E-commerce platforms like Jumia and fintech companies have brought a new dynamic to everyday living in Northern Nigeria. Individuals, households, small enterprises, and huge corporations are increasingly turning to the internet for a variety of transactions.
More importantly, Jumia and other partners’ dedication to opening the digital space in the northern states has resulted in increased awareness and knowledge of the enormous capabilities and benefits of e-commerce. E-commerce platforms, in particular, have accelerated digitisation in the north by eliminating barriers to entry such as scepticism, lack of confidence, and concerns about data security breaches, among others.
Nano Strix, a 3PL logistics company, based in Abuja and several FMCG companies are among small and large corporations leveraging e-commerce to create and increase opportunities in the northern part of Nigeria and elsewhere. Through its partnership with Jumia launched in 2015, the company provides third-party logistics services and is the first logistics hub for Jumia in Northern Nigeria.
According to Nano Strix CEO Mohammed Maikudi, as the pioneer e-Commerce platform in Northern Nigeria, the company has been able to push over from the initial low user adoption occasioned by people’s lack of trust and fear of the safety of putting their debit cards online.
“Over time, Jumia has built a name for itself where we now see a more positive trajectory in the industry. People are now more trusting of the services Jumia offers, putting their credit cards or debit cards online ordering items without the fear of being stuck with something they don’t like or expect,” he said.
Maikudi further enthused, “Our package volumes have started to increase over time, allowing us to employ more staff, provide more benefits to our staff and bring them into the fold. For example, our volume has increased to a point where we allow staff to bring into our 3PL fleet, so everyone benefits.”
Furthermore, Jumia’s partnership with Unilever for last-mile logistics is accelerating e-commerce adoption in Northern Nigeria. The strategic partnership enables Unilever to improve turnaround time for consumers in Northern Nigeria’s vast geographic area, allowing them to obtain items more quickly.
The consumer goods company benefits from Jumia’s extensive logistics network by optimizing network scale, delivery speed, and seamless customer experience. Commenting on the partnership, Unilever Nigeria Logistics Manager, Supply Chain Operations, Jeremiah Aloko, said the strategic partnership with Jumia Nigeria has significantly impacted top tier services in Northern Nigeria. During the presentation of Unilever Nigeria’s Best Logistics Partner award to Jumia, he said, “We are impressed with Jumia’s high quality of work in the context of an extremely challenging logistics environment in Africa.”
As e-commerce grows in popularity in Nigerian cities, Jumia and others are fostering many small businesses and logistics companies to satisfy the increasing demands of sellers and buyers. In some Northern Nigerian cities like Kaduna, Kano, and Plateau, it is now common to see delivery vans and bikes delivering items to customers.
A Jumia partner and CEO of Brand Shop Prints, an Abuja-based ICT firm, Fortune Arinze, applauded the impact of the Jumia pick-up station on business growth. He acknowledged that the partnership has helped maintain cash inflow during printing business downtime and supported business expansion through ownership of bikes that deliver food on the Jumia platform.
“As an entrepreneur, the major aim is to make more revenue, and that’s what having a pick-up station in our office space does for me. The advantage we get from this pick-up station is constant turnover, which is what every business needs because, with our kind of business, it’s not every day that we receive new jobs or contracts from clients, but the Jumia pick-up station is a steady source of income. People pick up items every day, and we also deliver food every day. Jumia pays for each item picked up from the station,” he said.
The disruption caused by COVID-19 emphasizes the importance of e-commerce adoption in the north. Logistics gaps like transportation and warehousing, as well as the lack of physical stalls to sell during the lockdowns, would have spelt doom for small scale farmers if not for e-commerce platforms. While the lockdown was in effect, their produce, particularly groceries and other perishables, would not have made it to the public.
A Nation Troubled From All Directions
2022 Benue Local Council Election, Another Vote of Confidence for Ortom
AfCFTA and What it Means for e-Commerce
How e-Commerce Using Social Media Platforms is Creating a Market for Online Shoppers and Vendors
OurPass App to Revolutionize e-Commerce
COVID-19 Second Wave: Social Distancing and the Place of e-Commerce
Visa Advises Online Merchants on Customer Retention
How e-Commerce Came Through for Nigerians in 2020
For the All Progressives Congress (APC), the 2023 presidential elections present a real test of its ability to survive and forge a unified front as a political organisation.
The President Muhammadu Buhari era is about to end and the hitherto unifying figure of a Buhari that appears to have glued the disparate tendencies in the party together will no longer be there.
