We Wish To Take You Out By Force 😈
CAMA 2020, coup d'etat in Mali, Logistics in Africa
Good Saturday morning,
If one of the highlights of last week was Russia announcing a Vaccine for COVID-19, then for this week it would be Madagascar’s Health Minister being fired a month after seeking international help to deal with the surge of cases. This is despite being the first country to announce finding a cure for COVID-19. A reminder, Winning doesn’t always mean being first.
Another reminder: Expect our monthly newsletter to come in on Wednesday, 26th August by 7:15 am WAT.
CAMA 2020: Doing business is getting easier
Amidst the many criticisms, the Nigeria government scored major points with the introduction of the New Company Allied Matters Act (CAMA) - the law that regulates company formation administration and financial reporting in Nigeria.
Tell me more
It’s the first update in 30 years, as an earlier attempt in 2018 didn’t work out. This new law has 870 provisions as compared to 612 in the previous one. Out of which 167 are new provisions, and 91 are modified.
Going through 258 additional provisions is quite a lot to process so we’d highlight a few and some that have been misinterpreted.
Setting up a business
Single shareholder: One person can now incorporate a private company as opposed to the previous one where the minimum was two persons. Talk about owning everything! And in case you want to partner up, there are new options available.
It is no longer mandatory for companies, mostly SMEs to have a company seal, secretaries and auditor. Companies now get to decide whether or not to have one.
The claim that it requires all international businesses "except the Chinese business" to be registered is incorrect. There’s nothing like that.
Running a Business
Every public company has to keep its audited accounts displayed on its website. Finally, we can see how you’re really doing.
To foster better corporate governance, the office of Chief Executive Officer and Chairman of a public company cannot be held by the same person. Public companies must also have a minimum of 3 independent directors. Remembering the words of Lord Acton, Power tends to corrupt, and absolute power corrupts absolutely.
Shutting down a Business
The new CAMA does not say that only members of Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) can work with companies facing financial distress (Insolvency practice). It says in addition to being a lawyer or accountant or another relevant discipline, you are authorised either by BRIPAN OR Other professional bodies to act as an insolvency practitioner.
These changes come into effect only after this act has been gazetted - formally announced as law. A most likely date for this is Oct 1st, 2020.
Why it matters
This new act makes it easier for people to legally start and run a company in Nigeria. With 65% of businesses in Nigeria operating in the informal sector -- the part of the economy that’s neither taxed nor monitored by any form of government -- formalising the informal sector is critical to economic growth. This new act coupled with the recent Finance Act are positive steps towards making it easier to do business in Nigeria.
A Work in Progress: There have been many responses to the new act, often misinterpretations. In all, it’s important to note that there are still some grey areas that need to be ironed out via the inclusion of guidelines or future amendments. There’s no perfect law anywhere in the world.
Dig Deeper: Read the 2020 CAMA.
We doubt you’d pore through 604 pages of pure legalese. Another option is to listen to a conversation between relevant stakeholders. It’s kinda long too but there’s no shortcut yet to figure this out.
We Wish To Take You Out By Force
National Committee for the Salvation of the People led by Colonel-Major Ismael Wague. Photo: The Africa Report.
Mali is about hit refresh. There has been a military intervention that should finally lead to a fresh start for the people but first, it cost the country their elected president Ibrahim Boubacar Keïta.
How did it start?
In what seemed like a meeting amongst soldiers at an army based camp near Bamako, the Mali capital, these military soldiers who are also identified as members of the National Committee for the Salvation of the People (CNSP), moved to the president’s house and detained him. Few hours after his illegal detention, the president announced his resignation on national television.
This has happened before, right?
Yes! Mali has suffered droughts, rebellions, a coup and 23 years of military dictatorship until democratic elections in 1992. 2012 saw another military intervention after a plot began because of anger following lack of resources for soldiers to fight insurgencies in the northern part of the country. Back in 2012, non-commissioned officers (NCOs) led the coup with resistance from citizens but this time higher-ranking military personnel took charge of events and the Malian people were happy about it.
‘Soldiers of democracy’
This military takeover is capitalised by the frustration and long-time cry of citizens for Keita to resign. After he was elected president in 2013, Keïta won a second term in elections in 2018, but since June he has faced huge street protests over corruption, mismanagement of the economy and disputed legislative elections.
Against the United Nations’ order to return to their military roles, the soldiers say they plan to set up a civilian transitional government and hold new elections.
International Interventions: A mediation mission by the West African regional coalition of the Economic Community of West African States (ECOWAS) and the visit from a group of five West African leaders including presidents of Ivory-Coast, Ghana, Niger, Nigeria and Senegal failed to crack the rip-off between the now ex-president and the angry people of Mali.
What this means for Mali
The country will now suffer suspension from all the decision making bodies of ECOWAS and neighbouring nations have been advised to shut their land and air borders with Mali as well as economic trade and financial transactions with Mali to prevent the situation from degenerating. The African Union is also suspending Mali until constitutional order is restored in the country.
Bolt, Bongeni and Logistics in Africa
Increased connectivity through mobile-internet penetration and pandemic behaviour on the African continent has led to an increase in e-commerce activity. Consumer spending in e-commerce across the continent is projected to reach US$2.1 trillion by 2025. The rise in e-commerce activity has reflected on the logistics sector as business done online has to be completed in real life.
According to the African Tech Startups Funding Report by Disrupt Africa, logistics startups had a decent 2019.
About 23 logistics startups secured investment
Total funding valued at US$69,627,000, an increase of 264.6% from previous year.
In all, logistics startups were second only to fintech startups in size of total investments. From 2016 till now, investments in this sector have grown at a massive 6,746%! This year alone,
16 logistics companies have received around US$40 million in funding so far.
Bolt and Bongéni
In related news, Taxi hailing service Bolt is venturing into the food delivery business in Kenya to leverage on reduced mobility in finding alternative revenue streams. This decision is further justified as Bolt's competitor Uber recently released financials (Q2) showed that its delivery more than doubled while ride revenue declined.
Mauritian tech startup, Bongéni, has launched an online platform offering an Uber-style transportation marketplace matching individuals and businesses seeking moving and home delivery services with an independent fleet of drivers using different kinds of vehicles.
While there has been a lot of activities happening in this sector, some underlying challenges still remain. For example, logistics account for up to 75% of the price of goods on the continent in comparison to 6% in the US and Europe, due to a lack of transparency, coordination, and information availability.
Street naming and house numbering systems are still very inaccurate and most times, non-existent. Another challenge exists in irregular routes and sudden road closures, in some locations, the internet is not reliable so delivery companies are unable to use location apps to find direction.
For big businesses, outsourcing deliveries to specialist local delivery companies can help solve this problem as these companies build their databases and understand local terrains. Contacting recipients before making deliveries can slightly ease this concern as well.
A possible impact of these recent activities on the continent would be the professionalisation of the transport sector, creating an avenue for informal drivers and transporters to become part of a more formalised economy, opening up opportunities for financing and credit.
Worth reading 📚
A great advantage can be found in accepting hard truths faster than others.
— Shane Parrish
Thank you for reading this week’s edition 💙