General News
Is Ethiopia Africa’s sleeping fintech giant?
By Yohannes Tsehai – Country Manager Onafriq Ethiopia
The fintech sector has been one of Africa’s biggest technology success stories. According to one report, the continent’s 678 fintech startups raised more than US$2.7 billion between 2021 and August 2023. Additionally, almost all of the continent’s unicorns (startups valued at more than US$1 billion) are in the fintech sector.
The majority of that success has, however, come from the continent’s three biggest startup markets: South Africa, Kenya, and Nigeria. In fact, 68% of African fintech startups come from these “big three” markets. But things are steadily changing. More and more countries are realising the benefits that come with an active fintech ecosystem, with a growing number of entrepreneurs in those countries also looking to enter the space.
One such country is Ethiopia. Home to more than 120 million people (making it the second most populous country in Africa), the country has many of the right ingredients to become Africa’s next big fintech giant. In addition to the country’s population size, it’s home to large numbers of unbanked people. At the same time, the country continues to experience high economic growth and rapidly increasing connectivity levels. With those and other enabling factors in place, could Ethiopia be Africa’s next big fintech giant?
A changing landscape
A few years ago, that’s not a question many would have dared to ask. More recently, however, several things have changed, which suggests that Ethiopia is waking up to, and embracing its fintech potential.
Take telco licensing, for example. Ethiopia has previously been closed off, with only the state-owned Ethio telecom allowed to operate. But Ethiopian Prime Minister Abiy Ahmed sees the liberalisation of the country’s telecommunications sector as key to its economic future. As such, the country has opened up to other operators. In October 2022, Safaricom became Ethiopia’s second official operator.
In the ensuing months, it has built up a 4 million-strong customer base and added 1.2 million users to its M-Pesa mobile money platform. Over time, those numbers will continue to grow. And while the bidding process for a third telco license has had to be put on ice for the moment, Ethiopia’s strong economic growth means that it’s only a matter of time before one is granted.
Those telcos will play a critical role in establishing an Ethiopian fintech ecosystem too. Right now, the country has a 53.5% mobile penetration rate but mobile connections grew by nearly 18% between 2022 and 2023. With 75% of the country’s population reportedly unbanked, increasing connectivity levels is one of the most powerful ways of giving people access to financial products, both from telcos and third parties, as demonstrated by Ethio telecom’s mobile money app Telebirr having 39.3 million customers.
Another significant move is the establishment of an Ethiopian stock exchange. The exchange, which is set to open in 2024 or 2025, is designed to be a source of funding for the small and medium-sized companies that form the backbone of the country’s economy. For local fintechs looking to raise the capital they need to expand at scale, it could prove critical.
Developing supportive policies
The Ethiopian government has also made significant strides when it comes to developing policies that encourage the growth of a fintech ecosystem. One of the most significant such policies is the National Financial Inclusion Strategy.
According to a research paper published by the GSMA, the aim is to increase financial inclusion from 46% to 70% of all adults by 2025. One of the key avenues it’s identified for doing so is by scaling digital payments through mobile money services. The country additionally aims to increase the use of digital payments from 20% of all adults in 2020 to 49% by 2025.
These policies could be dramatically transformative for both the Ethiopian economy and its people. According to the GSMA, mobile money services “could lift 700,000 people out of poverty, add US$5.3 billion to Ethiopia’s GDP, increase tax revenue by US$300 million and provide a cushion for the economic shocks experienced by almost 40% of Ethiopian households.”
There is, admittedly, a long way to go before mobile money can drive those advancements. GSMA figures show that just 4.2% of adult women and 5.1% of adult men had mobile money accounts in 2022. That said, those numbers are significantly higher than the 0.1% and 0.6% who had accounts in 2017. This suggests that, as much as there’s significant room for mobile money growth in Ethiopia, there’s a sizable and growing appetite too with increasingly accessible outlets.
Putting policy into practice
For policy to be effective, however, it has to be matched with practices that encourage the growth of fintech. Here, too, there are encouraging signs from Ethiopia.
The government has, for instance, used the mobile banking service HelloCash to digitise social protection payments under the flagship Productive Safety Net Programme (PNSP). Additionally, it’s increasingly accepting digital payments for public services such as utilities and has mandated digital-only payments for fuel purchases. The Ministry of Trade, meanwhile, has adopted Ethio’s Telebirr services and now allows traders to pay for services like commercial registration, trade licences and trade name-related service fee payments.