Already, the commencement of the process of picking the party’s candidate for the 2023 contest has shown glaringly that the contest will be brutal and acidic unless a miracle happens.
Since the party’s initial objective of booting out the Peoples Democratic Party (PDP) and gaining power has been achieved in the Buhari two-term presidency, 2023 will signal for the party the real wheeling and dealing of ruthless ambition driven by self-aggrandizement among its contending power blocs.
Even now, allegations of betrayal, vociferous proclamation of personal ambitions and dirty innuendoes about the imposition of candidates have started reaching an uncomfortable level in the party.
Regardless of the drama and subplots that have started unfolding, it is for the party and Nigerians generally to zero in on a candidate that has the right mix of persona, charisma, vision, discipline, awareness and courage to keep the party and the country in good shape post-2023.
The task may be daunting but what the party needs to do is clear cut. This is because the problems a post-Buhari president will confront are already here with us now.
One, with continuous fall in oil prices and a general lull in business activity since the outbreak of COVID-19, the economic realities have been worsened by the growing poverty and unemployment which has made upward social mobility unachievable for the wider population.
The National Bureau of Statistics (NBS) has continued to record staggering inflation rates, with food inflation and general cost of living growing out of hand and, according to the World Poverty Clock, nearly half of the Nigerian population currently subsists in extreme poverty. In fact, the Brookings Institute has predicted the figure to rise to 110 million by 2030.
Two, the generality of Nigerian citizens is disillusioned that the current administration has not succeeded in its efforts to deliver democratic economic gains, better governance, and tackle corruption and insecurity decisively. Thus, the loss of confidence in the government and the party is very high.
The initial public upbeat mood that greeted the government’s fight against corruption at incipient following the introduction of revolutionary measures such as the Treasury Single Account (TSA) to reduce leakages has, sadly, evaporated today, leading to growing frustration.
Three, more than ever before, Nigeria is looking incapable of taming the intractable insecurity situation in the land as citizens shiver due to increased attacks from bandits, kidnappers and terrorist groups. Kidnappings have reached a crisis point with increased scale and frequency. The call for the balkanization of the country along ethnic lines has also been gaining traction.
Arising from the growing citizen frustration, it is clear that whoever the party chooses to replace President Buhari in 2023 must have the dexterity, knowledge and empathy required to manage the potentially game-changing citizen advocacy led by a historically apathetic middle class that has woken up to bark and bite.
This awakened group will definitely offer a more coordinated and sophisticated challenge to the status quo than Nigeria has ever had to manage before. Of course, because social media and digital have also come to offer more ammunition for the citizens in their growing anti-establishment consciousness, it cannot be business as usual and the party cannot afford not to take into consideration these new paradigms and dynamics as it prepares for life in government after Buhari.
The challenge therefrom is that from its array of political gladiators that have indicated an interest in the job, APC has to pick the one that most fits the profile of a 21st Century public administrator and politically astute servant-leader.
Although it is a tough call, the party’s best materials, for now, appear to be Vice President Yemi Osinbajo, Senator Ibikunle Amosun and Governor Kayode Fayemi. In terms of finesse, experience, capability, age and ability to cross-connect the various critical population segments, the three stand out from the pack.
If APC is to respect and espouse the principles of fairness, equity and national cohesion by fielding a Southern candidate after President Buhari’s eight years, any of the three stand a chance of recreating and shoring up the party’s brand fortune.
However, it is an open secret in political circles across the South West that, unlike the Vice President and the Ekiti State governor who have been described by informed political watchers as tacit fallback options for the vaunted Ashiwaju Bola Tinubu ambition that appears to be hitting a political brick wall, Senator Amosun offers the party more gravitas and believability, especially among the segment of the population who still hold on to the notion that APC was created as a political vehicle to advance the personal ambition of the founding fathers and not to move Nigeria forward genuinely.
This is because out of the three gentlemen, it is only Amosun that is regarded as a true politician with a mind of his own and not creation and/or disciple of the Tinubu School of Politics.
Political watchers point to the fact that no one has been able to stick the disloyal, betrayer, Judas Iscariot and ingratitude labels on Amosun as done by the BAT crowd on the other two as a justification of the respect and political sagacity that the former Ogun State governor parades in the Southwest political space.
With a rapidly growing population and a younger generation of tech-savvy workers, Africa is poised to become the next global market leader.
Today, the continent’s population is over 1.4 billion. The advancement in technology, propelled by the urgent need to reconcile demand and supply has led Africa to work towards being increasingly competitive on the international scene.
