By Dr Adrian Saville, CE, Cannon Asset Managers



In September 2006, economics professor Nouriel Roubini warned an incredulous audience of fellow economists at the International Monetary Fund (IMF) that the US housing market was at risk of collapsing – an event that could ruin the global financial system. This was at a time when the global economy had recorded its fastest patch of growth in 30 years and, in the space of a decade, US house prices had doubled, making for the sturdiest gain in house prices in the post-war era.



Unfortunately, Roubini was right. Soon after his address, the global financial crisis (GFC) struck, and the little-known scholar of emerging markets quickly became the Wall Street celebrity “Dr Doom”.



The lessons learned from the GFC encouraged policymakers worldwide to work furiously to get economies back into shape through a series of fierce and co-ordinated policy responses to the impacts of Covid-19. In turn, this has encouraged a consensus view amongst economists that the recovery from the crisis will be V-shaped. Wall Street&nbsp; agrees, with the S&amp;P500 and NASDAQ having rebounded sharply since March’s meltdown. In fact, it seems that markets anticipate that the bold responses from the world’s leading policymakers will produce an equally fierce rebound in economies and earnings.



Groundhog Day



Yet, as if trapped in the tragicomedy of Groundhog Day, Dr Doom again disagrees with this consensus, and suggests the economic trajectory is likely to be L-shaped. Admittedly, Roubini expects an economic rebound in the pandemic’s immediate aftermath, but insists that this recovery will quickly collapse beneath the weight of the global economy’s accumulated debts, giving rise to the prospect of an economic depression.



It’s tempting to dismiss Roubini as having been “spectacularly right” the first time because he was banging on the disaster drum for many years before the GFC struck. But there is more than enough evidence in the post-pandemic makeup to suggest that we should be paying close attention to a depression scenario.



Markers for concern include a collapse in vehicle sales; the imposition of trade barriers to protect domestic markets; falling commodity prices; a wave of consumer debt thanks to easy money; a dive in the federal funds rate; a surge in unemployment; sharp market swings; deepening fiscal deficits; and the risk of a deflationary price spiral.



The risk is that Roubini is right



This list bears eerie similarity to the features that characterised the Great Depression of the 1930s. So, in deliberating on Roubini’s diagnosis and the implications for policymakers and investors, the risk is not that he is wrong, but that he is right.



We ignore this risk at our peril. In depression scenarios, conventional economic policy stops working, and markets behave differently. For example, in terms of policy, economists Lawrence Summers and J. Bradford DeLong have shown the importance of fiscal expansion – rather than fiscal prudence – in depressions.



Depressions also offer a good reason to seek and maintain some price inflation. Nominal interest rates of zero can’t be lowered much further. But the real rate of interest – the nominal interest rate minus expected inflation – can be taken far below zero by policies that push inflation rates higher.



Positioning portfolios for a depression scenario, then, means preparing for a world of higher rates of price inflation, government spending stimuli, nominal interest rates of zero, and negative real interest rates.



Diversify, diversify, diversify …



In this world, the first three rules of investing must be enforced with the strictest discipline: diversify, diversify, diversify. Portfolio diversification is a free lunch available to every investor, and the surest form of risk management.



We don’t know how or when the pandemic period will end – and we can’t be sure that Roubini is right. But diversifying your portfolio across asset classes, geographies, currencies and industries has a surer prospect of getting you to your investment destination than investment decisions that, in the absence of diversification, could be perfectly right or exactly wrong. This means gold and growth assets, not gold or growth assets; it means China and the US, not China or the US; and it means healthcare and resource stocks, not healthcare or resource stocks.



… and look for transformative assets



Additionally, investors should consider investing in transformative assets. If Roubini is right, it’s likely that even in an environment of hardship and misery, investments that are inclusive, co-operative, and collaborative will thrive. Covid-19 bonds could be one such asset, where issuers include the African Development Bank, or even the Bank of America, which has come to market with a $1 billion four-year Covid-19 bond to fund lending to hospitals, nursing facilities and healthcare manufacturers.



Then there are transformative businesses that will do better in hard times by doing good business, taking the place of current portfolios winners. In March, Kenyan telecom operator Safaricom made all person-to-person transactions under 1,000 Kenyan shillings free on the mobile money service M-Pesa. Near term, this put one-quarter of Safaricom’s revenue at risk, but long term is likely to entrench the business’s position in the payments market. Likewise, British restaurant chain Leon has reinvented itself by converting 57 sites into shops selling groceries and takeaway meals, saving 1,500 jobs and looking after 70 suppliers.



