It has been a year of reckoning: a year that lit a fire beneath online payments in South Africa, transforming eCommerce while creating immense economic pressure.
As the global pandemic waged war on government process, merchant sales and consumer behaviour, companies were faced with tough decisions and mercurial markets that reshaped how they worked, innovated and delivered services. It was tough and it was brutal, but it was also a year that has taught the retail sector essential lessons in online engagement and created opportunity amid the complexity of a pandemic.
eCommerce diamonds made under pandemic pressure
South Africa underwent one of the world’s most rigorous lockdowns. Essential goods were the only eCommerce items allowed to go on sale, and many companies were put at risk of closure. Some survived, many did not. At this time, the eCommerce Forum South Africa (EFSA) worked with the government to effectively and safely reduce the restrictions on commerce to help ignite the flailing economy and establish a fresh baseline for growth in a pandemic-powered world.
This saw significant innovation and shifts in approach and perspective, particularly in the eCommerce arena. Retailers adapted quickly, with Checkers Sixty60 and Zulzi changing the way that groceries were bought, while Uber shifted people’s experience of public transport and the delivery of food and other essential products.
For those retailers that were unable to keep up with the demand, collaboration became the word of the year. Pick ‘n Pay, for example, partnered with Bottles to introduce same-day delivery services to its customers – a relationship that was so successful that it saw the retail giant buying the delivery service - while OneCart partnered with Exclusive Books and HP to achieve the same levels of delivery efficiency.
Move to mobile payments gains momentum
Along with the rise of app-based and online shopping experiences, there was significant growth in mobile transactions, with tap and go becoming increasingly relevant to safety-conscious South Africans looking for seamless cashless payment solutions that are trustworthy and easy to use.
PayU saw an impressive move to mobile payments with up to 85% of transactions completed on a mobile device in 2020, compared to 50% in 2019. This rapid increase in mobile payment usage correlates to the massive increase in smartphone penetration in South Africa, with the Independent Communications Authority of South Africa (ICASA) reporting in the 2020 State of the ICT Sector report that smartphone penetration has risen by 9.5% over the past year.
In addition to increased usage of mobile devices and payments, there has been a shift in how customers approach mobile payment platforms. They want tools that engender trust, that minimise the risk of fraud and theft, and that allow them to do more than just pay for online shopping.
This change in consumer attitude is also changing access to financial services and solutions. From the micro enterprise to the corporate building foundations in a rural community, digital payment solutions offer people access to banking services and cash management tools that previously would have been out of their reach. The more people gain access to digital financial tools that are secure and affordable, the more they are empowered to grow, reach new markets, and improve their financial acumen. Digital payments are tearing down the barriers to financial inclusion and giving SMEs and communities improved opportunities for growth.
Cashless payments come into their own
Of course, in addition to the ongoing pandemic, there are challenges that must be overcome to ensure growth. Merchants need more opportunity to expand online, buoyedby improved access to education and support. With the right information and understanding, they could flourish online if they have access to the right assistance and guidance from the outset.
For consumers, fraud and security remain a high concern and priority. To drive growth in the eCommerce sector, merchants need to invest into payment platforms that showcase their investment into tools such as 3D secure and that put security at the forefront of development.
As the country moves towards 2021 and the ongoing limitations presented by the virus and related restrictions, there are also opportunities among the challenges. The first is to find ways of capitalising on the new African Free Trade Area agreement scheduled to come into effect on 01 January 2021. The agreement allows for impressive business reach into new markets and, as Africa is a significant market for remittances, this is a chance for merchants to expand their ecommerce footprint into cross-border trade with the right infrastructure, regulations and payments in place.
Another development that has seen growth in 2020 and will continue its trajectory in 2021 is QR payments. These have become far more ubiquitous over the past year with many companies investing into QR-powered mobile solutions thatmake payments simple, quick and accessible. From Samsung to Apple to Snapscan, the scale and use case for QR codes will continue to evolve. It’s a digitally-driven solution that capitalises on consumers’ need to shop fast and pay even faster, while presenting new ways of selling goods and services across multiple platforms. QR codes are being used by leading payment platforms to expand South African access to alternative payment solutions that suit their needs, lifestyles and business models.
Finally, one of the biggest and most essential changes we need to see in 2021 is reductions in the cost of data and access to affordable connectivity. Already, significant strides have been made in this arena, but data and internet access costs need to fall even further to reduce the barrier to entry, improve eCommerce growth, boost mobile usage, and increase access to inclusive financial services. This will drive growth and economic stability while further allowing for the market to cement its digital foundations and translate the complexities of the pandemic into long-term opportunities.
