Investors update: Nigeria's monthly inflation hits seven-year high on food prices
3 min Read July 17, 2023 at 1:03 PM UTC
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Nigeria’s monthly inflation hits seven-year high on food prices
Highlights
- Nigeria’s monthly inflation rate soared to a seven-year high in June, after President Bola Tinubu scrapped fuel subsidies and allowed the currency to weaken before declaring a state of emergency to control staple food costs.
- Prices rose 2.1% in the month, the most since May 2016, and annual inflation quickened to 22.79% from 22.4% in May.
- The inflation figure, according to the data published on the National Bureau of Statistics website, was less than the median estimate of seven economists in a Bloomberg survey of 23%.
Source: Bloomberg
Our Takeaway
Tinubu announced the removal of the petrol subsidy upon his inauguration into office. Barely three hours after the speech, fuel prices across the country surged by an average of 174.6% from their then price a month ago. The inflation rate of 22.79%, a new 17-year high, suggests the increase in energy costs is beginning to reflect in the prices of transport and food, contributing to inflationary pressures and raising inflation expectations in Africa’s biggest economy.
Egyptian fintech Flash raises $6m seed round
Highlights
- Egypt-based fintech Flash has completed a $6 million Seed round led by Addition with participation from Flourish Ventures and other angel investors.
- Founded in 2021 by Erik Gordon and Sherine Kabesh, Flash is a payment application that provides cashless payment solutions for consumers and businesses through a scan-and-pay service.
- This funding will be used to accelerate Flash’s product development and customer and business acquisition in Egypt.
Source: Wamda
Our Takeaway
Although the digital payments landscape in Egypt has grown in recent years, with the rise of e-wallets and cards, around 80% of goods purchased online are still paid cash on delivery. Consumers tend to prefer getting the product before paying; however many businesses do not provide a POS option on delivery. Therein lies the gap that Flash is looking to fill; with its service, customers can simply scan a QR code presented by a delivery representative. The solution reflects rapid fintech innovation in Egypt, where 64% of people increased their adoption of digital payment solutions last year while mobile phone wallets reached 46,500 per 100,000 people, according to Mastercard.
Access Bank to acquire StanChart’s subsidiaries
Highlights
- Access Bank has completed negotiations to acquire the sub-Saharan subsidiaries of Standard Chartered Bank for an undisclosed sum. This acquisition is in line with Standard Chartered’s plan to divest its businesses in Africa.
- The deal includes the sale of Standard Chartered’s stake in subsidiaries in Angola, Cameroon, Gambia, and Sierra Leone to Access Bank.
- Additionally, Access Bank will acquire its consumer, private, and business banking business in Tanzania. The deal, which is to be completed by 2024, excludes the sale of the bank’s Nigerian subsidiary.
Source: African Markets
Our Takeaway
Nigeria’s largest bank by asset and customer base, Access Bank has expanded its pan-African footprint significantly in the last few years through acquisitions. In 2021, it acquired a majority stake in BancABC of Botswana, offsetting the most active day in the history of the country’s bourse, the Botswana Stock Exchange. Per Tracxn, the bank had made 8 acquisitions before the StanChart deal, spending more than $285 million on those deals. With this latest move, the bank should see its value skyrocket as it takes a more prominent position in the African banking scene.
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