Despite tremendous advancements in trade and improved financial accessibility and communication technologies, a huge part of the continent is still unbanked.
The circuit of internet accessibility and reliability is growing exponentially on the continent, but nevertheless, the majority of consumers still don’t have access to bank services. The reality is even worse when it is gender compared.
The UN Women data shows that approximately 1.3 billion women in the world are unbanked, of which ¾ of that population has never owned a bank account. There is no doubt that, to ensure traceability for microeconomic aggregates, it is important to be able to account for the population which constitutes that economic projection through their financial flows.
This has also been a huge impediment to e-commerce. Despite their willingness to operate on every corner of a given territory or continent at large, our population, especially women are still held back by this challenge.
Africa’s large unbanked population is mainly caused by poor infrastructures (transportation networks, communication networks), low literacy rate (that is the ability to understand and use certain services and technologies), government red tapes and myriads of technological barriers. Companies like Jumia, the leading e-commerce platform in Africa, however, have learned how to bypass this setback with services such as JumiaPay.
Data from penser, a specialist consulting firm focused on the payments and Fintech industry, outline that sub-Saharan Africa alone has the tremendous potential to house Fintech and e-commerce, as well as ensure their survival and continuity over time. This explains why the e-commerce leader in Africa, Jumia, founded mechanisms to overcome bottleneck challenges, as well as geographical and technological means to satisfy its ever-growing market in Africa.
With its presence in 12 African countries and the advent of the COVID -19, the market for e-commerce and Fintech was both challenged and faced significant changes. It was both a time to re-think and, re-invent the new normal of e-commerce for our unbanked population with limited resources, which is o also faced with geographical and sanitary barriers.
Generally, e-commerce greatly prospers in territories where the greater part of the consuming population has access to first; national IDs or any official document which will permit them to obtain or have access to banking systems (bank accounts, access to credits, bank cards etc); but also, most especially in areas where the population is ready to embrace new technologies and where the government has made available the necessary infrastructures and policies to welcome such companies.
The particularity with Africa at large is that e-commerce or Fintechs don’t only have to face government barriers, but internet penetration, geographical possibilities, education and also limited financial resources (of populations) to subscribe to these services.
In recent years, a more effective approach was developed by Jumia, that of mobile payments to replace payment on delivery. This did not only revolutionise the e-commerce sector but also how Fintech could better apprehend the problem of accessibility to the unbanked population.
As more people are beginning to use smartphones on the continent, it becomes easier for them to profit from online banking services without necessarily vising a bank. With JumiaPay, the main Fintech incorporated the technology of Jumia, customers can now recharge their phones, pay utility bills, make hotel reservations, book a ride, order food from their favourite restaurants and more.
Forging innovation yet challenging future ahead
This innovation comes at an important time as cash on delivery becomes more challenging and difficult to monitor. Also, it has created unprecedented access to unbanked populations in Africa, which reached its climax during the Covid-19 era as government barriers didn’t permit people to continue trading using the traditional methods (physical exchanges, supermarket purchasing just to name a few). The service gives users a high secured mode of payment, which puts them at the centre of every operation.
Once on the app, users can access it via their fingerprint or pattern lock. Also, no payment is completed on the app without sending an OTP (One Time Password) via a registered phone number or email. That way, the customer can be assured no unwanted transactions can be performed.
Furtherance, customers get an email for every transaction performed on the app, ensuring traceability, trust and accountability for all. These features have permitted more unbanked population to embrace Fintech services, but also to permit those who never wanted to let go of physical money to trust mobile money services. In this way, customers can follow their money online while reducing the stress on former banking systems.
Creating regulations that work for all
Over the past decade, Africa has gradually become the global leader in mobile financial services. This has been proven within the start-up ecosystem, which was largely driven by Fintechs, accounting for about 25% of funding attracted by start-ups in 2020[5].
Although this success is unevenly distributed on the continent with major markets in Nigeria, Egypt, South Africa and Kenya, regulators (governments and non-governmental) in emerging markets (Ivory Coast, Ghana, Senegal, Cameroon) are showing a strong commitment to the growing sector.
Fintechs have helped to boost financial inclusion on a continent where there are only five bank branches per 100.000 people, compared to 13 in other parts of the world. The Africa Financial industry summit for example has since called for an enabling environment and harmonised financial regulations to create sustainable innovation culture which will help Fintech firms expand their footprint in Africa.
Moreover, financial institutions such as commercial banks are now embracing Fintechs and partnerships with them, as the relationship is mutually beneficial: Fintechs need banks to scale and banks benefit from their innovation and service offerings as in the case of Jumia Pay.