From digital payment platforms to security innovation to reduced costs and improved payment capabilities, 2021 is the year that will take the card tap to the mobile device and grow the economy in the right direction.
The Luozi pharmaceutical research centre (CRPL), on Tuesday, approved the “MANACOVID” drug to treat the coronavirus (COVID-19) in DR Congo.
A statement issued in Kinshasa said the results were observed by three teams of doctors on a total of 300 cases that tested positive to COVID-19.
All these cases proved negative with the disappearance of symptoms and a good tolerance, within five days of treatment or 100 per cent recovery.
Approved on 24 November 2020, with a certificate of invention as evidence, “MANACOVID” is a product based on local medicinal plants. It was discovered in March 2020 by Congolese chemist-doctor, Etienne Flaubert Batangu Mpesa, following his work with a team of pharmacist researchers, the statement said.
MANACOVID is one of three projects selected and recommended by the Ministry of Scientific Research and Technologic innovation since 14 April 2020, for clinical tests.
Before its approval, all the processes were respected, particularly the approval of the MANACOVID protocol by the National Health Ethics Committee (CNES).
The clinical tests were carried out from June to October 2020 through three independent teams of Congolese investigative doctors registered with the DRC Doctors Order under the coordination of a principal-investigator.
Pharmacist Etienne Flaubert Batangu Mpesa graduated at Lovanium University since 1971, now University of Kinshasa (UNIKIN). He became a teacher of Pharmaceutical sciences at Montreal, Quebec/Canada University in 1980.
Mpesa, now chairman of the board of directors of CRPL, is the inventor of the products Manadiar (against amebic diarrhoea) and Malaria (anti-malaria).
Various factors have led to the closure of United States Commercial Banks by almost 50% over the last twenty years.
Data acquired by Finbold.com indicates that the total number of Commercial Banks in the U.S. has dropped by 45.65% since 2000. At the start of the century, the number stood at 8,315, while in 2020, the banks are projected to stand at 4,376. Our calculations show that the U.S. has lost Commercial Banks at a yearly rate of 3.15% on average.
The research also overviewed the Net Income of the U.S. Commercial Banks between 2000 and 2019. Despite the dropping number of Commercial Banks, they have recorded a surge in Net Income by a whopping 207.38%.
In 2000, the Net Income was $70.79 billion, while in 2019, the figure stood at $217.6 billion. The lowest Net Income was recorded in 2009 at -$11.61 billion. The record drop in was registered in the wake of the economic crisis that hit the world.
The closure of Commercial Banks in the U.S. has mainly been influenced by changing consumer preferences and improvements in financial technology. In the recent past, customers have increasingly turned to ATMs, online banking, and mobile apps to conduct routine banking business. This means that banks can close less profitable branches without sacrificing market share.
As the data indicates, during the 2009 economic crisis, the U.S. Commercial Banks’ net income significantly dropped. It is worth mentioning that in 2020, the coronavirus led to a global financial crisis. If there is a drop in Net Income, it will not be of the same magnitude a decade ago since most banks relied on technological solutions to keep serving customers. Notably, most banks innovated new products, specifically catering to digital customers.
The pandemic is also set to accelerate bank closures in the U.S. During the crisis, closing branches is seen as a way of preserving capital during the challenging operating environment, which improves earnings and grows capital. In general, the pandemic has forced banks to redesign their branches or shrink their branch footprints. Potentially, the crisis will have a lasting impact on the banking industry.
The banks’ closures have also been accelerated after the 2009 economic crisis mostly due to a wave of mergers and acquisitions (M&A). The crisis offered an opportunity to reduce cost through the shuttering of inefficient office locations. The crisis further forced most banks to suspend their operations following earning pressure from low-interest rates and rising regulatory costs.
As more consumers migrate digitally to do general banking, banks with large branches are working rapidly to stem the damage. Most banks continue to prepare for closures by appointing digital ambassadors to educate customers inside their branches on the various digital options at their disposal. From this perspective, banks are actively encouraging customers to use digital channels to conduct their business.
From the trend, it is inevitable branch closing trend will continue as consumer preferences evolve and financial technology becomes incorporated in people’s lives.
It seems inevitable that consumers and businesses will increasingly access banking services with the help of technology. Although some banks are expanding in branches, the number has failed to match closures.
Central Africa Republic former President Francois Bozize has said that he ‘accepts’ election bar. His country’s top court a fortnight ago rejected his candidature in forthcoming elections because he is being sought for alleged murder and torture and is under UN sanctions.
The ruling was handed down by the Constitutional Court, which also rejected three other candidacies for the December 27 vote.
