It Takes Three to Tango

Netflix adjusts African strategy

Hello Good morning, 

There are only 90 days left in 2020. More than enough time for a lot of good to still happen this year.

Looking for something (about history) to watch this weekend? Watch Journey of an African Colony

👋 We’d be showing up in your inbox on Wednesday --7th Oct -- morning with something different. Read it here

Nigeria @ 60

Anniversaries are a time many reflect on the journey so far, this reflection stirs up mixed emotions. For many Nigerians, celebrating 60 years post-independence wasn’t anything special. It was just another day most people were glad to not be ‘working’ or at work.  

President’s Speech:  A lot of motivation with a line that got most people angry.

But we will not dwell on that. Here a few other happenings.

Temporary reversal of electricity tariff: To avert the national strike slated for September 28th by the labour congress, the increase in electricity tariff was reversed for 2 weeks.  It can only be temporary because the increase in tariff is a requirement for loans. 

Second medical grant: Nigeria got another medical grant of 1 billion Yen ($9.4m) to provide medical equipment in times such as this. 

$200m credit alert soon!

Remind me, how did we get here?

It all started in January 2010 when the federal government entered into a 20-year gas and supply processing agreement (GSPA) with P&ID to build a gas processing facility. Under the agreement, Nigeria was to receive 85% of the refined non-associated gas, free of charge, for power generation and industrialization. While P&ID would receive the remaining 15% and the by-products – namely methane, propane and butane – which it would export.  

Looks like a sweet deal...

But there was an initial obligation on the country — the GSPA required the government to build a gas supply pipeline to the P&ID facility. This is where it all fell apart. 

The government somehow, for some unknown reason, didn’t fulfill its end of the bargain, and P&ID after spending about $40m on the project, decided to take FG to court. When it was looking like P&ID would win, the Nigerian gov't decided to settle the case outside court agreeing to an initial settlement of $1.5b which was later reviewed to $850m. 


It’s 2015 Buhari comes into power, with promises of change, in need of money but he senses something is fishy and ignores the $850m settlement opting for more.

After years of this case lingering in court, finally, the court has declared that Nigeria has proven that the contract was procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria.

If this victory is sustained, it’s a good one for foreign exchange which is in high demand right now 

Finally, If you want to visit Nigeria or leave (cos you’re tired), there are new visa fees & policies waiting for you. 

Netflix adjusts African strategy

For Netflix in Africa, business has been slower than expected so it wants to change that.

Huh, How so?

Out of Africa’s population of 1.2 billion people, Netflix has barely 0.11% (1.4m)  as subscribers, even though the continent has 1.2 billion people. When compared to African pay-tv (Dstv, GOTv & Showmax) for Multichoice Group which has nearly 20 million subscribers, the difference is clear.

Piracy still rules, with Netflix-only movies being hacked and offered on other platforms where they can be downloaded for free. Also, let’s not forget that sharing Netflix details with multiple people (friends of friends of friends that aren’t really your friends) is also trimming off some amount of revenue. 

What’s next?

Ensure every person using the platform actually pays for it. It’s offering a mobile-only service at NGN 1,200 ($~3) a month, that’s more than a 50% reduction from the NGN 2,900 it currently charges for the most basic account. But also higher than the ~250 naira a month charged by streaming platform Iroko.

Why this matters

Lower Price: Coming into Africa, Netflix has been more focused on high-value content, in contrast to the low production value that’s typically found in Nollywood. But if the people can’t pay for high-value content, maybe it’d be worth giving them some less value content.

Payment plan: To reduce the friction in getting paid, Netflix has partnered with South African telcos to add subscriptions to people’s phone bills and offer prepaid vouchers for those who do not have bank accounts. Now that’s how you ensure you get paid!

It Takes Three to Tango

Funded by the World Bank, Uganda, Tanzania, and Rwanda are making plans to create a joint-stock market where local investors will be able to buy and sell stocks across those three countries with ease. The move will see the three countries create a stock exchange with a combined market cap of around $15 billion. The project has been going for nearly a decade and is expected to become operational by the end of the year.


A bunch of stuff. For one, companies listed on the joint exchange can have access to a larger pool of capital and investors.

Having to deal with different stockbrokers when trading across different increases commission costs (3.28% in Uganda and 1.5% in Rwanda and Tanzania) and completion time.

There is also low business volume on individual exchanges, making it difficult to support local markets with their own trading system and market analysis.

Deja Vu?

The joint-stock market in East Africa follows in the steps of Bourse Régionale des Valeurs Mobilières, a stock market consolidation in West Africa. The Abidjan-based electronic exchange connects Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal, and Togo.

What could’ve been

Kenya, East Africa’s largest economy pulled out of the project in 2015 over perceived irregularities in the awarding of software contracts. However, it will still have a prominent presence on the new stock exchange given to Kenyan financial services companies, including KCB Group and Equity Group as well as Nairobi-headquartered East African Breweries, are cross-listed on all the individual exchanges and will be among the most valuable listed companies.

Zoom Out

The coming together of smaller stock markets agrees with the popular opinion that many of sub-Saharan Africa’s economies are not liquid enough to support major listings. For example take a look at Jumia’s high-profile IPO in New York, Kenya-based music startup Mdundo in Denmark and Naspers, Africa’s most valuable company, choosing to list its international internet assets on Amsterdam’s stock exchange

Government authorities in Tanzania, Uganda, and Rwanda will be hoping that the move incentivizes trading as well as boosts investment in the country. Investors will be hoping the government helps to increase return on their investment by implementing policies that enable these companies to thrive.

Worth reading 📚

Does US military training incubate coups in Africa? The jury is still out

Put Your Metrics Where Your Mouth Is

Obvious to you. Amazing to others.

Quote 💭

Go smaller.

Can't learn an exercise? Reduce the range of motion.

Struggling to grasp a new concept? Break it down.

Failing to stick with a habit? Make it easy.

Master stage one, then advance.

— James Clear

Thank you for reading, Do something goofy this weekend 🤡