In conjunction with the adoption of mobile money by government departments, its growing use by private sector players such as mid-sized brands like supermarkets, petrol stations, and SMEs should help further drive their adoption.
Growth beyond mobile money
Of course, there are still other things that need to be put in place before Ethiopia really starts to achieve its fintech potential. Reliable interoperability, for example, remains a challenge, as does a shortage of access points and a lack of high-quality agent networks.
None of those challenges are, however, insurmountable. And, given the success that’s already accompanied the adoption of mobile money, overcoming them will help unlock other services that enable digital financial inclusion which have commenced (such as insurance, micro-financing, and savings products).
As more and more of those solutions fall into place, Ethiopia will be well on its way to unlocking its potential and becoming Africa’s next fintech giant.
Corporate Affairs Commission (CAC) has announced that it will begin enforcing statutory requirements on the contents of company business letters from August 1, 2026, warning that defaulting companies will face sanctions.
The commission disclosed this in a public notice signed by its management and posted on its X handle on Wednesday.
Recall that under the Companies and Allied Matters Act 2020, company business letters are required to clearly display key details, including the company’s registered name, registration number, directors’ present forenames or initials and surnames, any former forenames and surnames, and the nationality of every non-Nigerian director.
The requirement applies to all company business letters, including invoices, quotations, official correspondence and other business documents.
According to the CAC, the enforcement will cover the full application of Sections 304(1), 304(2) and 304(1)(c) of the Companies and Allied Matters Act 2020.
The commission said, “Commencing the 1st day of August 2026, the Commission shall enforce the full application of the requirements of sections 304(1) & (2) and (1)(c) of the Act with respect to company business letters with attendant sanctions for non-compliance.”
It reminded companies registered under the Act “to state in legible characters on its business letters, the present forename or initials and surname; any former forename and surname; and nationality of every non-Nigerian director as well as the company’s name and registration number.”
The commission urged affected companies to comply with the provisions before the enforcement date to avoid sanctions.
“The Commission remains committed to transparency, accountability and customer satisfaction as it strives to build a more resilient and responsive corporate regulatory environment,” the statement added.
Using Artificial intelligence (AI) for travel planning saves time and simplifies trip prep but poses significant data security risks, as almost 86 percent of users report privacy concerns, according to Kaspersky’s latest findings.
For instance, sharing sensitive details like your passport number or credit card can expose you to data breaches and identity theft.
Hackers can also use AI to imitate airlines or hotels to steal your money.
However, data security risks awareness is also high, which security experts call a good sign.
Kaspersky global research, revealed what drives active AI users to charge chatbots and AI-powered tools with the important responsibility of travel planning and how they estimate the security of such services.
The survey shows that the primary motivation for turning to AI in travel planning is to save time and simplify preparation, with 73 percent of users globally pointing out these benefits.
Other important advantages of AI in traveling, named by 65 percent of respondents, are the search for information about the main attractions in the chosen location and personalised recommendations tailored to individual preferences. Additionally, 63 percent leverage AI to find the most favourable offers, while 61 percent trust it to uncover information that would otherwise be hard to find.
In fact, nowadays with the help of AI, an individual travel itinerary, matching all the requests and budget of a particular traveller, can be created in just a few clicks.
However, information provided by chatbots always needs to be double checked.
There have already been several instances where tourists encountered issues because they trusted AI too much and did not conduct their own research for the trip.
What is more, not only the information, but even links provided by AI need to be checked, as there may be malicious and phishing links among them.
Before clicking on a link from an AI chatbot it is recommended to check it with a cybersecurity solution, such as Kaspersky Premium, empowered with phishing detection.
AI and security
Apart from setting a route and searching for information, AI in travel planning in many cases is also responsible for booking hotels and even tickets, which inevitably requires sharing personal data.
The Kaspersky global survey revealed that not all travellers are ready to entrust AI with their personal information.
Almost half (48%) of global respondents see security risks in AI usage and try not to share any sensitive data with it.
Together with those, 37% who do not have many security concerns about AI still try to be careful while working with it.
86% of those who use AI for travel planning think about data security while working with these tools. Only 14% of travellers are confident that sharing any data with AI is totally secure.