In other words, depression times do not spell the end for businesses or investors. Rather, as Joseph Schumpeter implores, our task is to create out of the destruction, by redesigning, reinforcing and reinventing.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: Investing for Roubini’s Greater Depression

NAIROBI (Reuters) &#8211; Kenya’s top telecoms operator Safaricom has seen a 70% surge in data usage as people stay at home to <a href="https://www.cnbcafrica.com/east-africa/2020/04/08/how-african-economies-can-survive-the-covid-19-crisis/">curb the spread of the new coronavirus</a>, it said on Tuesday.



The government closed schools and asked people to work from home where possible last month, after the East African nation reported its first case of the virus.



<a href="https://www.cnbcafrica.com/videos/2020/04/14/how-kenya-plans-to-help-its-informal-sector-survive-the-covid-19-crisis/">Confirmed cases have risen to 208</a> and additional restrictions, including a night time curfew, have been imposed.



Safaricom, which is partly owned by South Africa’s Vodacom and Britain’s Vodafone, said mobile phone data usage had jumped 35% as users streamed movies, worked from home and used social media sites like Facebook.



The company is one of the biggest providers of internet access in Kenya, supplying 300,000 homes with a fibre connection, and nearly all of the 47 million population with second, third and fourth generation mobile internet coverage.



Along with financial services platform M-Pesa, the data business has been one of the key drivers of earnings growth for Safaricom in recent years.



(Reporting by Duncan Miriri; Editing by Jon Boyle and Mark Potter)



This article was first published on Reuters Africa <a href="https://af.reuters.com/article/investingNews/idAFKCN21W1NH-OZABS">https://af.reuters.com/article/investingNews/idAFKCN21W1NH-OZABS</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Here’s how to apply for SA’s COVID-19 loan guarantee scheme

Kenya’s Safaricom sees 70% jump in data usage during COVID-19 lockdown

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Safaricom and Vodacom recently announced the completion of the acquisition of the M-pesa brand as well as product development and support services from Vodafone through a newly created joint venture. This move is expected to accelerate M-pesa&#8217;s growth in Africa. Sitoyo Lopokoiyit, Safaricom Chief Officer for Financial Services joins CNBC Africa for more.

Safaricom

Ethiopia closes door on M-Pesa

Ethiopia closes door on M-Pesa, only local companies allowed

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As the world copes in quarantine, the Kenyan private sector is making moves to alleviate customers&#8217; experience during this time with Safaricom waiving transfer fees and increasing daily M-Pesa transaction limits, to large supermarket chains like Tuskys providing home delivery services. Journalist, Joseph Bonyo joins CNBC Africa for more.

Kenya increases transaction limits

Kenya increases transaction limits, encourages delivery services to halt COVID-19 spread

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According to the Dar es Salaam Stock Exchange Plc, Acacia mining officially delisted from the bourse on Monday, two months after the company was delisted from the London Stock Exchange (LSE) Group. This will cut the DSE&#8217;s total market capitalization by $1.182 billion. Also Vodacom Tanzania earnings rose by 6.5 per cent in the six months to September 2019, driven by strong revenue growth in its M-Pesa, mobile data and messaging services. Alpha Marwa, Managing Partner at Vervet Global Tanzania joins CNBC Africa for more.

Acacia Mining delists from Dar es Salaam Stock Exchange

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Safaricom&#8217;s M-pesa revenues are expected to take a hit to 13.3 year-on-year from 18.20 per cent that was reported in the first half of 2019 according to a report by Genghis Capital, now the decline has been attributed to the performance of the betting industry which accounts for about 7 per cent of M-pesa revenues. For more on this, Research Analyst from Genghis Capital, Patrick Mumu joins CNBC Africa for more.

M-pesa revenues decline attributed to betting industry

NAIROBI, April 3 (Reuters) &#8211; The proportion of Kenya’s population with access to formal financial services rose to 83 percent from 75 percent in 2016, driven largely by mobile technology, a survey part-conducted by the central bank showed on Wednesday.



The East African nation is one of the world’s leaders in mobile money services, after telecoms operator Safaricom pioneered its M-Pesa service 12 years ago to cater for Kenyans without access to the formal banking network.



M-Pesa has since evolved from a basic SIM card-based money transfer application into a fully-fledged financial service, offering loans and savings in conjunction with local banks, plus merchant payments services.



