Keep your friends close and your developers closer
Keep your friends close and your developers closer
Will Nigerian startups lose any sleep?
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Will Nigerian tech startups lose sleep over Amazon?
If you follow any Nigerian tech startup founder on Twitter, you will have been force-fed some threads about the “talent problem.”
See also: terms like “talent pipeline,” and roforofo fights like “developers shouldn’t hold two jobs. 😡”
Away from the Twitter shenanigans, founders are saying it’s challenging to find talent in Nigeria.
First, there's remote work which is letting more Nigerians find jobs abroad. I’ve read Naira Life articles where the subjects work for companies abroad and earn a ton of money.
Then there’s Japa, which is stealing a lot of talent from the Nigerian market. In 2021, there was an over 300% increase in the number of Nigerians who were granted U.K study visas. While a fair bit of those would have been for bachelor's degrees, you’ll also find that middle-level managers in Nigeria are resigning to go off to start postgraduate degrees. Some HR persons tell me that some senior roles are “notoriously difficult” to fill because some of the best candidates are either abroad or have their bags packed.
What’s all of this backstory about?
Amazon — yep, the Amazon — is hosting a hiring event in Lagos for “Software developer II candidates open to relocating to Canada, Ireland and the United States, to work in Amazon’s Consumer division.” In a market where it’s already difficult to find developers, Amazon is looking to hire mid-level developers, which will undoubtedly put pressure on banks and startups.
If Amazon pulls off this recruitment, it may open the door for other big companies to swoop in for Nigerian talent. So will startups start thinking about talent pipelines now or will they wait another couple of years? A potential pipeline for developers might look like taking a chance on hiring a lot more junior-level developers and having them work on projects with mid to senior-level engineers.
To be clear, there have been numerous conversations on the need for startups to have talent pipelines for devs, but no one has really had the time like that.
Nigerian banks and startups
It will be interesting to see if startups treat this like the wake-up call it is or take the chance that this is just a PR move on Amazon’s part.
Time will tell.
Let’s turn our attention to why we’re here…
Understanding the Flutterwave affair
“And there we have it, after weeks of reporting on the Nigerian fintech unicorn Flutterwave, it all ends with a dull thud. The perfect word for it is anticlimactic. If there was any hope that one of Nigeria’s biggest and most visible startups would give a robust response to the allegations that it has faced since 2020, it was dashed with a hint of finality this week.” — Excerpt from Notadeepdive Newsletter (April 29).
Despite building a game-changing business, Flutterwave has not been able to shake the same sort of allegations that have trailed some era-defining startups like Uber.
Regulatory laxities: check.
Skirting compliance: check.
Displeased ex-employees: check.
Allegations of sexual misconduct: check.
Yet, it has managed to surf over these issues, first claiming that it had looked into the allegations of sexual misconduct and that it did not cheat employees out of their stock options. Whenever those allegations resurfaced, it simply whipped out the same statement and gave it another press run — it was like a game of whack-a-mole.
However, Flutterwave found itself responding to allegations that it simply could not ignore this week. The substance of the new allegations is that the company was involved in laundering some money wired into Kenya from Nigeria. It is the second high-profile case of money laundering involving Nigerian nationals in the last two months.
The first was in May 2022, when Kenya’s Assets Recovery Agency (ARA) began investigating the suspicious transfer of $221 million (₦128 billion) from Nigeria to Kenya between October and November 2020. The company at the heart of the investigation was RemX Capital Limited. But RemX Capital has denied the claims, clarifying that it “routinely moves funds legally and internationally in large amounts to perform its services.”
Their clarification may suggest this is a compliance issue, and in the interim, the court has frozen Sh5.6 billion in six accounts belonging to RemX Ltd and other companies involved in the money trail.
The more recent allegation has grabbed all the headlines because it has one of Nigeria’s unicorns at its center. Flutterwave has found itself in hot water in Kenya after a court froze $56m in the company’s accounts following allegations of money laundering. There’s been adequate reporting on the story here and here for instance. There’s also this article where Flutterwave insists it has done nothing wrong and it is working hard to find out “the motive behind the false claims.”
Pending the findings of the court, we can only come up with theories. The first, which is what the Kenyan authorities are alleging, will revolve around allegations that Flutterwave did not put sufficient controls in place to prevent money laundering. Court filings already say that Flutterwave was aware that transactions flouted AML rules but chose to continue them anyway. Flutterwave’s response to this particular claim is that it has the receipts for these transactions and that none of them was illegal. So, theory one, depending on how much you like conspiracy theories, may be that there’s an elaborate corporate financial crime syndicate at play here.
The other theory rests on one small detail that is quoted in several of the news reports: “The [Kenyan] agency also said that the fintech was operating in Kenya without a valid license from the country’s monetary regulator, the Central Bank of Kenya (CBK).” Small as this detail may be, it points to the fact that this case may be a way to incentivise Flutterwave and other Nigerian fintechs in Kenya to get the appropriate licensing. I wonder if we’ve seen this before in other African countries 👀.
In the end, it may be wise to reserve judgment for the Flutterwave affair until the government’s case becomes even clearer. This doesn’t strike me (yet) as the big flaming gun it’s been suggested to be yet, but my position may well change as new information arises.
What I’ve been reading
This fantastic piece by Fuad about “Mr Ethics,” gives a real-life look at Nigeria’s justice system.
Mr. Eazi is not just that music guy and this feature story talks about his investments in technology.
Agents made mobile money adoption possible, but its success may leave them without essential income.
This Nigerian writer asks: Can two people from different economic backgrounds ever be truly intimate?
This feature story talks about the expensive reality of studying for a Masters degree abroad from the POV of a Nigerian woman.
I got the Editorial Avengers for this edition. So super super big thank you to Yahaya Hassa, Fuad Lawal and Alexander Onukuwe for editing this!
All round good article. I thoroughly enjoyed your musing about the talent shortage.
Talent pipelines powered by deepening relationships between town and gown have never been more important for all of Corporate Nigeria and not just tech startups. Amazon is just the biggest player to have come into the market. Others have come before with varying degrees of success and more will follow as the global talent shortage bites even harder and companies all over try to innovate their way out of this recession.
Nigerian universities are at a critical juncture if they can become creative in their search for funding sources and the relationships they choose to cultivate. University departments that are tech or tech-adjacent stand to gain distinct advantages by pairing up with willing and forward-thinking companies to solve this challenge which isn't going away any time soon.
With regards to Flutterwave there is a sense that they have played fast and loose. They will need to step up and eat their greens. Regardless of how they come out of this probe by the Kenyans, there's something in their corporate culture that isn't kosher. Kicking their founder up to the chairman's office and bringing in a safe pair of hands to run the shop might be a good place to start.
Cheers