Regulators are beginning to engage earlier with them, enabling the right environment to test their products and systems and offering support in risk management. They oversee consumer protection and protect depositors and financial stability by ensuring that they’re truly beneficial to consumers. This has been the case with countries like Morocco and Tunisia which are trying to catch up with the trend of Fintechs as an element of development.
A promising Africa for a sustainable and equitable development
Conclusively, Financial technology has never been this important and crucial during an era of sanitary challenges (that is Covid-19), as it has considerably helped in eliminating the need for cash and allowed customers to maintain physical distance from cashiers to reduce the risk of spreading the virus.
It has also helped SMEs that provide at home services to stay in operation, as their customer base could pay for goods and services remotely as in the case of Jumia pay. It is thus important that regulators (governmental and non-governmental), and the population, in general, be able to quickly embrace Fintechs.
Fintech is transforming the banking world and traditional business models and there is a clear growth potential for it in Africa, overwhelming regulatory hurdles remain a challenge which can be overcome, but it remains an essential part of all our futures, thus the need for governments, regulators, investors and entrepreneurs to work in symbiosis.
By Lerisha Naidu, Angelo Tzarevski, Sphesihle Nxumalo and Zareenah Rasool
Baker McKenzie’s latest Africa Competition Report 2022 provides a detailed analysis and overview of recent developments in competition law enforcement and competition policy in 32 African jurisdictions and regional bodies.
The report outlines how, over the past two years, African competition regulators have actively engaged in efforts to address pandemic-related challenges, but there has also been a general upward trend in competition policy enforcement across the continent.
This trend is highlighted by a number of significant recent developments in competition law regulation across the continent. Countries and regions with recent competition law developments include the Common Market for Eastern and Southern Africa (COMESA), Egypt, Ethiopia, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria and South Africa.
There were various developments with regard to COMESA in 2021. In February 2021, the COMESA Competition Commission issued a Practice Note in which it amended the interpretation of the term “operate”. Prior to this, a party “operated” in a COMESA Member State if it had turnover or assets in that Member State in excess of $5 million. This requirement has now been removed, effective from 11 February 2021, and a party will “operate” in a COMESA Member State merely if it is active in it (without a minimum turnover or asset threshold). The impact of this will be to make it easier for a transaction to fall within the scope of the COMESA merger control regime.
The COMESA Commission has also recently issued Draft Guidelines on Fines and Penalties, Draft Guidelines on Settlement Procedures and Draft Guidelines on Hearing Procedures.
In September 2021, the COMESA Commission issued its first penalty for failure to notify a transaction within the prescribed time periods, which penalty amounted to 0,05% of the parties’ combined turnover in the Common Market in the 2020 financial year. This was imposed in relation to the proposed acquisition by Helios Towers Limited of the shares of Madagascar Towers SA and Malawi Towers Limited.
In December 2021, the COMESA Commission imposed a fine for failure to comply with a commitment contained in a merger clearance decision.
The COMESA Commission also conducted eight investigations into restrictive business practices in 2021.
There were numerous recent developments in Egypt, including in November 2020, when the Competition Authority announced that the Egyptian Prime Ministry had approved the Prime Minister’s draft law amending certain provisions of the Egyptian Competition Law 3/2005.
In February 2021, the Egyptian parliament’s Economic Affairs Committee started the discussions on the new amendments. The Competition Authority has also recently initiated market inquiries in relation to multiple sectors including healthcare, food, electronic and electrical appliances, automotive, real estate, media and petroleum sectors.
In April 2021, the Economic Court of Cairo issued a ruling in a criminal case brought in March 2020 by the Competition Authority, against five individual poultry brokers for colluding to fix the price of chicken to the detriment of consumers and chicken breeders. The court fined each broker 30 million Egyptian pounds (approx. $1.6 million) for agreeing to fix the price of a kilogram of chicken.
In July 2021, the Competition Authority initiated a criminal case against two companies who agreed to submit identical offers in one of the practices of the General Authority for Veterinary Services, in violation of Egyptian competition law.
The head of the Competition Authority announced plans for the creation of an Arab Competition Network to enhance cross-border cooperation between antitrust enforcers in the Middle East. The ACN would be the first to provide Arab competition authorities with an official platform to meet and discuss prominent issues and impending changes to antitrust law. The network would be run by the 22 members of the League of Arab States, which includes Egypt, Syria, Lebanon, Iraq, Jordan and Saudi Arabia, among others.