Airtel Kenya, a unit of India’s Bharti Airtel, and Telkom Kenya Ltd also operate mobile money services in Kenya, as does Equity Group, a lender which runs virtual mobile network operator and financial services platform Equitel.



READ: <a href="http://cnbc.africa/news/east-africa/2017/01/04/mpesa-economic-impact-on-kenya/">M-pesa has completely transformed Kenya&#8217;s economy, this is how…</a>



The survey by the central bank and FSD Kenya, a campaigner for financial inclusion, found that 41 percent of the population had bank accounts, meaning the broader rise in access to financial services had been driven by mobile phone services.



Kenya was ranked third on the continent after South Africa and Seychelles in terms of access to financial services. South Africa’s access stands at 90 percent while Seychelles stands at 95 percent.



Only 14 percent of the Kenyan population had bank accounts in 2006 when the survey was first carried out. The figure rose to 34.4 percent in 2016.



The latest data from the Communications Authority of Kenya shows that as of December 2018, Kenya had 31.6 million active users of mobile money transfer services.



Safaricom’s M-Pesa was the market leader with 25.57 million users, followed by Airtel with 3.77 million users. (Reporting by George Obulutsa; Editing by Jan Harvey)

M-Pesa has completely changed Kenyans’ access to financial services, this is how…

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Leading digital money transfer service WorldRemit has signed a direct partnership with Kenya’s telcom giant Safaricom to enable instant cross-border money transfers to 28.6 million M-PESA mobile money accounts in Kenya. Sharon Kinyanjyui, Head of East and Central Africa at WorldRemit joins CNBC Africa to shed more light on this deal.

WorldRemit signs partnership with Safaricom to boost remittances

LAGOS, June 25 (Reuters) &#8211; Online sports betting is booming in soccer-mad Nigeria largely thanks to payment systems developed by homegrown technology firms that are starting to make online businesses more viable.
For years, mobile payments failed to take off in Nigeria as they have in countries such as Kenya, where Safaricom’s M-Pesa money transfers have fostered a culture of cashless payments.
Fear of electronic fraud and slow internet speeds have held Nigerian online consumers back but betting firms says the new, fast digital payment systems underpinning their websites are changing attitudes towards online transactions.
“We have seen significant growth in the number of payment solutions that are available. All that is definitely changing the gaming space,” said Seun Anibaba, CEO of Lagos State Lotteries Board, gaming regulator in Nigeria’s commercial capital.
“The operators will go with whoever is faster, whoever can connect to their platform with less issues and glitches,” he said, adding that taxes from sports betting in Lagos State rose 30 percent to 40 percent in 2017 from 2016.
That growth has been matched by a rise in web payments, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), which is owned by the central bank and licensed banks.
In 2016, there were 14 million web payments worth a total 132 billion naira ($420 million). Transactions leapt to 29 million worth 185 billion in 2017 and in the first quarter of 2018 there were nearly 10 million worth 61 billion.
With a young population of nearly 190 million, rising mobile phone use and falling data costs, Nigeria has long been seen as a great opportunity for online businesses &#8211; once consumers feel comfortable with electronic payments.
Online gambling firms say that is happening, though reaching the tens of millions of Nigerians without access to banking services remains a challenge for pure online retailers.
British online betting firm Betway opened its first African business in Kenya in 2015, followed by Uganda, Ghana and South Africa. It launched in Nigeria in January.
“There is a gradual shift to online now, that is where the industry is going,” Betway’s Nigeria manager Lere Awokoya said.