Bozize, whose overthrow in 2013 marked the start of CAR’s descent into conflict, has been seen as the only major rival to incumbent Faustin-Archange Touadera.
In its ruling, the court said it would not accept Bozize’s candidacy, “given that the candidate is the target of an international arrest warrant” filed by the CAR in 2014 “for murder, arbitrary arrest, sequestration, arbitrary detention and torture.”
It also noted UN measures against Bozize, which meant that he failed to meet “criteria of sound morality in the electoral code.”
The United Nations placed Bozize on its sanctions list in 2014, freezing any assets he held abroad and banning him from travel, on the grounds that while in exile he had been supporting militia groups guilty of “war crimes and crimes against humanity.”
The CAR, landlocked and impoverished, is one of the most volatile countries in Africa.
Rival French and Russian disinformation campaigns have sought to deceive and influence Internet users in the Central African Republic ahead of an election later this month, Facebook said on Tuesday.
Facebook said it was the first time it had seen foreign influence operations directly engage on its platforms, with fake accounts denouncing each other as “fake news”.
The company said it had suspended three networks totalling almost 500 accounts and pages for so-called “coordinated inauthentic behaviour”. One network was linked to “individuals associated with French military,” it said, while the other two had connections to “individuals associated with past activity by the Russian Internet Research Agency” as well as Russian businessman Evgeny Prigozhin.
The French defence ministry and military command did not immediately respond to requests for comment. Representatives for Prigozhin, who U.S. prosecutors say directed the Internet Research Agency to meddle in the 2016 U.S. election, did not immediately respond to requests for comment. He denies the U.S. allegations.
“You can’t fight fire with fire. We have these two efforts from different sides of these issues using the same tactics and techniques, and they end up looking sort of the same,” said Nathaniel Gleicher, Facebook’s head of cybersecurity policy.
France and Russia are both keen to assert influence in Africa. Paris has ties with many French-speaking African countries, which it sees as vital to preventing the spread of violent Islamisation, and Moscow is jockeying for position in a lucrative market.
Facebook said the two campaigns largely focused on the Central African Republic (CAR), which votes on Dec. 27, but also targeted users in 13 other African countries including Algeria, Cameroon, Libya and Sudan.
Ben Nimmo, head of investigations at social media analytics firm Graphika, said both campaigns used fake accounts to pose as local people, sometimes sharing doctored photos.
The French effort started in mid-2019 and pushed pro-French messages before targeting “Russian fake news” following Facebook’s suspension of a Russian-linked disinformation campaign in Africa in October last year.
The subsequent Russian operation attempted to promote Russian business and diplomatic interests, as well as the candidacy of President Faustin-Archange Touadera in the election, he said. Later, the Russian accounts tried to out the French accounts that were trying to out them.
But neither side built a significant audience in CAR, he added. “They looked like two troll teams arm wrestling, with nobody else really paying attention.”
In response to the economic devastation caused by the coronavirus pandemic, most sub-Saharan governments are developing economic recovery plans.
These will require some different thinking, particularly when it comes to agriculture. Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa, explains to Michael Aliber, a professor of agricultural economics at the University of Fort Hare, what that new thinking might look like.
You have argued that governments should use the post-COVID environment to think differently about agriculture. What should be done differently?
African governments should have a fresh look at agriculture. This involves embracing technology (information technology, mechanical and biotechnology) and also private sector partnerships. There also needs to be confidence in the citizenry to manage their land parcels. This will involve the granting of title deeds or tradable long-term leases in various African countries. And in the case of better seeds, the evidence from South Africa is there for many countries to observe and learn.
The economic recovery from the pandemic therefore presents an opportunity for governments to explore available technologies that could help in the registration of land rights. These include global positioning systems, mapping and blockchain technologies.
This will help solve disputes and also with the tradability of land rights. This process can be piloted on agricultural land. The proper recording and confirmation of land rights will encourage individual entrepreneurs to invest in their farmland and thereby trigger the commercialisation and growth of the agricultural sector.
There are also examples of technologies that various countries could use to document land. Examples include the use of drones in India, and aerial photography in Rwanda. This would help change the troubling statistic that roughly 90% of rural land in Africa is not formally documented.
How would you envisage overcoming the concern that ambitious rights formalisation and documentation strategies tend to extinguish secondary rights, often held by women?
The overall intention is to ensure formalisation of land rights, with the objective of attracting investments in the agricultural sector and unlocking its potential.
Africa has, indeed, a history of disadvantaging women on land matters. Any strategy for the formalisation of land rights will have to be well thought out and transparent. The aim should be to ensure that there isn’t bias towards men and politically connected individuals as has been observed in land reform cases in South Africa.
