Category Archives: Kenya ICT

Airtel Africa – London prospectus peek

By the end of the week Airtel Africa will have a dual listing at the London Stock Exchange with a secondary one in Lagos after raising $750 million, by offering new shares to investors at 80 pence per share in June 2019, and valuing the company at £3.1 billion (~$3.9 billion).

The goal of the listing was to reduce the debt of the company further after it had earlier raised $1.25 billion from six global investors including Softbank, Warburg Pincus and Temasek in October 2018.

A peek at the 380-page prospectus and other listing documents:

About Airtel Africa: As at 31 December 2018, the Group was the second largest mobile operator in Africa, by the number of active subscribers(according to Ovum); they had 99 million mobile voice customer and 30 million mobile data one and 14.2 million mobile money customers.

Performance: For the financial year 2019 they had $3.01 billion revenue with 1.1 billion from Eastern Africa, $1.1 billion from Nigeria and $900 million from the rest of Africa. Of the total revenue, $2.9 billion was from mobile services with $167m from mobile money. Eastern Africa is Kenya, Uganda, Rwanda, Tanzania, Malawi and Zambia, and the rest of Africa comprises operations in Niger, Gabon, Chad, Congo, DRC, Madagascar and Seychelles. The company had a pre-tax profit of $272 million compared to a loss before tax of $9 million in 2018.

Managers & Employees: The Company has ten non-executive directors (including the Chairman). Also, Raghunath Mandava and Jaideep Paul will serve as chief executive officer and chief financial officer of the Group from their operational head office for Africa based in Nairobi. They will be enrolled in a company long-term incentive (share option) plan along with other executives of the Group.

Shareholders: Prior to the listing, top shareholders were AAML – a subsidiary of Bharti Airtel (68.31%), Warburg Pincus (7.65%) Singapore Telecom (Singtel 5.46%), ICIL – a Bharti Mittal family group (5.46%),  Hero (owned by Sunil Kant Munjal – 4.37%) and the Qatar Investment Authority (QIA) with 4.37%.

After the listing, in which the company will have sold between 14% and 18.9%%, the top shareholders will be AAML (56.12%), Warburg Pincus (6.28%) Singtel (4.49%), ICIL (4.49%),  Hero (3.59%) and QIA with 3.59%).  Also, subject to completion of a merger deal in Kenya, Telkom Kenya may acquire up to 4.99% if they exercise a flip-up right.

Other: 

  • Results for the (London) global and Nigeria uptake were announced on 28 June, and share accounts of new investors will be credited from July 3 and listed in London that day, and in Nigeria on July 4. 
  • Like other telco’s in Africa, 96% of their customers are prepaid. ARPU was $2.72 per user in 2019, down from $3 in 2018 and $3.24 in 2017.
  • Airtel has two distinct strategies; where they are market leaders (e.g in Chad), they price closely to market rates and where they are seeking market leadership (e.g in Kenya), they prioritize affordability.
  • Other Financing: In May 2019, the Company arranged for a “New Airtel Africa Facility” bank facility with Standard Chartered.
  • Other Deals: Ongoing settlement discussions in Tanzania, one over a tax claim, will see all cases withdrawn and boost the Government’s shareholding to 49% at no cost. In Kenya, they are merging with Telkom Kenya and in Rwanda, they are acquiring Tigo.
  • Listing Fees: The company will pay the fees and expenses for the listing totalling $35 million for the UK admission – and these include FCA fees, bank’ commissions, professional fees, costs of printing and distribution of documents.  The joint global co-ordinators and joint bookrunners were  J.P. Morgan Cazenove and Citigroup, joint bookrunners were Absa, Barclays, BNP Paribas, Goldman Sachs, HSBC, Standard Bank, the Nigerian joint issuing houses were Barclays Securities Nigeria and  Quantum Zenith Capital, while the public relations advisor was Kekst CNC.