“The growth in the number of fintechs, and the government as an enabler, has helped the business to thrive. These technological shifts encouraged Betway to start operating in Nigeria,” he said.
<h3>FINTECH COMPETITION</h3>
Betting firms cashing in on the soccer frenzy whipped up by Nigeria’s participation in the World Cup say they are finding the payment systems created by local startups such as Paystack are proving popular online.
Paystack and another local startup Flutterwave, both founded in 2016, are providing competition for Nigeria’s Interswitch which was set up in 2002 and was the main platform used by businesses operating in Nigeria.
“We added Paystack as one of our payment options without any fanfare, without announcing to our customers, and within a month it shot up to the number one most used payment option on the website,” said Akin Alabi, founder of NairabBET.
He said NairaBET, the country’s second biggest betting firm, now had 2 million regular customers on its website, up from 500,000 in 2013, and Paystack remained the most popular payment option since it was added in late 2017.
Paystack was set up by two Nigerian computer science graduates, Shola Akinlade and Ezra Olubi, who received early stage funding in Silicon Valley’s Y-Combinator programme.
In December 2016, it raised $1.3 million from investors including China’s Tencent and Comcast Ventures in the United States.
Paystack, based in the frenetic Ikeja district of Lagos, said the number of monthly transactions it processed rose from about 8,000 in early 2016 to more than 900,000 as of June 2018.
“In early 2016 we were processing about $3,000 a month. Today we process well over $11 million every single month,” said Emmanuel Quartey, Paystack’s head of growth.
He said an ecosystem of developers had emerged around Paystack, creating software to integrate the platform into websites. “We have seen a growth in that community and they have carried us along,” said Quartey.
Paystack said it enables payments for a number of betting firms but also a wide range of businesses, from utility services to transport companies to insurer Axa Mansard.
Flutterwave, co-founded by Nigerian entrepreneur Iyinoluwa Aboyeji, is also backed by the Y-Combinator programme as well as venture capitalists Greycroft Partners and Green Visor Capital and the Omidyar Network. It raised $10 million last year.
<h3>FOREIGN INVESTMENT</h3>
Shifts in Nigeria’s payment culture have coincided with the arrival of foreign investors hoping to tap into sports betting.
Industry experts say the sector generates about $1 billion a year and is likely to grow faster than in South Africa and Kenya where the business is more developed.
Russia’s 1XBet and Slovakia’s DOXXbet have both set up in Nigeria in the last two years while Italy’s Goldbet was ahead of the trend, taking a 50 percent stake in market leader Bet9ja when the Nigerian firm launched in 2015.
NairaBET’s Alabi said its sales were split between shops and online but the ease of electronic payments, cost of running shops and ability for customers to avoid the stigma of gambling in public meant online transactions would grow.
But despite advances in digital payments, Kunle Soname &#8211; chairman and co-founder of Bet9ja &#8211; said it was important to have a shop network, not least because many customers still remain reluctant to spend online.
He said the company, with about 60 percent of Nigeria’s sports betting market, had an extensive network. Nigerian betting shops often act as social hubs where customers can watch soccer free of charge while placing bets.
At a BetKing hall deep inside the bustling Oshodi market in Lagos, dozens of soccer fans gathered to watch Nigeria’s final warm up game before the World Cup.
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Richard Onuka, a factory worker who earns 25,000 naira a month, was fixated on a TV screen inside. He said he started gambling three months ago and bets up to 1,000 naira a day.
“Since I have been playing I have not won anything but I believe that one day I will win,” said Onuka. ($1 = 314.5000 naira) (Reporting by Alexis Akwagyiram and Didi Akinyelure in Lagos; editing by David Clarke)