Are you perhaps placing too much faith in technology?
To date, South Africa is the only country in sub-Saharan Africa that has embraced biotechnology. This is primarily because it’s the only country in the region that has adopted the use of genetically engineered cotton, maize and soybean seeds. Other countries that have done so include the US, Brazil and Argentina. In these countries, the use of the genetically engineered seeds has seen lower insecticide use, more environmentally friendly tillage practices and improvements in crop yields.
How productive is sub-Saharan African agriculture relative to other regions of the world? What can be done to improve yields?
There is compelling evidence of the increase in yields within the sub-Saharan Africa region. Consider South Africa. It produces about 16% of sub-Saharan Africa maize, according to the International Grains Council. But it uses a relatively small area of land – an average of 2.5 million hectares since 2010. In contrast, countries such as Nigeria planted 6.5 million hectares in the same production season but only harvested 11 million tonnes of maize. Nigeria’s output equates to 15% of the sub-Saharan region’s maize production.
South Africa began planting genetically engineered maize seeds in the 2001/02 season. Before its introduction, average maize yields were around 2.4 tonnes per hectare. That has now increased to an average of 5.9 tonnes per hectare as of the 2019/20 production season.
Meanwhile, the sub-Saharan Africa region’s maize yields remain negligible, averaging below 2.0 tonnes per hectare.
While yields are also influenced by improved germplasm (enabled by non-GM biotechnology) and improved low- and no-till production methods (facilitated through herbicide tolerant GM technology), other benefits include labour savings, reduced insecticide use, and improved weed and pest control. These labour-saving benefits, also for small-scale livelihood farmers, were also observed in a research study in the KwaZulu Natal province of South Africa.
Other countries like Kenya and Nigeria are increasingly field-testing genetically engineered crops. They should accelerate the process, and when it meets their scientific standards, should embark on commercialisation as part of the recovery from the economic slump caused by the pandemic.
Each country will have its domestic regulatory process which safeguards consumers and farmers. But these need not be too prohibitive to the extent that they disadvantage farmers. A case in point is Zimbabwe, where the importation of genetically engineered maize has recently been permitted but planting by domestic farmers is prohibited.
But high yield – that is the amount produced per unit area – typically means high input costs, which is one reason why small-scale farmers’ uptake of these technologies is limited. Also, won’t the emergence of larger and more commercially oriented and technologically capable African farmers result in agriculture absorbing less and less labour?
Africa’s smallholder farmers will generally struggle to access some technologies because of the associated costs. But if the goal is to ensure that the African continent can compete globally with the likes of the US, Brazil and Argentina, among others, then the focus should be on commercialisation of farmers and encourage the economies of scale on the continent. There have to be trade-offs. These include job losses in certain subsectors such as grains as farmers would be adopting more technologies.
But there are potential gains in other subsectors such as horticulture. If supported and developed to scale, these could create large numbers of jobs. Again, a case in point is South Africa, where there were job losses in field crops but horticulture created many jobs.
The key is to ensure job mobility so that people can progressively move to higher paying jobs in agro-processing and other subsectors.
In sum, this is not to mean we should move away from smallholder farming per se. We need a mixed farming system. Where conditions allow, commercialisation at large scale should be encouraged. This is precisely the case in Brazil, where there is a mixed farming system.
Wandile Sihlobo is the author of Finding Common Ground: Land, Equity, and Agriculture
The 52-year-old prime minister died in a South African hospital four weeks after testing positive for COVID-19.
The prime minister of Eswatini, Africa’s last absolute monarchy, died in a South African hospital on Sunday, the government said in a statement.
Ambrose Dlamini, 52, tested positive for COVID-19 four weeks ago.
“Their Majesties have commanded that I inform the nation of the sad and untimely passing away of His Excellency the Prime Minister Ambrose Mandvulo Dlamini,” Deputy Prime Minister Themba Masuku said in a statement.
The prime minister “passed on this afternoon while under medical care in a hospital in South Africa,” he added, without detailing the cause of Dlamini’s death.
Dlamini had announced in mid-November that he had tested positive for the coronavirus but said that he felt well and was asymptomatic.
He was moved to South Africa on December 1, to “guide and fast-track his recovery,” from COVID-19. At that time, the government said Dlamini was stable and responding well to treatment.
Dlamini was appointed prime minister in November 2018, following his position as the chief executive officer of telecoms company MTN Eswatini. He had worked in the banking industry for more than 18 years, including as the managing director of Eswatini Nedbank Limited.
Formerly known as Swaziland, the kingdom of Eswatini has reported over 6,700 coronavirus cases and 127 deaths among its population of 1.2 million people.