About Airtel in Kenya:

  • Airtel is the second-largest telco in Kenya with 13.1 million subscribers and market share of 28%.
  • Telkom Kenya is expected to acquire a shareholding of 32% in Airtel Kenya in an ongoing business transfer deal. 
  • The company is working with Kenya’s Central Bank to reverse a negative (Kshs -2.7 billion) capital position as a requirement to be part of the national payment system. They expected to lose another Kshs 1.2 billion this year.
  • Airtel has proposed to separate the mobile money business from the telecommunication one and fund the new one with shareholder loans. They had committed to recapitalize the company by Kshs 3.85 billion ($38 million) by August 2019.

Stanchart opens eXellerator Lab in Nairobi

Standard Chartered Bank today announced the opening of an innovation lab in Nairobi, its first in Africa.  Run by Standard Chartered Ventures (SC ventures), the eXellerator lab will work with clients, staff, and local fintech companies on banking solutions for the future. This will be the fifth such lab after the first in Singapore, then Hong Kong, San Francisco, Bangalore, London and now Nairobi.

Stanchart Kenya CEO Ngari Kariuki CEO said that SC ventures, launched in March 2018, had a mission to invest in disruption and come up with new business models by partnering with fintechs in Asia, Middle East And Africa, scaling little ideas, giving them a global platform and investing in the companies. Kennedy Mubita the Africa Regional Head for SC Ventures said that the eXellerator was based on principles of human-centred, design, having a lean startup mentality, embracing an entrepreneurial spirit  (enabling staff of the bank to suggest ideas and develop them into products with rewards) and that the bank would also invest in local companies through a $100 million innovation fund. So far they are developing ten ventures drawn from 1,500 ideas submitted globally, with a notable one being Credit Card Buddy from Indonesia.

At a Q&A after the launch, It was queried what pipeline of projects Stanchart would target given that there were very few companies able to absorb series B funding here. The bank will have a country venture challenge, one of three in Africa, and will seek to work with companies to address payment gaps and trust gaps in value chains across all sectors.

Like with the video banking launch, tried and tested in Asia, Nairobi is the launchpad for the eXellerator lab program in Africa. Other banks with innovation labs in Nairobi include KCB with its Vooma Lab and I&M bank, which has a digital factory, called iCube.

Rewiring Education

This week, the M-Pesa Foundation Academy and Nairobi International School hosted author John Couch, who was first Vice President of Apple Inc., for a talk session on “rewiring education.” The chief guest was Kenya’s Cabinet Secretary for ICT, Joe Mucheru. 

Rewiring Education speakers.

Excerpts from the rewiring education Q&A: 

  • Kids come into employment fully trained in things that are no longer relevant. They then have to unlearn that, and we are working with universities to modernize the curriculum.
  • Schools have to hire teachers who are registered with the Teachers Service Commission. But those who are there only have B.Ed (Bachelor of Education degrees), and lack skills to stand in front of students who are far ahead of them in technical knowledge.
  • The Kenya government has developed a brilliant curriculum, that will start next year, but teachers have not been trained to deliver this. International schools take three years to retrain a teacher.
  • The median age in Kenya is 19 years, and half the civil service is made up of teachers.
  • The most important skill to have in life is (to embrace) continuous learning.
  • Schools can currently evaluate student memorization, but not their creativity and innovation abilities.
  • “When I was studying at Berkeley, California in the 1970’s, people thought the social revolution was taking place in the streets, but I knew it was taking place inside computers.”
  • Safaricom set out to provide connectivity to all schools in Kenya and the government was to provide the devices.
  • “The way we are teaching kids is a disservice and I am in the process of suing the UK government for wasting thirteen years of my life!”
  • The US also treats teachers as a union problem, not a professional occupation. Teachers are underpaid and under-trained.

KPMG on the 2018 Finance Bill Amendments

The President of Kenya signed the Finance Bill 2018 after a stormy debate in Parliament last week that saw chaotic arguments about vote procedure methods used and actual vote counting mainly with regards to VAT on petrol products.