Online sports betting is booming in soccer-mad Nigeria, here’s why

By the Ashburton Investments Africa fund management team
Talk of artificial intelligence (AI) and the advent of the fourth industrial revolution, has created fear in developed countries that many jobs will be lost to machines and robots, and that economic growth will be stifled by technological advances.
We, however, believe that the African continent may well be able to benefit from these technologies in ways that possibly aren’t envisaged in more developed economies. The continent should also be able to avoid the expensive roll out of outdated technologies and leapfrog to the latest innovations.  After all, as Naadiya Moosajee, a World Economic Forum Global Shaper said: &#8220;necessity is the mother of invention and in Africa it has been the mother of innovation.&#8221;
History shows us that people on the continent have been strong adopters of new technologies and that Africa has even bypassed existing developments. After skipping the roll out of land lines, mobile technology users were quick to see the benefits this could bring, especially mobile money. Sub-Saharan Africa, with just under half of all the mobile money platforms in the world, is leading the globe in rolling out financial products to masses of people who were previously excluded from this area of the formal economy. By the end of 2017, there were 122 million active mobile money accounts in the region, with users transacting $20 billion per month (63% of the value of all mobile money transactions in the world).
Even if changes are needed to localise software or technologies, there are enough expert hubs across the continent with strong information technology and engineering capabilities to do this.
Education will be key to making sure that the requisite skills levels are available so that Africa can benefit from new technologies. Although investment in education should be a driver for economic growth, and therefore an important focus for African governments, we have seen that the take up of services and the use of telecommunications has not been limited by current education levels. By way of example, almost 90% of Safaricom’s clients use its mobile money platform, M-Pesa, many of whom are rural and have not had much senior schooling.
Despite the concern that the relatively unskilled African workforce will be left out of the knowledge economy, advances in technology make it possible for niche businesses to access their clients efficiently.  The use of social media as a marketing tool for the myriad of small and medium enterprises (SMEs) that Africa is well known for, can enhance sales without excessive costs. New applications also create new opportunities. Uber, as an example, has increased the number of people using taxi services and has also made it possible for entrepreneurs to start a small business, leading to more employment. Think of the increased marketing reach someone running a small bed and breakfast can achieve through a service like AirBnB, and with almost no capital outlay. We are already seeing mobile money platforms used to provide short term loans to SMEs to enable them to expand working capital. Support for and growth in SMEs will help to address Africa’s unemployment, promote inclusive growth and encourage gender equality. If SME’s are going to be the driver of jobs and economic growth in Africa, technology will be a key enabler in this part of the continent’s future.
But, it is not just at the level of mobile technology, mobile money and smartphone applications that the continent will benefit from new technologies. Some of the larger industrial parts of the economy are also being transformed. As advances in solar and other renewable energy reduce the capital costs of installing these systems and the storage of electricity (in batteries and the like) becomes cheaper, we will see the transformation of the electricity grid. In the past, low cost electricity meant building very large power stations (to get low unit costs for power) that used fossil fuels like coal;oil or alternatively very large nuclear power stations. These power stations were connected to a very large electricity grid that ultimately had to be rolled out across the country to connect individual households. A massive capital expense for a poor country before any benefit could be derived.
New and renewable electricity generating technologies will allow regional grids to be developed at a reasonable cost that don’t need to be connected to the national grid. New use of remote sensors will enable easy and remote management of these grids and smart meters will allow efficient and remote billing including prepayment for power to reduce bad debts.
These new technologies can even lead to the smallest grid, an individual home.  In east Africa, combining mobile payment technologies with solar power allows even the smallest home to be lit. The M-Kopa IV Solar Home System includes a solar panel, control unit, three low-energy LED light bulbs (one of which is a portable, rechargeable torch) and a rechargeable radio. The control unit also has a USB port for charging cellphones. Purchasers can make small daily payments using M-Pesa to pay it off over a year.
Although a stable, reliable and reasonably priced electricity supply is key to the industrialisation of Africa, rolling out regional grids into key hubs could avoid the capital cost of expensive country wide transmission networks. The benefits for agricultural processing in the continent with most of the world’s underutilised arable land would be immense. Electricity would also allow the implementation of a cold chain from farm to fork. Agriculture still employs and supports the largest percentage of Africa’s population and improving the productivity of rural farmers and providing a global market for their products. Bring on technology to the continent.

Op:Ed: Africa has the potential to benefit from 4th industrial revolution technologies in ways that aren’t envisaged, here’s how

