreign-held entity, Stripe will hold and eventually shut down your account because it is deemed as high risk, even though you or your company might be a target of fraud.

Again, Stripe takes advantage of the lack of accountability. If you acquire Stripe through a 3rd party like Shopify or Woocommerce, then you will NEVER get your account approved, regardless of however clean and legitimate your paperwork is. They will always say their risk department is assessing your paperwork, and if that goes past 3 months, you will almost certainly give up. They want that. However, the double standard is worse, since Stripe is financing Westerners to come build fintech in Africa (e.g. Wave).

As for Flutterwave, it is a better experience. You are treated like an actual human being. You talk to people who speak your language, understand your problems, help you solve them and treat you like an actual human being. You have an actual telephone number you can use and talk to someone who will actually be concerned and help you overcome your hurdles. Flutterwave makes you feel like you belong, and it might be business at the end of the day, but it’s how it’s supposed to be done. With empathy!

Comment by a company founder who moved to Flutterwave.

Why African firms list at London

“Fundraising via small cap IPO” was the title of a webinar last week, that was hosted by Jonathan Nelson of HF Capital and which featured Gokul Mani and Ope Sule, both of the London Stock Exchange (LSE).

In nine months of 2021, London has had 81 IPO deals that have raised $20 billion. It is one of the top 3 global exchanges after the USA and Hong Kong, but London is the largest international market (of the 2,000 listed firms, 700 are not from the UK), while the others mainly comprise local firms. 

There are 160 African firms on the LSE and these include Airtel Africa,  VivoJumia and Acorn.

Why list at London?

  • Firms will get the right price: With $100 million assets, a company can raise $35-40 million
  • A listing makes it easier to raise more money; when a company is private it can spend 6 months raising money. But once listed on the LSE, it can raise $30-40 million overnight 
  • 30% of LSE firms are listed on 2 or 3 other exchanges.  London partners with Nigeria and South Africa exchanges so if a company lists in London, it doesn’t have to provide too much additional information to list on South Africa with a bit more in Nigeria.  
  • To list at London, a company should be valued at about $50-70 million for the Aim board and $150-200 million for the Main one. 
  • Compare this to the US where a company needs to aim for a $5 billion valuation. If this is lower than $3-4 billion, the US is not for them, but London will give that investor appetite. 
  • London is primarily institutional and by fundraising there, companies are dealing with professional money managers while China is mainly retail (45-50%)  as well as the US (30-45%), London retail is 10-12%.
  • London can value technology firms, unlike (African) local markets – and most of the technology firms raising money this year are loss-making, but the market can still price them.

What firms will need to do? 

  • It costs a lot to raise money in terms of the time to meet investors and do roadshows. 
  • To raise $10-20 million, the fundraising cost is 5-6%, but for a larger target of $100 million, it would be 2.5-3.5%. 
  • Firms are advised to hire a public relations (PR) as well as investor relations (IR) firms that are based in London – spending $200,000 a year for these.

Real Estate Moment: Property Management Tools in Nairobi

Everyone is a member of a housing estate in Nairobi, from Spring Valley to Kibera and other neighbourhoods above and beyond. They all have to deal with things like security, service charges and garbage collection, to others like painting common areas, noise & smoke disturbances and shared parking spaces.

How do residents manage? Often it takes a few keen dedicated people, usually long-term residents in the area, who volunteer their time to marshal and organize the other residents who are largely passengers. They spend a lot of time organizing and resolving matters and chasing and collecting monthly payments from their fellow residents.

What tools can they use to help in these time-consuming and unwelcome but necessary tasks? I put up a query on Twitter and these are the top ones shared back, in no particular order.

  • Verus Africa: Their platform is the only one that is cloud-based and caters for residential as well as commercial real estate management. (Ok. They are also my relatives😂).
  • Try Smartkodi (how it works video here) .. SmartKodi is an all-in-one property management software that does everything from lease management, automated rent invoicing and receipting, utilities tracking and management, a comprehensive accounting system and so much more! Talk to us.
  • We built Gated specifically for estate management.
  • @kodipoint at @tenzilabs we are piloting a similar product.
  • Check out RentPay.
  • Nyumbani – talk to us.
  • Sapama.
  • Check out Safaricom bill manager.
  • Check out Kodisher by @mwangisk (who) can give more details about it.
  • KCB Group have a property management portal as well.

Ghana connects to America with a Museum

A world-class museum will be built in Ghana to grow connections with African-Americans seeking to better understand their heritage. This came after Ghana’s President Nana Akufo-Addo attended a signing ceremony between the W. E. B. Du Bois Museum Foundation and the Government of Ghana, in New York this week.

Dr. William Edward Du Bois, an author and civil rights pioneer was a friend of Ghana’s first President Kwame Nkrumah. He moved to Accra, where he is buried, and a memorial centre was opened in 1985. The museum trustees have decided to expand the site into a complex or living museum for scholars that will be designed by Ghanaian architect Sir David Adjaye. It will contain a museum, library with Du Bois’ writings and collections spanning 50 years, an auditorium, and guest house while the bungalow where Du Bois lived will be refurnished. The goal is to make Ghana the hub of pan-African research and heritage tourism

Ghana has a special connection with African-Americans who seek ways to reintegrate with or reconnect with Africa, the continent from which their ancestors descended.  12% of visitors to Ghana were from the USA and the country aims to be the preferred West African designation for North America, through heritage tours, and “back to Africa” promotions. .

Ghana dubbed 2019 the “year of return” to mark the 400th anniversary of slaves arriving in the USA. The theme of the campaign has now extended to “beyond the year of return” to encourage people in the diaspora to come and live or invest in Africa. 

KQ & DRC

This was a significant week for Kenya Airways and its regional flight partnerships. Their JamboJet subsidiary started flights to Goma, in the eastern part of the Democratic Republic of Congo (DRC). JamboJet also resumed flights to Lamu on Kenya’s coast after four years.

Then Kenya Airways handed over two Embraer 190’s in a wet-lease to state-owned Congo Airways. This means it will be operated by Kenya Airways staff. The airline also launched a direct cargo flight between Lubumbashi and Johannesburg South Africa

In November 2020, KQ launched a Southern Africa cargo service, operating freighter flights from Johannesburg to Dar es Salaam (Tanzania), Harare (Zimbabwe) Lilongwe (Malawi) Lusaka (Zambia) and Maputo (Mozambique) Previously all freighter flights would have to operate through Nairobi.

The cargo business is still low but its significance will grow as passengers traffic is not expected to pick up for at least another year. Now Lubumbashi has been added to the KQ Southern Africa cargo network.