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A predictable about-face
A.k.a the problem with being a hardliner
It’s the first Sunday newsletter of the year. Here’s to many more. Happy birthday to Eric, one of the earliest members of the Notadeepdive community. Give him a shout on Twitter @daviruz
If you missed Friday’s newsletter, catch up here. Share today’s post:
Today’s Notadeepdive is 640 words and is brought to you by Fincra and Native Teams.
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Emefiele backpedals in a familiar about-face.
Throughout last week, Godwin Emefiele made a lot of tough talk about Nigeria's currency swap and the inflexibility of the January 31 deadline. It was a familiar stance from a CBN that often starts talking big only to back down. The most recent example is the restrictions on cash withdrawal over the counter that the CBN eventually walked back. On Friday, here's what I said in the newsletter:
"What will happen to POS agents holding all of that old cash, and who can't get the new ones from banks? I predict that the CBN will extend the deadline and that Emefiele is only playing hardball as he often does before letting reason prevail."
Today, the CBN also relaxed its position on exchanging old notes for new ones, announcing a new deadline of February 10. The more important lesson for me is how the bank can improve its communication and refuse the temptation of using policy to "force" people to do things. It's familiar in all of our policy positions: restricting FX access for importers looking to bring in some products, closing the borders to encourage local productions, and in Lagos, impounding cars when motorists are found guilty of driving against traffic. High-handed as these measures always are, they never work. The big policy lesson is to provide incentives for good behavior as opposed to trying to give only big disincentives.
That said, let's move on!
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Gig workers in Nigeria are moving closer to speaking with one voice
Uber and Bolt drivers have protested against both mobility companies over the years. Many of these complaints are global issues and show that gig work, especially for these companies, has inherent problems that will eventually need comprehensive solutions. The early price wars between Uber and Bolt made had only one winner: the customers. Drivers had to deal with lower earnings as inflation worsened, and it became natural to question their working conditions.
In London, the Supreme Court ruled that drivers were workers entitled to minimum wage and paid holidays. On the African continent, protests happened every now and then over low earnings. However, getting drivers to agree and adhere to decisions was difficult. In 2021, I covered the planned strike action by Uber and Bolt drivers. Here's what I said at the time:
"One of the ways they have competed is with pricing, with each operator giving promos and lowering fares to try to win over new customers. Yet, over the years, there have been claims that the pricing wars came at the expense of drivers.
Now Uber and Bolt drivers in Nigeria want the pricing to be reviewed because the prices no longer reflect the costs they put in. They also want both companies to reduce the commission on rides from 25% to 10%."
In the year since that report, economic conditions have worsened, increasing sharp practices from drivers. This Rest of World report mentions "economic expediency" as one of the reasons why Bolt drivers were selling their accounts and potentially putting passengers at risk. Bolt responded to the piece as ride-hailing companies often do, with statements that don't really say much.
But there's some hope for drivers that this may change with the registration of the Amalgamated Union of App-Based Transport Workers of Nigeria (AUATWN) as a trade union. While the Professional E-hailing Drivers and Partners Association (PEDPA) has existed as an association before now, the AUATWN trade union will give drivers a firmer stance in the negotiations with ride-hailing companies. It's early days, but I can't wait to see how the discussions play out as inflation and macroeconomic conditions worsen.
See you on Sunday and you can catch up with this article I wrote on Saturday here.