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By Mary-Jean Nleya 
The financial services industry in Africa is ever expanding with fintech startups finding particularly innovative ways to service the 80% unbanked adults in Africa. <a href="http://disrupt-africa.com/about/">Disrupt Africa</a>, a portal with information relating to Africa’s startup scene, released a <a href="http://disrupt-africa.com/finnovating-for-africa/">report</a> which found that of the <a href="http://disrupt-africa.com/finnovating-for-africa/">301 fintech startups</a>, 125 of the startups place their efforts on <a href="https://www.forbes.com/sites/mfonobongnsehe/2017/06/15/payment-startups-lead-way-in-africas-booming-fintech-scene/#5268d9cd24d1">easing the process</a> of sending and receiving money.
Mobile money technology has gained significant traction on the continent, especially among those who lack basic financial services from traditional financial providers.  While many think of Kenya’s M-Pesa when mobile payment technology is mentioned; there is another mobile money technology startup that is making a name in the financial inclusion space since its founding in 2009, it is known as Zoona. Founded by two brothers from Kitwe, a city in Zambia. Zoona currently operates in <a href="https://ilovezoona.com/about-us/">three markets</a>: Zambia, Malawi and Mozambique and is looking to <a href="https://www.youtube.com/watch?v=XzsLV_cvCm8">expand</a> into the Democratic Republic of Congo.
<h4>Relationship building</h4>
In Lilongwe, Malawi’s capital the trademark bright lime green boxes are found in almost every busy street, with more than one in many others. The Managing Director of Zoona Malawi, Ms. Killy Kanjo explained that Zoona’s main vision “is to make communities thrive”. As the first Managing Director for Zoona Malawi, she explained that her role in the company was and currently is to build relationships with the relevant stakeholders in Malawi and most importantly to “make people understand that what Zoona does is both economic and social”.
Kanjo also worked directly with Malawi’s regulators at the early inception of Zoona’s operations in Malawi. “The regulators provided us with guidelines and also gave us the necessary latitude we needed to grow”. When asked about the <a href="https://www.economist.com/news/finance-and-economics/21720624-startup-takes-banks-and-mobile-operators-different-approach-mobile">US$15 million</a> that Zoona raised from investors in 2016, Kanjo explained that “Zoona has a deliberate strategy of creating more jobs for the youth as well as empower women and that is what it will continue to do”.
Lucy Zuze, a 20 year old young woman working as a Zoona teller, operating at one of Zoona’s many outlets in the city of Lilongwe said she had started working for Zoona in January 2017, prior to this she had been unemployed and had found it difficult to secure a job. Zuze explained, “I am able to do what I want because I have my own finances that I get from being a teller at this outlet”. She went on to say, “I hope to one day rise to become a Zoona agent and employ tellers like myself in the future”.
<h4>Partnering with youth and women</h4>
“Many youth have nowhere to go, Zoona wants to partner with the youth and women and see how we can work together”, Kanjo said. Since 2009, when Zoona was founded, over <a href="https://ilovezoona.com/about-us/">US$2 billion</a> in transactions have been processed by Zoona – in response to this fact Kanjo said, “this figure is humbling”. Given that Zoona’s target market is the unbanked and underserved communities in its countries of operation, “there is clearly a lot of money out there that people are not aware of – underserved communities simply need a platform that cater to their needs that they can transact their monies through and I think Zoona is moving Africa in that right direction,” Kanjo said.
Zoona’s <a href="https://www.sbs.ox.ac.uk/sites/default/files/Skoll_Centre/Docs/Zoona-Case-A.pdf">business model</a> and its mode of operations is centred on its small business agents, its franchisees, who in turn (may employ tellers or may themselves) process transactions for the customers at the Zoona lime green booths. The network of agents are strategically dispersed and they themselves earn a commission on the number of transactions made and Zoona in turn charges a fee to each sender making use of its system.
In Lilongwe, particularly, Zoona outlets are near large supermarkets, at transport hubs, near schools and so on. The top-performing agents are at liberty to have more than one outlet as well as pick a location for the outlet to be situated; whereas the newer agents are guided as to where to place their initial Zoona outlet. “Giving the power to the Zoona agents makes the business grow better, they are on the ground and they best understand their customers and what their customers need”, Kanjo said. “We offer the initial training and the ongoing guidance to our agents, but we do not restrict them”. There are 500 agents in Zoona Malawi’s operations and these 500 agents have created over 750 jobs, as Zoona tellers.
<h4>Malawi is a cash-driven society</h4>
Malawi, similar to Zambia (where Zoona began operations), is a cash-driven society. “Zoona’s biggest competitive advantage is liquidity. We aim to ensure that no customer bounces from the green box because there was no money”, Kanjo said. Having large heaps of cash, while it may be a competitive advantage may pose a security challenge for Zoona outlets. “Zoona agents and tellers are mindful of security issues and they know how to balance having physical cash and electronic money”, Kanjo elucidated.
While Africa is home to numerous fintech startups, “It is important to offer a service that people need”, Kanjo said. “Our commodity is money; we don’t sell SIM cards, data bundles or anything else. We move money and move money quickly – that is what people here needed and Zoona resonated with a lot of people here in Malawi”. Access to relevant and affordable financial services and products enables society to move towards financial inclusion and this is especially imperative for Africa.
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Op-Ed: Making money while doing good in Malawi

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Telecoms Giant Safaricom has kicked off the search for a new M-Pesa head after Ronald Webb exited the company after just one year in charge of its mobile money division. Brian Wamatu would hold the position on an interim basis.

Safaricom searches for a new head as executive quits

Nqobile Dludla | JOHANNESBURG
South Africa&#8217;s Vodacom said on Monday it will buy a 35 percent stake in Safaricom from its parent company Vodafone for 34.6 billion rand ($2.59 billion), expanding its reach into Kenya.
Safaricom, which is 40 percent owned by Britain&#8217;s Vodafone and 35 percent by Kenya&#8217;s government, has the largest subscriber base in its home market and dominates the thriving mobile financial services sector through its M-Pesa platform.
&#8220;The proposed transaction will expose Vodacom Group to the attractive high growth Kenyan market, being one of the largest and most advanced economies in east and central Africa that has made significant strides in technological innovation,&#8221; Vodacom said in a statement.
Vodafone will retain a 12.5 percent interest in Vodafone Kenya, equivalent to 5 percent interest in Safaricom, after completion of the proposed transaction, the company said.
($1 = 13.3415 rand)
(Reporting by Nqobile Dludla; Editing by Joe Brock)
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Vodacom agrees $2.6 bln Safaricom deal to tap Kenyan market

