Investors update: Digital currency usage soars in Nigeria

Digital currency usage soars in Nigeria on cash shortages

Highlights

• Nigerians have increasingly turned to digital currencies to transact after a demonetization policy gave rise to a shortage of banknotes and bolstered demand for alternative payment methods.
• The value of eNaira transactions has surged 63% to N22 billion ($47.7 million) this year, while about 13 million e-wallets have been opened, a more than 12-fold increase from October, per data from the Central Bank of Nigeria. 
• The amount of currency circulating in Africa’s largest economy has meanwhile dropped to about N1 trillion from N3.2 trillion in September.

Source: Bloomberg (paywall)

Our Takeaway

Nigeria’s move to outlaw high-value notes might be the best thing that’s happened to digital payments in the country, at least since the Covid-19 pandemic. Prior to the CBN-released data on eNaira transactions, the Nigeria Inter-Bank Settlement System Plc revealed that the value of mobile money transactions jumped by a quarter to N2.5 trillion ($5.4 billion) within two months after October, when the central bank said it will replace 200-, 500- and 1,000-naira notes with new ones.

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Insurtech Turaco partners Airtel, Prudential on Uganda product

Highlights

• Kenyan insurtech startup Turaco has partnered with Airtel Money and Prudential in Uganda to launch Hospital Sente, a low-cost hospital cash insurance product with funeral benefits.
• The product is aimed at increasing access to insurance for underserved communities, and low-income individuals and families. 
• Turaco provides insurance solutions for emerging markets and is a distributor, broker, and key customer interface between the underwriter and the consumer. It achieves this through partnerships with tech-enabled companies with a large pool of consumers.

Source: Disrupt Africa

Our Takeaway

With a penetration rate of less than 3%, the majority of Africans are unreached by mainstream insurance, all while being the most vulnerable to financial shocks caused by illness, accidents, and death. Strategic partnerships like these remain critical to enabling underserved people to access affordable insurance that provides a safety net in their times of need and ultimately peace of mind. They also help players tap into a market valued at $68 billion and expected to grow 7% annually till 2025.

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Tunisian edtech attracts funding from Oman Technology Fund

Highlights

• Tunisia-based edtech startup Shape has raised an undisclosed amount of funding from The Oman Technology Fund (OTF).
• Founded in 2021, Shape operates a digital platform that allows professionals to access continuous learning training. Users of this platform can develop a personalized training plan that meets their career plan.
• OTF is an active investor in North African startups, from the recently acquired Tunisian gaming startup Galactech to Egypt’s Homzmart, Bekia, and SWVL.

Source: Wamda

Our Takeaway

The past few years have seen a rise in the adoption of Edtech innovation in Africa. With hundreds of millions of students in primary and secondary schools, technology presents a massive opportunity for improving education access and quality on the continent. Available projections indicate that the African Edtech market will grow into a multibillion-dollar industry in the next decade, driven by increasing demand for online learning solutions, e-books, and educational apps. However, significant challenges such as the digital divide and inadequate infrastructure need to be addressed to fully realize its potential in Africa.