In Ethiopia, the Trade Competition and Consumer Protection Authority is working on regulations to provide guidance on the application of the Trade Competition and Consumer Protection Proclamation (No 813/2013). Proclamation No. 1263/2021, which is expected to be enacted and come into force in 2022, transfers the powers of the Trade Competition and Consumer Protection Authority to the Ministry of Trade and Regional Integration.
In Ghana, a draft Competition and Fair Trade Practices Bill is before parliament for consideration.
The Competition of Authority in Kenya finalised its study into the regulated and unregulated credit markets in the country and issued its report in May 2021. The Authority further developed the Retail Trade Code of Practice 2021, in consultation with stakeholders in the retail sector, to address the abuse of buyer power issues arising from the sector. Also in 2021, the Competition Authority conducted a dawn raid in the steel industry and issued draft joint venture guidelines, to clarify the rules and filing requirements of joint venture arrangements.
The Competition Commission in Mauritius concluded a market study in the pharmaceutical sector on 8 June 2021.
There were numerous developments in competition law in Mozambique in 2021, including that the Competition Regulatory Authority became operational in January 2021. Regulations on Merger Notifications Forms were enacted by means of Resolution No. 1/2021 of 22 April 2021. The Regulations prescribe the different forms to be completed for merger notifications, as well as the details of the information and documentation required. Regulations on Filing Fees were enacted by means of Ministerial Diploma No. 77/2021 of 16 August 2021. Filing fees are currently set at 0.11% of the turnover of the parties in the previous year, up to a maximum of MZN 2,250,000 (approx. $35,000). Amendments to the Competition Regulations were enacted by means of Decree No. 101/2021 of 31 December 2021.
A Competition Bill is in progress in Namibia, and the Competition Commission expects to submit the final version of the Competition Bill to the Ministry of Industrialisation and Trade by the end of June 2022.
On 2 August 2021, Nigeria adopted the Merger Review (Amended) Regulations 2021, which set out new fees applicable for merger filings. The Federal Competition and Consumer Protection Commission launched and publicised an investigation into the alleged anticompetitive conduct of five companies in the shipping and freight forwarding industry in October 2021.
There were various developments in South Africa in 2021, including in May 2021, when the Competition Commission launched the Online Intermediation Platforms Market Inquiry, focusing on four broad online intermediation platforms and market dynamics that specifically affect business users – e-commerce marketplaces, online classified marketplaces, software app stores and intermediated services (such as accommodation, travel, transport and food delivery). The Inquiry is ongoing with a provisional report scheduled for release on 10 June 2022, and the final report scheduled for release in November 2022.
In April 2021, the Commission released its market inquiry reports on Land Based Public Transport. Furthermore, in April 2021, the Commission published its final report on an impact assessment study it conducted in relation to COVID-19. The report sets out the findings of the Competition Commission regarding the impact of the COVID-19 block exemptions and the enforcement work done by the Competition Commission during the pandemic. The Competition Commission’s fifth Essential Food Pricing Monitoring Report, which is released quarterly, focused on tracking the impact of the COVID-19 pandemic and consequent economic crisis on food markets.
In May 2021, the Commission issued, for comment, draft guidelines on Small Merger Notifications, which contain specific guidance applicable to the assessment of digital mergers.
Notably, 2021 was the year when the Commission prohibited a merger solely on public interest grounds, making it the first transaction to be prohibited on non-competitive grounds. Ultimately, however, the merger was conditionally approved before the Competition Tribunal.
In November 2021, the Commission released its Economic Concentration Report, which highlighted patterns of concentration and participation in the South African economy. The report includes details on the Commission’s power to launch market inquiries into highly concentrated industries, as well as its increased authority to impose structural remedies on businesses in these sectors.
In March 2022, the Commission issued Guidelines on Collaboration between Competitors on Localisation Initiatives, which are aimed at providing guidance to industry and government on how industry players may collaborate in identifying opportunities for localisation and implementing commitments related to localisation initiatives in a manner that does not raise competition concerns.
In March 2022, the Commission launched a market inquiry into the South African fresh produce market, which will examine whether there are any features in the fresh produce value chain, which lessen, prevent or distort the competitiveness of the market.
The Commission concluded various settlement agreements with market players (e.g., grocery retailers and laboratories) to reduce the prices of goods and services.
Lerisha Naidu, Partner, Angelo Tzarevski, Associate Director, Sphesihle Nxumalo, Associate and Zareenah Rasool, Associate, Competition & Antitrust Practice, Baker McKenzie Johannesburg