NAIROBI (Reuters) &#8211; Kenya will start selling a mobile-phone based government bond this week, the Treasury said on Tuesday, the culmination of a lengthy plan to tap a new pool of investors into government securities.
The Treasury said the bond will go on sale on Thursday, without offering more information. Kenya pioneered the use of mobile money in 2007 with M-Pesa, a money transfer service, by telecoms operator Safaricom.
READ: <a href="http://cnbc.africa/news/east-africa/2017/01/04/mpesa-economic-impact-on-kenya/">M-Pesa has completely transformed Kenya&#8217;s economy</a> 
Known as M-Akiba, the new bond will be offered on M-Pesa and similar mobile phone financial services by other firms, a source in the telecoms industry said. Investors will be able to buy the bond through their phones, where a record of their holdings will be stored. Coupon payments will also be made through the phone.
M-Pesa allows users to transfer cash and make payments on even the most basic mobile phone. In partnership with local banks, Safaricom has since expanded the service to offer savings, lending and insurance products.
(Reporting by Duncan Miriri, editing by Larry King)

You can now buy Kenyan government bonds on your phone

A recently <a style="font-family: Roboto, Arial, sans-serif; font-size: 15px; font-weight: 400;" href="http://science.sciencemag.org/content/354/6317/1288.full">published study</a> on the long-run effects of mobile money on economic outcomes in Kenya provides some valuable insights that will benefit economic development and financial inclusion policies across Africa.
The study found that increased access to mobile money has reduced poverty in Kenya, particularly among female-headed households. Rapid expansion of mobile money has lifted an estimated 2% of Kenyan households (some 194,000) out of extreme poverty. It has also enabled 185,000 women to move out of subsistence farming and into business or sales occupations.
Mobile money is a form of electronic money that allows you to conduct financial transactions using <a href="http://www.sbs.ox.ac.uk/sites/default/files/research-projects/mobile-money/mobile-survey-leapfrogging-3.pdf">your mobile phone</a>. It allows financial services to be extended to unbanked people at a significantly lower cost because physical infrastructure isn’t needed.
Mobile phone penetration is rising across sub-Saharan Africa, with <a href="http://databank.worldbank.org/data/">almost 76%</a> of the population having a mobile phone subscription. The growth in mobile phone ownership raises the potential for mobile money to reach unbanked people, providing them with a more affordable payments system.
M-PESA, Africa’s first mobile money platform, was launched by Safaricom in Kenya in 2007. The service was designed to enable remittances to be sent home, and has enjoyed widespread adoption. Today <a href="http://science.sciencemag.org/content/354/6317/1288.full">96% of households</a> outside Nairobi have at least one M-PESA account.
<h2>Poverty reduction</h2>
The impact on poverty reduction appears to be the result of improved financial behaviour – by facilitating easier and safer savings – and changes in the occupational choice of users.
Mobile wallets offer a secure place to save as funds are stored virtually. And both the mobile money facility and the mobile phone can be password-protected. Savings can be used during hard times or for productive investments, like establishing or expanding a small business.
Before mobile money the transaction costs of sending money over large distances were high. This was true both in terms of time as well as the financial resources needed to effect transactions.
High transaction costs meant that households were limited to forming risk sharing networks with others in close proximity. This reduced the effectiveness of informal risk sharing as all households in the network were vulnerable to experiencing the same shocks at the same time. Examples of shocks that could affect an entire community include droughts, fires, crop or livestock diseases and floods.
Mobile money enables quicker, cheaper and more reliable money transfers over greater distances. In turn, this has allowed mobile money users to diversify their informal risk-sharing networks and draw on a wider network of social support.
<h2>Impact of M-PESA</h2>
M-PESA has significantly reduced transaction costs in Kenya. When it was launched the average distance to the nearest bank was 9.2 kilometres. Eight years later in 2015 the average distance to the nearest M-PESA agent <a href="https://www.theigc.org/wp-content/uploads/2016/03/1.-Sarah-Logan.pdf">was a mere 1.4km</a>.
When M-PESA started it created a network of agents that were geographically dispersed which meant that more people in rural and sparsely populated areas were within reach of one. This resulted in significant and widespread adoption.
Now that mobile money users are able to form more diverse risk-sharing networks, it’s not surprising that users, compared with non-users, tend to receive more remittances from more people. This is particularly marked when users are responding to negative shocks.
Mobile money users are therefore more financially resilient and can protect themselves better against economic and other shocks. It also allows them to increase their consumption in bad times. This is key to enabling households to lift themselves out of extreme poverty.
The recent findings also show that in areas that have experienced large increases in access to mobile money people were more likely to be working in business or sales rather than in subsistence farming. Additionally, fewer people in these areas reported having secondary occupations.
Both these findings were seen to be particularly true for women. This was found to be true in female-headed households as well as male-headed households. An estimated 185,000 women have been induced to switch from subsistence farming to business or sales as their primary occupation as a result of mobile money access.
That mobile money has a positive impact on economic outcomes for women is particularly notable when seen against some historical studies on related subjects. For example, studies on the impact of micro-finance on female clients, and on the economic returns to capital grants for female-operated small businesses, <a href="http://qje.oxfordjournals.org/content/123/4/1329.full.pdf+html">have tended to show limited results</a>.
This may reveal something crucial. For women, the route out of poverty may be financial inclusion that allows them to better manage their existing financial resources, rather than increasing their financial resources from credit or grants.
This finding has significant implications for policy and poverty-reduction efforts.
<h2>More to come</h2>
As other products built on mobile money platforms are developed, financial inclusion is deepened and users are empowered to improve the management of their financial resources.
Other products allow users to, for example, earn interest on savings, <a>access micro-loans and affordable insurance</a>, and <a href="http://www.nation.co.ke/business/M-Akiba-bond-set-to-trade-next-month/996-3373352-r96f7b/">invest in government securities</a>.
Mobile money has been transformational in Kenya, and has the potential to similarly benefit the rest of sub-Saharan Africa.
<img loading="lazy" decoding="async" src="https://counter.theconversation.edu.au/content/70432/count.gif?distributor=republish-lightbox-basic" width="1" height="1" alt="The Conversation"/>
*<a href="https://theconversation.com/profiles/sarah-logan-235944">Sarah Logan</a>, Economist, <a href="http://theconversation.com/institutions/international-growth-centre-2530">International Growth Centre</a>
This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/study-provides-fresh-insights-into-the-benefits-of-mobile-money-in-kenya-70432">original article</a>.

