Thanks to the 140 people who joined us this week!
What a fun one-month it's been!
Sometimes, starting things can be nerve-racking, even if you're fairly certain about what you're trying to achieve. So when I had the idea to start writing a newsletter some eight or nine weeks ago, it was with uncertainty. That's why it's fascinating that writing this every Friday and Sunday now feels like second nature.
All of this is to announce that Notadeepdive is now one month old. It's been four weeks of sharing, and hearing back from you about how awesome this newsletter is - except for that one person that yabbed me in the comments 😑
Notadeepdive has now been viewed over 11,000 times - group hug people. If you've ever shared our newsletter or told people about it, bring it in 🫂. Friday's newsletter was shared 38 times, a Notadeepdive record.
While we didn't hit our target of 1,000 subscribers, we came mighty close - not a lot of newsletters get anywhere near 800 subscribers in month one. In my head, I'm singing, "we are family, I got all my people with me!" 🕺🏿
In month two, I'm remaining as ambitious, with the goal of reaching 2,000 subscribers. If you haven't already subscribed, make sure to fix that - we're fun, I swear. Plus, our 1,000th subscriber still gets some cool merch that I'm chuffed about!
And if you have, please share this newsletter - let's hit a new record of 200 shares. Deal?
That said, it's going to be a pretty short newsletter today.
"Avoid clichés like a plague"
When a phrase or opinion is overused, it loses its meaning. A brilliant example is this article that calls out the Financial Times for consistently using the description, "the poorest nation in the Americas" every time it mentioned Haiti. Clichés don't even have to be inaccurate to be boring, because surely, there has to be more to Haiti than poverty. In Nigeria, writers are slowly developing a set of clichés when they write reports on technology and business in international publications.
Some common clichés speak to low internet penetration, regulators destroying businesses with bad policies and yes, you guessed it, poverty. This is what Abubakar and I are discussing while we're having drinks at one of those Lagos bars where they claim to have a view but all you really can see is traffic. There is an excellent takedown of two such articles like here, so I'm not going down that rabbit hole. Instead, let's talk about one common theme on some of these articles - the need to frame regulators as evil institutions that destroy startups. To be clear, policies are sometimes destructive - I'm looking at you, Okada ban in Lagos.
But there's a lot to be said about how regulation has been progressive in Nigeria and how it has helped grow certain sectors. For example, this year, the Central Bank passed the draft of Open Banking regulations, making it the first country in Africa to do so. We have also seen regulations on crowdfunding, and digital investment apps. While regulation is not the most interesting topic, it protects people from losing their money or being exploited by companies. Can we evaluate regulation on a case by case basis instead of these broad brush strokes?
Other clichés are about Nigeria's low internet and smartphone penetration. But very little is being said about how more Nigerians are using 4G and the internet as a whole. Airtel's recent Q2 financial report shows a jump in the average data used per user and MTN also reports on how more people are using its 4G network. So, maybe we can stop relying on these tropes and create more nuance?
I gotta tell you, I'm just as surprised as you that I'm defending Nigerian regulators. But here's the thing, regulation has made companies competitive. We went from paying N50 per minute for calls to not caring how much calls cost. In banking, regulation has been positive, especially for fintechs. Now, banks are changing their structure so they can compete in payments. No matter how you slice and dice it, customers are the real winners.
While we're talking about networks and telcos, let's talk about Airtel and it's huge plans for mobile money.
Airtel Africa is raising money again for mobile money
For the third time this year, Airtel Africa is raising money for its mobile money arm, which is now a separate business. In April, it raised $300 million for the business by selling off some part of the stake in the company. It has now announced another $200 million investment.
The recent raise won't affect Airtel Money's $2.65 billion valuation, but it will help the company grow a segment of the business which is important for the future. Per their second quarter 2021 report, revenue from mobile money was up by over 50%, so there is something here for the company.
That's all there is to know there. Now let's return to regular service of criticizing regulators.
Sorry CBN, an app won't solve a demand and supply problem
On Friday, a CBN circular asked banks to develop apps specifically to help customers request forex. It's the Central Bank's follow-up effort to ensure Ed that banks become the primary source of getting foreign exchange, after it stopped the sale of $$ to BDCs.
Because a similar move failed in 2016, the CBN is trying to run a tighter ship and even said that customers should call a hotline if they don't get $$ from their banks. Yet, the real problem is that the bank is trying to wrestle basic laws of demand and supply, and it is unlikely to end well.
You still can’t get $$ for items on the banned list at the banks, so the BDCs will continue to fill that need. That means you can bet your last penny that they will find a way to buy the FX that the banks are holding.
The bottom line: I know we say technology is changing the world, but it won't solve this problem. Shall we revisit this in 2022?
Moves around Mobile Money will become more common IMHO. MTN Rwanda created its own Mobile Money subsidiary last May... It's smart for these Telcos to enter the Payment-as-a-Service, means they (still) have a vision...
Thank you for your excellent newsletter, I want to ask for your opinion on the effect of stable crypto coins like USDC on BDC operations. At this rate, anybody with a smartphone that understands cryptocurrencies can become a one-man BDC particular as USDC can be "wired" to dollar accounts around the world.
Do you think current BDCs will seek to use more crypto stable coins in their operations?