Some of the earlier clauses in the Finance Bill had been highlighted and KPMG, which has done a series of articles,  has provided a further update on aspects of the laws in Kenya and which they termed “..the changes present an unprecedented disruption of the tax regime that will impact the economy and citizenry for years to come.

Their perspective on the signed Finance Bill implications:

  • Excise duty on services: The President accepted Parliament’s decision to drop a Robin Hood tax of 0.05% on money transfers above Kshs 500,000 (~$5,000). But the shortfall was replaced by an increase in taxes on all telephone and internet data services, fees on mobile money transfers, and all other fees charged by financial institutions which all now go up by 50% – and which KPMG writes may have a negative impact on financial inclusion.
  • A national housing development levy was approved. With the country’s wage bill of Kshs 1.6 trillion, KPMG estimates that government can potentially collect Kshs 48 billion a year (~$480 million) from the levy, (Kshs 24 billion of which will be from employers) – a massive amount when compared to the Kshs 12.8 billion that NSSF – the National Social Security Fund collects in a year. Regulations for the National Housing Development Levy Fund (NHDF) have not been set, other than that the payments are due by the 9th of the following month. For employees who qualify for affordable housing, they can use that to offset housing costs but for those who don’t qualify, they will get a portion of their contributions back after 15 years.
  • Petroleum VAT: KPMG says that a significant portion of the government’s tax targets for 2018/19 was dependent on value-added tax (VAT) on petroleum products and that is why they have been insistent on having this implemented. Sectors that supply exempt services such as passenger transport (PSV’) and agriculture producers are expected to raise their charges to customers as they are unable to claim back the 8% VAT tax.
  • Kerosene, which is used by low-cost households, takes a double hit with the introduction of VAT as well as an anti-adulteration tax of Kshs 18 per litre. Already kerosene now costs more than diesel in some towns around the country.

  • Excise duty on sugar confectionery, while opposed by sugar industry groups, was reinstated in a move similar to other countries that are trying to address lifestyle diseases by introducing taxes on sugar products.
  • The betting industry, whose survival which was at stake, gets a reprieve as the gaming and lotteries taxes, introduced on January 1, were reduced from 35% to 15%. Many of the prominent betting companies had scaled back their advertising and sponsorship and had turned to engage in serious lobbying efforts ever since. Also, an effective 20% tax on winnings has now been introduced. The earlier tax law allowed bettors to claim some deductions if they kept records, but that has been removed altogether.

Idea Exchange: Food, Fellowship, Counties, Army Worm, Film, Sports, AI, Oil Opportunities

New, and ongoing, opportunities to apply for.

UNCTAD: United Nations Conference on Trade and Development, jointly with Jack Ma, founder and executive chairman of the Alibaba Group, have the eFounders Initiative aims to help bridge the digital divide faced by young entrepreneurs in developing countries and allow them to grasp the opportunities of e-commerce ecosystems.  This capacity building programme to empower 1, 000 e-commerce entrepreneurs from developing countries over a period of five years to become catalysts and the next course will focus on African entrepreneurs from Algeria, Egypt, Kenya, Morocco, Namibia, Nigeria, Rwanda, South Africa and Uganda and will take place at the campus of the Alibaba Business School in Hangzhou, China from 19 to 29 June 2018. Application Deadline: 4 May 2018
Earth Journalism Network: Climate Change Media Partnership 2018 Reporting Fellowships Apply to report from both the Global Climate Action Summit in San Francisco and the UN Climate Negotiations in Katowice, Poland.

The Africa Food Prize is the preeminent award for recognizing the extraordinary individual or institution whose contributions to African agriculture are forging a new era of sustainable food security and economic opportunity for all Africans.  The deadline for nominations for the USD 100,000 prize is Tuesday 15 May and the 2018 winner will be unveiled at a high-profile gala dinner at the African Green Revolution Forum (AGRF) 2018 this September in Kigali, Rwanda.

