Hello there,

1,487

That’s the total number of cars destroyed in making Fast & Furious movies from the first movie all the way up to Furious 7. Even at a modest cost of $20,000 per car that’s $30m spent on only car props.😲

All eyes on Mobile money 

Who needs a bank account when you have a phone number?

Airtel Africa’s recent financial report for the year ended March 31, 2021, revealed that the company’s revenues are up by 14.2% to $3.8 billion and its profit of $415m rose slightly by 1.8% from the previous year. 

But by far the biggest leap was its mobile money unit (mobile phone-based financial service) which grew by 35% from $311 million in the previous year to $401 million. 

Now that’s huge!

The cause: Airtel said it increased the number of mobile money agents by 30.7%, kiosks by 68.8% and mobile money branches by 95%.  Looks like Airtel just took away someone else’s Lunch. 

Zoom out:  Last month both MTN and Airtel hinted that they’ll run their mobile money units/list as separate entities to allow it to earn a proper valuation. MTN is eyeing a valuation of $5B, while for Airtel something close to $3B. Mobile Money is a big deal! In 2020, the number of registered mobile money accounts grew by 12.7% globally to 1.2 billion. Sub-Saharan Africa added 43% of all new accounts - the most users last year. 

And in Ethiopia, the story is sorta similar

Ethiopia’s Prime Minister Abiy Ahmed, mentioned earlier in the week that the government excluded mobile money from the terms of the telecoms licenses it made available for public bid. This meant it had to give up about $500 million in license fees.

Remind me, how did we get here?

For the longest time, Ethiopia has had just one mobile operator, the state-owned Ethio Telecom. Recently the government decided to open up the telecom space for other players to come in.

After a lot of back and forth, two weeks ago, Ethiopia received bids for telecommunications licences from MTN Group and a consortium led by Vodafone Group.

Back to giving up on $500m

If that didn’t sound right to you, then it will when you hear that Ethio Telecom launched a mobile money service called telebirr. This means Ethiopia wants to open up its telecom space but keep mobile money run by the state.

On the bright side: It’s expected to make a difference in Ethiopia where the banking system is seen as inefficient with 19 commercial banks serving a population of about 115 million. Ethio Telecom said it had 1,600 agents with plans to increase to 15,000 within a year.

On the dark side: A lack of competition leads to complacency.

Question: What are banks doing about all these mobile money moves? 

In other related news: Kenya’s Safaricom Plc is in talks with Amazon.com Inc. about the use of mobile-money service M-Pesa on the e-commerce giant’s platform.

Things don Cost

Nigeria generated a total of ₦496.4 billion ($1billion) from value-added tax (VAT) in the first quarter (Q1) of 2021, according to the National Bureau of statistics. VAT is that tax that is placed on goods, or products in each chain of distribution or supply where there is a value-added to it. 

It was 9.2% higher than ₦454.69 billion generated in Q4 2020 and 52.9% above ₦324.6 billion realised in the same period last year. Manufacturing and professional services contributed the most to the VAT. 

The cause: Nigeria increased VAT by 50% (from 5 to 7.5%) last year. The new rate came to effect on February 1, 2020. 

What else has increased?

Uber fares. Almost a month after Uber and Bolt drivers under the Professional E-hailing Drivers and Partners Association (PEDPA) umbrella held a strike in Lagos, Uber has raised its prices by about 13%.

The new pricing system: Between 8:00 am till 12:00 pm on Mondays, and 8:00 am till 12:00 pm on Tuesdays through Friday, Uber riders will now pay a base fare of N237, minimum fare of N538; N70 per kilometre and N12 per minute. These fares are up from the previous minimum fare of N500, N200 base fare, N50 per kilometre and N11 per minute.

At other periods, riders will be charged a minimum fare of N575; a base fare of N255, N75 per kilometre and N12.5 per minute.  Phew! It’s quite a computation.

What do the drivers think? They’ll rather have Uber reduce the commission charged than increase the fares.

Inching closer to profitability

African eCommerce giant Jumia’s current share price ($21.15) might not be encouraging. It’s the lowest share price this year compared to its all-time high of $65.51. But it’s Q1 result hints that its share price would be back up if it keeps on delivering results like this.

The Result

Revenue: It made $33 million, down 6.4% from $35 million in Q1 2020.

Gross Merchandise Volume (GMV): GMV which measures all the goods sold on the platform, was $200 million, which is down 13% from the same period last year. It’s down because Jumia has repositioned its business and now primarily sells household products that cost a lot less money than high-ticket items. 

Active customers: 6.9 million, increasing from 6.4 million customers from the same period last year. 

Operating losses: $41 million, down from $53.1 million for the same period last year. 

Jumia Pay: Jumia’s own payment channel increased total payments volume by 21% from $43.2 million in the first quarter of 2020 to $52.2 million in Q1 2021. Overall, 36.7% of orders placed on the Jumia platform in the first quarter of 2021 were completed using JumiaPay, compared to 35.5% in the first quarter of 2020. There are hints that it’s using the data available to offer loans to merchants.

Big picture: As Jumia cuts down on its losses and adds more customers, it sure is closer to reaching profitability.

Worth reading 📚

• Seerbit's Omoniyi Kolade wants financial inclusion for all Africans

• Play Your Own Game 

Quote 💭

“The significant problems we have cannot be solved at the same level of thinking with which we created them.”

– Albert Einstein