A South Africa-based civil society group, the Swaziland Solidarity Network (SSN), had accused the government of giving the prime minister special treatment by moving him to a country with better healthcare.
More than 39 percent of the tiny landlocked country’s population lived below the poverty line in 2016 and 2017, according to the World Bank.
Every year an increasing number of Nigerians flee poverty and unrest at home. Now, rich Nigerians are planning their escape too. And they’re taking their money with them.
Dapo has spent too long at home in Lagos, Nigeria. Back in October, protests against the SARS police unit kept him from going to his office. “First, we were told to stay at home because of the coronavirus. Then this,” he says.
A wealthy Nigerian, Dapo, who is in his late 30s, does not want to make himself identifiable by giving his surname and age, lest it draw unwanted attention.
He has had a “backup plan” for getting out of Nigeria for some time, he says. “I have Maltese citizenship. I can leave for there any time.” With one small obstacle – a 14-day quarantine upon arrival – Dapo could be permanently in Malta any time he pleases. He is not planning to go imminently, but describes it as his “plan b’’.
Dapo is one of a rapidly growing number of Nigerians who have bought so-called “golden visas” or foreign citizenships-by-investment this year. In his case it was Malta, the Mediterranean island where citizenship can be acquired for a minimum investment of 800,000 euros ($947,180) through the Malta Citizenship by Investment Programme.
Not that he has any special love for Malta. A record 92 countries around the world now allow wealthy individuals to become residents or citizens in return for a fee, sometimes as low as $100,000 but often several million dollars. It is billed as a “win-win”: The country gets much-needed foreign investment and, in return, the new citizens have new passports that open up more of the world to travel or live in.
Golden visas are the lesser-reported side of the Nigerian migration story. Every year thousands of Nigerians make their way to Europe via perilous crossings over the Sahara and Mediterranean. Now their wealthier counterparts are also making their way to Europe but via a different route.
A record year for golden visas
Whether rich or poor, the reasons for leaving one’s home country are often the same. Fear of political uncertainty at home and hope for better opportunities elsewhere. But 2020 has been exceptional.
Like Dapo, Folajimi Kuti, 50, was watching the #EndSARS protests from his home in Lagos in October. “I have children, they’re teenagers, and they’re asking me questions like, ‘How did we get here?’” he says, referring to the violence that accompanied demonstrations against the controversial Special Anti-Robbery Squad (SARS).
Kuti says he has believed for some time that social unrest would boil over in Nigeria, because of issues of poverty and police brutality. “It had been clear for the past two or three years that something was going to happen. It’s happened now in 2020 but, frankly, we’ve been expecting this outburst for a while so it wasn’t a matter of ‘if’. It was a matter of ‘when’.”Citizenship or residency abroad has become appealing, he adds. As a financial adviser to the wealthy, Kuti knows the process of applying for one having walked clients through it before. Most of his work involves advising Nigeria’s growing number of millionaires about investments and wealth planning. But now they are asking about foreign citizenships and Kuti himself is tempted by the idea. “Just knowing that if you need to go you certainly could and move without any restriction.”
The rush for golden visas among rich Nigerians started before October’s SARS protests. At London-based Henley & Partners, one of the world’s largest citizenship advisory firms, applications by Nigerians increased by 185 percent during the eight months to September 2020, making them the second-largest nationality to apply for such schemes after Indians.
More than 1,000 Nigerians have enquired about the citizenship of another country through Henley & Partners this year alone, which Paddy Blewer, head of marketing, says “is unheard of. We’ve never had this many people contacting us”.
Many, like Kuti, saw political problems ahead and wanted an escape plan. Others were focused on coronavirus: What if the pandemic overwhelms Nigeria?
“There is a lack of primary healthcare capacity that would be able to manage with either a second wave or whatever happens in, say, 2025,” says Blewer. “Let’s say there is COVID-21 still going on in 2025 that is of an order or magnitude worse. It’s, ‘Do I want to be based here and only based here, or do I want an alternative base of operations where I believe I will be safer and I will be able to run my global businesses’.
“And, I think, that’s what COVID has driven.”It was in July, when the number of COVID-19 cases in Nigeria escalated, that wealthy Nigerians started looking more seriously at citizenship abroad, experts say. “Those with medical conditions that could not fly out – a lot of them are buying passports just because if there is any problem they can fly out,” says Olusegun Paul Andrew, 56, a Nigerian entrepreneur and investor who spends much of the year in the Netherlands.