African Food Security Prize Launched to Stop Devastating Crop Pest: Feed the Future, supported by Land O’Lakes International Development and the Foundation for Food and Agriculture Research, has opened its call for applications for the Fall Armyworm Tech Prize that offers to fund up to $400,000 in digital solutions that aim to help stop the spread of fall armyworm in Africa-a pest that is devastating agriculture and demolishing billions of dollars’ worth of crops across the continent. The application deadline is 14 May 2018 and applications may involve a range of digital solutions and must demonstrate how the proposed tool(s) will help smallholder farmers and those that reach them, such as extension agents, monitor, identify, treat or report the incidence of fall armyworm.

Africa Innovation Summit II: A call for application has been launched across Africa for innovations addressing the continent’s challenges – which include energy access, water, food insecurity, health systems, and governance. Applications close on 15 April.

The 2018 African Union Research Grant offers up to $9 million of funding. The deadline for applications is May 22 The call supports research on food, nutrition security and sustainable agriculture (FNSSA).

Andela Kenya, Uganda, Nigeria Fellowships:  The recruitment Schedule for Andela Kenya fellowship cycle 29, and Andela Nigeria, cycle 33 deadline is May, while for the Andela Uganda fellowship cycle 9 and boot camp, the deadline is April 27.

Anzisha Prize: Aims to find a young entrepreneur who is making a difference in their community,  aged 15- 22 so that they can have the chance to win a shared amount of US$100 000 and become an Anzisha fellow. The deadline is 15 April.

Asoko, in a new collaboration with the London Stock Exchange Group, PwC and CDC Group is seeking Africa’s leading private companies – companies to Inspire Africa for a leading report showcasing Africa’s 1,000 most dynamic private, high-growth companies. Deadline is June 11.

BAKE Awards 2018: The nominees of the Bloggers Association of Kenya (BAKE) Awards 2018, that recognizes and awards the best in Kenyan blogging have been announced  in categories including Technology, Photography, Creative Writing, Best Business Blog, Food , Environmental , Fashion & Style, Agricultural, Best New Blog, Corporate Blog, Sports, Entertainment, Education, Travel, Public Health, County Blog, Religious or Spirituality , Lifestyle, Beauty & Hair, Best Video Blog (Vlog), Social Issues & Active Citizenship, and Kenyan Blog of the Year. Voting for the winners is now on, up to 30 April.

The BMCE Bank of Africa – African Entrepreneurship Award 2018 has $1 million of prizes and a trip to Morocco for entries in categories of innovation or sports entrepreneurship. Deadline is  April 30, and more details here.

Chatham House invite applicants for the Academy Africa Fellowship in the Queen Elizabeth II Academy for Leadership in International Affairs in research topics for 2018-19 of
new technologies and their impact on international security (with a focus on artificial intelligence or space), the geo-economics of technology, climate-resilient development ( managing energy transition in a low-income context) and the rising burden of non-communicable diseases (NCD’s) in Africa. The deadline for applications is 29 April.

DEMO Africa 2018: DEMO Africa is a launch pad for emerging technology and trends, attracting over 2000 people from around the globe to experience the finest African innovations. The top five startups from DEMO Africa will be sponsored to Silicon Valley for an all-expense paid trip to be part of the Lions@frica Innovation Tour. Now accepting startup applications until June 15.

EDiT Research Fellows in Applied Development Finance: The Global Development Network (GDN) and the European Investment Bank (EIB) have partnered to create the ambitious EIB-GDN Program in Applied Development Finance for deepening understanding of EIB’s investment operations in African, Caribbean and Pacific (ACP) countries. Under this partnership, GDN and EIB will identify, train and deploy teams of research professionals in the ACP regions to conduct “deep dive” studies of selected projects funded under EIB’s Impact Financing Envelope (IFE).

Kenyan winners from the Tony Elumelu Foundation announced earlier this year

Fourth Mining 4i: The Strathmore Extractives Industry Centre (SEIC), in collaboration with the Kipya (Africa) Limited and Extractives Baraza, hosts the Fourth Mining 4i, an annual invite-only forum which focuses on the promotion of Kenya’s mineral potential by attracting investment in technological innovation.