M-pesa has completely transformed Kenya's economy, this is how…

Recently, I have been intrigued to see how parts of this great continent are beginning to take up the mettle and make a mark when it comes to technology prowess, particularly, the platform economy.
We might still not have created the likes of Google, Facebook, Whatsapp, but our foray into M-Pesa, the platform that has come to define the era of mobile money in Africa and many other innovations, demonstrates that it won’t be long before the continent enters the ranks of producing a global platform of note.
I have been clamoring for a company to originate from Africa that creates games for the people of Africa and of course the world.  Gaming is the way one can express how their culture is reshaped and changes over a period of time &#8211; <a href="http://www.chopup.me/">Chopup</a> is one such tech platform.
Chopup is the brainchild of two youngsters in Nigeria, who have chased their dream to make sure African games like their peers around the world have a voice and more importantly, the people of this continent can also enjoy games that are made in their own circumstances.
These games that are created use the environment and caricature of the bustling energies of Lagos particularly the Yellow Combies, which pry commuters from one part of the city to the rest.
To get their creation going, these youngsters arranged gaming challenges at different universities across Nigeria, taking a cue from the playbook of the forerunner of the social media, Facebook.
These youngsters have won accolades about their growing creation in gaming and continue to learn and aspire to take their games across the continent and world.
Recently, their games have been uploaded into the gaming portals of MTN, Etisalat and Huawei and are slowly making their way across the continent.
The journey of these two youngsters is still in its infancy, but the steps taken shout of a growing tech future as attested by the recent visit by Mark Zuckerberg to Nigeria and Kenya
*YPO is a global community of chief executives dedicated to becoming Better Leaders through Lifelong Learning and Idea Exchange.TM  We create trusted spaces where leaders gather, connect, share and grow. The YPO platform provides more than 24,000 members in more than 130 countries – representing diversified industries and types of businesses – with access to extraordinary educational opportunities, alliances with leading institutions, and interest-based communities to support their businesses, communities and families. For more information, visit <a href="http://www.ypo.org/">ypo.org</a> .﻿

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