According to the survey, travellers in Spain, the United Kingdom, Indonesia, Malaysia, and South Africa express the greater concerns about AI-related risks, while those in China, the United Arab Emirates, and Saudi Arabia in contrast display higher confidence in the security of AI systems.
“The survey highlights a noteworthy level of caution among travellers who use AI, which is a promising sign. A rational attitude is crucial for any type of online interactions, especially when we talk about personal data sharing. After all, your ‘private’ conversations with AI can still be exposed to cyber threats, or a favourable offer discovered by a chatbot may turn out to be nothing more than a scam.
This doesn’t mean you should abandon these digital tools altogether. Instead, stay mindful, avoid oversharing personal information, and think carefully while choosing which task you can assign to the AI. By doing so, AI-powered services can evolve into reliable assistants that help you tackle a wide range of challenges safely and effectively,” commented, Vladislav Tushkanov, Group Manager at Kaspersky AI Technology Research Center.
Justice Yellim Bogoro of the Federal High Court in Lagos has declared the N60 billion fine imposed by the Advertising Regulatory Council of Nigeria (ARCON) on Facebook Nigeria Operations Limited Illegal.
Justice Bogoro stated that ARCON regulator exceeded its legal authority and breached the company’s constitutional right to a fair hearing.
He, who made the declaration while delivering judgment in Suit marked, FHC/L/CS/2205/2024, declared ARCON’s Notice of Violation/Demand for Compliance dated 21 October 2024, unconstitutional, unlawful, null, and void, and barred the agency from taking further steps to enforce it.
The judge also held that ARCON lacked the statutory power to impose fines for alleged criminal violations under the Advertising Regulatory Council of Nigeria Act, 2022, without first obtaining a conviction from a court or other competent tribunal.
The dispute arose from ARCON’s claim that Facebook Nigeria displayed advertisements on Facebook and Instagram to Nigerian audiences without prior approval from the Advertising Standards Panel, contrary to provisions of the ARCON Act and the Nigerian Code of Advertising.
Following these alleged breaches, the regulator ordered the company to cease displaying the advertisements and imposed an N60 billion penalty.
Apparently dissatisfied with the development, Facebook Nigeria, through Mofesomo Tayo-Oyetibo (SAN), its lawyer, challenged the action, arguing that ARCON lacked the legal authority to determine criminal liability or impose punitive sanctions via an administrative notice without allowing the company to defend itself.
The company also argued that it does not own or operate Facebook or Instagram, claiming both platforms are owned and controlled by Meta Platforms Inc., a separate foreign entity.
But ARCON, represented by Akinlolu Kehinde (SAN), contended that Facebook Nigeria acts as Meta’s operation in Nigeria and should therefore be held responsible for regulatory violations related to advertisements on the platforms.
The regulator further argued that the notice was simply a compliance directive, allowing the company the option to comply, pay the specified violation fee, or face prosecution.
However, Justice Bogoro dismissed the regulator’s arguments.
The judge stated that Facebook Nigeria is a distinct legal entity from Meta Platforms Inc. and that ARCON failed to present credible evidence showing that the Nigerian company owns, operates, or controls Facebook or Instagram.
The court maintained that the argument that Facebook Nigeria represents Meta’s interests in Nigeria was insufficient to establish liability for the alleged advertising infractions.
Regarding fair hearing, the court ruled that ARCON violated Section 36 of the Constitution by accusing the company of misconduct and imposing a N60 billion fine without first hearing its defence.
Justice Bogoro also held that Section 57(4) of the ARCON Act explicitly requires the regulator to provide a fair hearing before imposing any penalty.
The court further found that the alleged violations were criminal because Section 34 of the ARCON Act designates the unlawful exposure of advertisements as an offence.
The judge also held that, since the Act stated that punishment can only be imposed “upon conviction,” ARCON had no authority to impose the N60 billion fine through an administrative process.
He insisted that, regardless of what ARCON called it, the demand was a fine that could only be imposed by a court following proper judicial procedures.
As a result, the court invalidated the Notice of Violation/Demand for Compliance.
It declared ARCON lacked authority to impose fines for breaches of Sections 34(3), 54, or other criminal provisions of the ARCON Act.
Justice Bogoro also issued a perpetual injunction preventing ARCON, its officers, agents, and associates from enforcing the October 21, 2024 notice against Facebook Nigeria.
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