Google Africa Scholarship Program:  Web and Android Scholarships available for residents of African countries. Some scholarship recipients may be able to participate in an Andela Learning Community with our partners from Andela. Finally, top students from each track will earn full scholarships to one of our Android or Web Development Nanodegree programs. Applications due by April 24.

Kalasha Kenya: Submit your entries for the #MyKenyaMyStory competition for a chance to walk away with grand prizes worth Kshs 500,000 Check poster for more details.

The Competition Authority of Kenya #CAKuzaAwards2018 is celebrating excellence in Kenyan Broadcasting. Vote for your favorite TV and Radio Station, by sending the word KUZA to 15601. Voting is free.

Merck Accelerator Nairobi Satellite Program: In partnership with Mettā, Nairobi, Merck Accelerator’s satellite program in Nairobi is seeking early-stage startups with no more than 4 years in existence, startups in the fields of Healthcare, Life Sciences, Performance Materials and other search fields such as Biosensing and Interfaces, and Precision Farming. For startups based in East Africa, Nairobi Applications are open to May 5, 2018, and founders that are available are to attend a boot camp on May 15-18 in Nairobi, Kenya, if selected.

MEST Africa Challenge 2018: MEST is celebrating 10 years of supporting aspiring African entrepreneurs with a first Pan-African pitch competition, the MEST Africa Challenge. MEST Africa Challenge 2018 will give winning applicants the chance to meet and pitch to leading investors, corporate and ecosystem partners from Africa and beyond, at the finals in Cape Town. The trip will be fully funded. The winning entrepreneurs could receive, as much as, sh.5,000,000 ($50,000) in equity investment and space in one of MEST’s incubators. Companies that apply must be primarily tech-focused. Details here and the deadline for applications is April 22.

Microsoft Imagine Cup 2018: Microsoft has announced this year’s Imagine Cup, the students’ developer technology and innovation competition that will see winners walk with $100, 000 in prizes. Imagine Cup participants create or join a team of up to 3 students. Together, they make an original technology project from start to finish: come up with a great idea, make a plan, build a project, and submit. This year’s Imagine Cup has three special awards that represent the current state of digital transformation: Artificial Intelligence, Big Data, and Mixed Reality.

Norwegian Accelerator, Pangea, a platform connecting African startups with international investment & expertise, has shortlisted 11 start-ups who will be considered for funding of up to 50,000 USD per startup. The 11 start-ups companies are drawn from Kenya-9, Egypt -1 and Nigeria-1. Pangea plans to launch a crowd investment platform in June 2018, allowing accelerated startups further access to funding.

The 8th Orange Social Venture Prize for Innovative Startups in Africa and Middle East (50,000 Euros in Prizes) aims to reward the best innovative business projects. Application deadline is May 31, but now no more Kenyan firms are eligible after Orange divested from Kenya.

Pitch AgriHack 2018 for young agriculture entrepreneurs is a competition for agriculture startups owned by young entrepreneurs, with reward being capacity building and access to a grant. It is organized by the Technical Centre for Agricultural and Rural Cooperation (CTA) and the African Development Bank (AfDB). 8 winners will be selected from 2 categories and there will be an additional category to reward a woman-owned, founded or co-founded startup by one of the partnering organizations that made Pitch AgriHack 2018 possible. It is open to e-agriculture startups offering digital services in the agriculture sector. Details here and the deadline is 21 May.

She Leads Africa Accelerator is set to provide training and funding for women-led technology enabled businesses. The 2018 Accelerator will consist of three 1-week residencies in Lagos where entrepreneurs will receive training from the SLA team, business leaders and experts. Applications close on May 20.

Upstream Oil & Gas Awards: The Upstream Awards 2018 is a ceremony to recognize and celebrate outstanding achievements from within the emerging upstream oil and gas industry. Nominations have closed for, among others, nominees for company of the year, drilling contractor, oil field services ​company of the year, upstream CEO, upstream woman of the year award, local community award, local supplier, oil & gas future leader, upstream financier of the year, journalist of the year, legislator of the year, engineering award, life achievement award, and upstream county award.