“Flying out” of Nigeria is hard and not just because of the coronavirus pandemic. Just 26 countries allow Nigerian passport holders visa-free entry, many of them part of West Africa’s ECOWAS arrangement. Both the United Kingdom and Europe’s Schengen zone require Nigerians to obtain visas ahead of travelling.
For the wealthy, this is too much hassle. “They don’t want to be queueing for visas for any EU country or whatever,” says Andrew. Instead, why not purchase the citizenship of a country with visa-free access to Europe?
To Europe, via the Caribbean
Bimpe, a wealthy Nigerian who also does not wish to give her full name, has three passports. One Nigerian, which she says she never uses, and two from Caribbean nations: St Kitts and Nevis; and Grenada.
The St Kitts and Nevis passport, which cost her $400,000 via a real estate investment programme, was useful when she travelled between London and New York on business as it allows for visa-free travel to the UK and Europe. But now that she has retired in Abuja, Bimpe, whose husband has passed away, wants her three adult sons to have the same opportunities to travel and live abroad.
“My kids were interested in visa-free travel. They are young graduates, wanting to explore the world. So that was the reason for my investment,” she explains.
Her investment to gain a Grenada passport for herself and her sons took the form of a $300,000 stake in the Six Senses La Sagesse hotel on the Caribbean island, which she bought in 2015 through a property development group called Range Developments. Like most countries offering their citizenship for sale, Grenada allows real estate investments to qualify for a passport.
Bimpe’s family has lived overseas before – spending nine years in the UK between 2006 and 2015. Of her three sons, she says: “One, for sure now, is never going to leave Nigeria. He loves it here. The second one lives in England. He’s been in England long enough to get British residency. My youngest – for him, living abroad is a very, very attractive option. He’s not very happy [in Nigeria]. He went to England very young – at age 12 – and he’s had a problem adjusting since. He’s been back in Nigeria five years and he’s still not settled.”
Now aged 26, Bimpe’s youngest son is looking at settling in the UK or in the US where, thanks to his Grenada citizenship, he qualifies for an E-2 visa, something not available to his fellow Nigerians since President Donald Trump’s ban on immigrant visa applications in February. Bimpe believes his career opportunities in acting – he studied Drama in the UK – are better abroad, and therefore considers the Grenada citizenship to be a worthwhile investment.
Neither Bimpe nor her sons have ever been to Grenada even though their investment allows them to stay on the Caribbean island, once known as The Spice Island. “I intend to go. I would like to go,” she says. “Just when I did [the investment], it was soon after my husband died and I wasn’t in the mood for travel and then I got my passport but there was no good reason for travel due to the pandemic.”
The Six Senses La Sagesse is being constructed by Range Developments, whose founder and managing director, Mohammed Asaria, says it is not unusual for investors never to visit. In fact, since there is no obligation for citizenship investors to visit Grenada, interest in the scheme has ballooned among Nigerians.
“We have between high single figures and low double-digit sales of hotel units on a monthly basis to Nigerians. The average investment is just under $300,000,” says Asaria. “It’s a big market for us. And it’s going to get bigger. There are 300 million people [in Nigeria].” Of these, more than 40,000 are millionaires and, therefore, potential customers for golden visas, according to the Knight Frank Wealth Report.
It is a similar story across the Caribbean. Arton Capital, a citizenship advisory group, says demand from Nigerian families for Antigua and Barbuda citizenship is up 15 percent this year compared with the last.
St Lucia has also seen a record number of Nigerians applying in 2020. “It’s more than it’s ever been over the past four years,” says Nestor Alfred, CEO of the St Lucia Citizenship-by-Investment Unit.
The citizenship market is not exclusive to the Caribbean, but these are the cheapest and they maintain that all-important visa-free access to Europe that their clients are hankering after.
“I’m rich but I’m not a Donald Trump. I wasn’t looking for a tax escape,” says Bimpe.
Investing in a foreign citizenship is not illegal for Nigerians, but the issue of wealthy citizens moving their assets overseas is a thorny one in Nigeria, where about $15bn is lost to tax evasion every year, according to the country’s Federal Inland Revenue Service. Much of that money finds its way to the Caribbean, as was highlighted in the leaked documents that formed part of the Panama Papers in 2016.
The tax benefits of an overseas citizenship are undoubtedly attractive. Citizens can become tax residents of countries like Dominica, where there is no wealth or inheritance tax, or Grenada which offers “corporate tax incentives”. In Europe, Malta has long been courting hedge funds with its light-touch regulations.
Being a citizen of a country with a more stable currency is also appealing to the wealthy. “Second citizenship helps with capital mobility. Pull up a graph of the Naira. If you look at the Naira for the last 10 years it’s been a horrible journey,” says Asaria. Better, therefore, in the minds of the wealthy, to own assets in euros or even East Caribbean dollars which are pegged to the US dollar.
