Just Brisk It!

Joshua Dominic's hedge fund collapses, Lagos attracted $26.07 billion in investments within the last 2 years and Ethiopia decides to grant telecom licence to the consortium

Hello there,

How was your week?

So far 2021 hasn’t brought up any 2020-like surprises and that’s a good thing.

We’ll like to experiment with an idea we've been courting for a while. We already tell business stories, why not take a step further and tell you how it affects your wallet?

We’ll be exploring different topics on personal finance and having intelligent conversations. 

How does this affect the newsletter?

Not so much. It probably means it’ll get better. We’ll always work with a schedule that’s consistent and doable. It sure sounds like more work.

There’s already a lot of content out there, so we’ll curate mostly and create where we deem fit.

Going forward, we’re going to be connecting the dots between the week’s business stories and your wallet. And give you can’t-miss advice to help you live your best financial life. 

Just Brisk it!

I haven’t gotten over this meme, it’s a parody conversation between an investor and Dominic Joshua.

Meet Joshua Dominic

He’s the 21-year-old ‘Investment Maestro’ behind Brisk Capital, who is now in the custody of the Nigeria Police Force on a number of charges including investment fraud and stealing. He’s accused of carting away with ₦2 billion ($4.5) from over 500 investors. 

What did he spend it on?

When he wasn’t trying to invest it. He’s said

to have spent some of that money on parties, exotic cars, luxury watches, real estate in Abuja, Lagos and Port-Harcourt.

Wait, remind me how we got here?

After a year off social media, on the 19th of October, 2020 Joshua came back all fired up and pumped to connect and talk business, launched Brisk Capital - “a visionary group of companies…” We’ll just call it a hedge fund

And what were the juicy investment plans he offered?

  • Invest 60% of the total amount needed to get a car, house or start a business and by the end of the third month get 100% of the money.

  • Invest ₦500,000 (~$1,000) and get 30% return on Investment (ROI) every month for 3 months. 

  • Invest ₦5m (~$10,000) and over and get 15% ROI every month for 3 months.

Sounds juicy right?

Yeah, it did until it came crashing down when he couldn’t meet up with payments. 

Big Picture: Coming off a rough 2020, Joshua promised Nigerians returns that only a few companies dream of achieving in a year. 

As per, AFDB “Nigeria’s economy entered a recession in 2020, reversing three years of recovery, due to fall in crude oil prices on account of falling global demand and containment measures to fight the spread of COVID–19...the economy is projected to grow by 1.5% in 2021 and 2.9% in 2022, based on an expected recovery in crude oil prices and production.”  

Considering the state of Nigeria’s economy, it’s easy to attribute this to greed and also the blind trust in recommendations from friends and family.

Dig Deeper: Dominic Joshua's 'hedge fund' paid out 30% monthly returns. Then the scam unravelled

Final words: 

“The idea of having “enough” might look like conservatism, leaving opportunity and potential on the table.

I don’t think that’s right.

“Enough” is realizing that the opposite—an insatiable appetite for more—will push you to the point of regret.” — Morgan housel, The Psychology of Money

Lagos’ claim to fame

Lagos is the smallest Nigerian state by land mass but it has the highest population and attracts the most foreign investment. 

Earlier this week, the Lagos State Government tooted its own horns by saying it attracted $26.07 billion in investments within the last 2 years.

These investments, which are $17.75 billion in 2019 and $8.32 billion in 2020, made up 74% and 86% respectively of total capital inflows into the country.

The Lagos state government used this as a reminder of its ability to bring in, retain and leverage inclusive and sustainable economic growth.

On the flip side: As per FT, “On paper, Lagos, home to telecoms group MTN, the country’s largest banks and with a population of 22m, appears more attractive to investors. Lagos state’s gross domestic product of $84bn compares with Ghana’s $67bn, Rwanda’s $10.4bn and Kenya’s $95.5bn...But in the first three quarters of 2020, the latest data available, foreign direct investment into Nigeria trailed Ghana, which has an economy and population roughly seven times smaller. Nigeria ranks 131st on the World Bank’s ease of doing business list, compared to Rwanda at 38, Kenya at 56 and Ghana at 118.”

Dig Deeper: How Lagos loses out in battle for investors

Why it matters: There are different ways to look at the numbers. Compared to other Nigerian states Lagos is still king but in Africa, it’s losing its spot as the go-to destination for foreign Investors. Unsupportive government policies and lack of basic infrastructure are part of multiple factors causing investors to look elsewhere.

Ethiopia finally makes up their mind

After a lot of back and forth, Ethiopia decided to grant telecom licences to one of the two foreign telcos looking to operate in the country with 112 million people.

And the winner is…A consortium, which is made up of Vodafone, Nairobi-based Safaricom Ltd, CDC Group Plc and Sumitomo CorpEthiopia. They made a winning bid of $850 million.

The effect: Safaricom’s shares hit a record high after news of it acquiring the telecoms operating licence.

Back story: Only two companies placed a bid for this license: the Vodafone consortium and MTN. MTN made a bid of $600 million which was considered not good enough.

So what’s going to happen to the second licence? The government has called off the sale of a second licence. It’ll make some policy adjustments before opening it up again.

Why it matters: The licence award is a big step for Ethiopia as it marks the opening of its telecom sector to foreign investors. For years, the state-owned Ethiotel has held a monopoly on the telecom sector but will now have competition. 

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Quote 💭

"We hold on to the old competencies and our hard-earned status roles far longer than we should. The only way to be creative is to do something new, and the path to something new requires leaving something else behind."

– Seth Godin