USAID and Feed the Future have issued an invite to Sub-Saharan Africa women in agribusiness for the Accelerating Women Entrepreneurs Prize 2018. It is open to women helping smallholder farmers increase access to agricultural input (seeds, fertilizer, etc.), technology (ICT, irrigation, etc.), financial and risk management services. Winning applicants will enjoy access to capital to scale and improve their work. Details here and the deadline for applications is 25 April.

Visa will open the first Visa Everywhere Initiative for Sub Saharan Africa to young developers at this year’s Nairobi Tech Week (NTW) taking place from April 19- 21. Developers who win the Visa-led hackathon during the tech week will automatically gain entry into the Visa Everywhere Initiative where they will have an opportunity to compete for a chance to win up to US $50,000, at a regional event in the region.

WTO 2018 Essay Award for Young Economists:  The WTO has issued a call for young economists to submit papers for the 2018 WTO Essay Award. The award aims to promote high-quality research on trade policy and international trade co-operation and to reinforce the relationship between the WTO and the academic community. Essays must be submitted by 1 June 2018, must address issues related to trade policy and international trade co-operation and cannot exceed 15,000 words.

2018 World Travel Awards:  Nominees have been selected and voting for African winners in is open up to 19 August in categories including (*Kenyan nominees in brackets) – Leading Luxury Private Villa (Cottar’s Bush Villa, Maasai Mara) Africa’s Leading Tented Safari Camp(Elephant Pepper Camp Masai Mara, Fairmont Mara Safari Club, Finch Hattons, Mahali Mzuri, Porini Amboseli Camp, Selenkay Conservancy) Africa’s Leading Safari Lodge (Borana Lodge, Kicheche Bush Camp, Loisaba, Ngerende Island Lodge, ol Donyo Lodge, Sirikoi),  Africa’s Leading Meetings & Conference Centre 2018  (The Kenyatta International Conference Centre), Africa’s Leading Serviced Apartments (Cowrie Shell Beach Apartments), Africa’s Leading Private Island Resort (Manda Bay, Rusinga Island Lodge) Africa’s Leading Luxury Hotel Villa (The Cliff Villa, Alfajiri Villas) Africa’s Leading Hotel Residences (Palacina),  Africa’s Leading Hotel (Fairmont Mount Kenya Safari Club, Fairmont The Norfolk Hotel), Africa’s Leading Green Hotel ( Nairobi Serena Hotel, The Aberdare Country Club) Africa’s Leading Family Resort (Fairmont Mount Kenya Safari Club, Leopard Beach Resort & Spa), Africa’s Leading Business Hotel 2018 (Fairmont The Norfolk Hotel, Radisson Blu Hotel, Nairobi Upperhill, Tribe Hotel), Africa’s Leading Boutique Hotel (Giraffe Manor, The Safari Collection,  Hemingways Nairobi, Lion in the Sun)  Africa’s Leading Beach Resort (AfroChic Diani Beach, Almanara Luxury Resort, Swahili Beach, The Majlis), Africa’s Leading All-Inclusive Resort 2018 (Diamonds Dream of Africa) Africa’s Leading Tourist Board 2018 (Kenya Tourism Board) and Africa’s Leading National Park (Masai Mara National Reserve).  

Kenya Airways has been nominated for Africa’s Leading Airline – Business Class, Africa’s Leading Airline – Economy Class, Africa’s Leading Airline, Africa’s Leading Airline Brand 2018 and Leading Inflight Magazine (Msafiri). Also nominated are Fly540 and Jambojet, for Africa’s Leading Low-Cost Airline 2018  and AirKenya, Fly540, Mombasa Air Safari, Safarilink Aviation, Tropic Air for Kenya’s Leading Domestic Safari Carrier 2018.

What other opportunities are there for readers to apply for?