“Businesses are struggling, inflation on the rise, insecurity, and a host of other issues. These issues have prompted an increase in citizenship or residency-by-investment from wealthy Nigerians in a bid to secure a better future for their families in developed countries,” says Evans Ahanaonu, a Lagos-based representative for High Net Worth Immigration, a citizenship advisory firm. Grenada and Turkey are popular for clients wanting quick access to Europe, he adds, while some go straight for the UK Innovator Visa which means setting up a business in the UK.
Given the number of applications processed by the citizenship advisory firms interviewed just for this article, a conservative estimate would put the amount invested by Nigerians into citizenship schemes at more than $1bn this year alone.
Where rich and poor migrants meet
The loss of wealth from Nigeria has severe implications for levels of employment in the country. With wealthy businesspeople investing their capital outside Nigeria rather than in it, there is less funding for local businesses or government projects which might otherwise generate employment. This, in turn is causing more poorer Nigerians to want to move overseas as well, in search of better work opportunities, a trend backed up by the findings of a 2018 survey by Afrobarometer, the data analysis group.
Just before the pandemic struck, Kingsley Aneoklloude, 35, was able to make his way to Europe, but via a very different route.
He was working as a mechanic in his village in Edo State, one of the country’s poorer provinces which have been untouched by oil wealth, where he earned 1,500 naira ($3.95) a week.
The salary was poor but the final straw was police brutality. Aneoklloude was briefly employed as a local election monitor during the 2015 presidential elections. He says he was pressured by representatives of a political party to manipulate ballot papers, but refused, after which he became afraid for his safety. “I left because they were chasing me. Honestly, they come and chase me,” he says.
First, he went to Kano State in the north of Nigeria. Then, in December 2019, Aneoklloude made the dangerous journey to Europe via Niger, then Libya, “where there was a heavy war in Tripoli”, before crossing the Mediterranean.
While adrift on the Mediterranean Sea, his small boat was rescued by Open Arms, an NGO which helps refugees and migrants crossing the Mediterranean. Their ship docked in Lampedusa, one of the Italian Pelagie Islands, where Aneoklloude’s asylum application for Germany was processed.
Now in Potsdam, Germany, he is waiting to hear the outcome of his application for new citizenship and a job. “I have a nine-month contract for work, but they need the immigration officer to sign the contract before I start,” he explains.
At 35, Aneoklloude is just a few years younger than Dapo. Both have witnessed police brutality from different angles, and both saw the Mediterranean as their way out.
But now, with Nigeria’s economy officially in another recession, more will likely follow. It is a dangerous spiral: The more wealth taken out of Nigeria, the fewer jobs available to its poorest.
2020 was the Chinese Year of the Rat – associated with the “rat-like qualities” of quick thinking and adaptability leading to success and wealth. After a year of challenges, with many people selecting or being forced into self-employment and starting a business, how can people mimic these qualities?
Online information meant to be helpful can instead be overwhelming. There are many predictions of where the future of business lies and how the post-pandemic world may create unexpected and surprising global trends towards growth and increased investment. But when you are starting from scratch, you first need to understand the basics.
Who wants what I am selling?
The first step is figuring out who your target customer, user or audience is. Where do they shop and how will they perceive you? Data shows that online shopping in 2016 involved 1.66 billion digital buyers around the world – this has been forecast to grow to 2.14 billion by 2021.
You can start your business in either structure, as a sole trader or limited company, without your offering being totally perfect. Build confidence incrementally, while testing the market with the “minimum viable product”. In layman’s terms, this means the most basic version of what you are offering that is saleable and works – and that a customer would want, without the bells and whistles that you can add later. It is normal to make changes after feedback.
Register your logo early. There are advantages, whether you are a limited company or not, such as avoiding anyone copying it. The British Library has free comprehensive resources to register trademarks and patents. It is worth checking your design for trademark infringement.
Starting as a sole trader means less scrutiny and regulatory compliance than a limited company – a more formal legal structure can follow. On the other hand, a limited company can make a better first impression to potential investors. Consider trademarks early on. You can register a limited company with dormant accounts just to secure the business name.
In both instances, insurance may be required to protect against public liabilities and product liabilities. If you employ staff, insurance is a legal requirement – and you will need to advise HMRC and pay PAYE. If, as a sole trader or limited company, you are using your car, you need to tell your insurer.
Business rates will apply to a room in your home used only as an office, but there are exempted buildings which you should check.
Whether you are a sole trader or a limited company, it’s a good idea to register a website. Note that a limited company has more protection than a sole trader online. Social media domains also need to be considered. Free services that can help are the Federation of Small Business, the Institute of Directors and The Confederation of British Industry.
Will anyone buy my product or service?
Sole trading gives the impression that there is a person behind the brand, but limited companies can also tell a story and build trust with the customer, client or user. Question your potential customers, and use real data to understand the market. Market research will help you assess competition and risks – has someone already made what you are offering? What issues did they face?
An overlooked question is “why are you not using a product or service like mine?”. Ask yourself and your target customers this. The answer will reveal whether what has stopped this service being created before is linked to anything from price, to accessibility.
Do not be discouraged with a negative answer. Try and come at it from a personal angle. Loyalty is key in building a strong customer base and telling people a story helps them to get to know you. Marketing – or in other words, letting people know you exist – in the digital age means you cannot avoid social media. Use microblogging sites if you are time poor or LinkedIn and paid-for reports, that give you insights into nationwide statistics on things like the cosmetics industry, market trends in your area of interest or information on social media use, although they can be pricey.
What’s the plan?
Deciding whether to be a sole trader or a limited company inevitably means you produce a business plan. For both, it is a thought exercise, a useful checklist of decisions, justification, contingencies and research, predominantly for your own purposes, especially when it comes to being a sole trader. To allow for growth you might need to create another version for possible investors.
The business plan is not a linear document. Think ahead to future trends to recession-proof your business. Follow government policy on climate change through the Climate Change Committee – you don’t want your product to be banned a year after you set up due to changing policy on plastics, for example.
Who should I speak to?
When building a network of people with experience and relevant knowledge, limited companies are regarded more seriously. Businesses need different types of networks – and the chances are that you already know several helpful people. Recommendations establish trust and can accelerate relationships. Mentors do not need to know you exist – you can read about successful business founders and learn from them without ever speaking to them.
2021 is the Year of the Ox, which signals hard work – but also recognition for that work. Choosing how to start your business ultimately lies with you doing your research and making an informed decision. Knowledge is power, after all.
The recent months have seen Bitcoin record tremendous growth, attaining new price highs in about three years. The surge in Bitcoin value has been reflected in the revenue amassed by miners.
Data acquired by Bankr indicates that between November 9 and December 8, 2020, Bitcoin miners have earned a total of $551.45 million. The figure represents an average of about $18.38 million in daily revenue.
The highest revenue was recorded on December 3 at $21.76 million. Elsewhere, miners recorded the least earnings on November 14 at $15.59 million. The miners earned money by successfully creating the next block of transactions, making both the built-in subsidy as the combined fees paid alongside the transactions included in the block.
Bitcoin price surge correlates with high mining revenues
The high mining fees correlate with a period when the price of Bitcoin has soared higher since 2017 when the asset hit the all-time high of $20,000. On December 1, Bitcoin hit its yearly high of about $19,700, the highest price mark since 2017. Consequently, the last 30 days’ earnings represent one of the highest revenue in nearly three years.
The Bitcoin price increase has been facilitated by several factors, including the increased interest from institutional investors. Notably, most institutions have upped their Bitcoin reserves in the last 30 days. Furthermore, leading companies like PayPal have announced support for Bitcoin, contributing to the price surge.
In the wake of the price surge, fees climbed as Bitcoin experienced its most severe congestion in about three years. Transactions awaiting confirmation filled up due to a drop in hash rate. The situation was caused by miners taking machines offline while looking for regions with affordable electricity. At some point, the mining revenue increased when several publicly traded mining companies have seen their shares rise.
It is worth mentioning that the Bitcoin mining revenue is encouraging, considering that the industry witnessed a decline in profitability over recent years. Small miners made losses as institutional miners built large arrays to mine. The continued growth of large-scale miners, mainly from China, has led to the wiping out of small-scale miners.
The milestone in mining revenue comes barely six months after Bitcoin halving took place. Fees as a percentage of total revenue are on the upward since May halving. The increase in fee revenue is essential to sustain the network’s security as the subsidy decreases every four years.
Miners focused on another Bitcoin all time
With the increase in price and revenue, miners are taking advantage to bring in more machines online after early November’s record drop. From the data, at the start of November, the mining revenue dropped. With such a challenging environment, an increase in resources is required to carry out more mining.
Analysts continue to project that bitcoin’s current rally is sustainable with the strong possibility of continued upward price movement. In this case, miners are looking at continued revenue growth through the end of 2020. Notably, the current mining revenue figures and hash-rate recovery mirrors well for the bull market’s continuation. Bitcoin proponents continue to predict another all-time high for the asset before the year ends.