Episode Transcript
[00:00:00] Speaker A: Hello everyone. Welcome to the Techpoint Africa podcast. Today on the podcast, we'll be discussing updates about the state of binance in Nigeria. We also talk about the nigerian fintech startup that couldn't pay customers money, as it were, and blamed it on not being able to raise funds. We also touched on MTN's 2023 financial statement and the reason behind the company's 177.8 billion naira loss.
With me in the studio today, as usual, is Bolu and Chimgozurim. But also joining us in the studio is a distinguished guest, Joseph Olaoluwa. A senior reporter from Techaval will join us as we delve into all the things we have to discuss today and more. A quick update from CBN's news new guidelines for BDC that we discussed last week. Over 4000 BDC operating licenses have been revoked by the CBN. You can find that news on the website, but quickly, let's move to Binance. Two updates with Binance. Yeah, Binance was fined and then there was something else that is looking like you can't use Binance as in Nigeria, but it seems that it's false. So Buli is going to give us a rundown of that before we do a few discussions on it.
[00:01:31] Speaker B: All right, so, yes, like you said, two things happened. The first thing is binance was reportedly fined 10 billion naira because they were profiting from what regulators or authorities say describe as illegal transactions. But I mean, the person who said they've been balanced will be fined 10 billion, has later come out to say it was just speculation and they were not actually fined by the government. So that's the first thing. The other thing is binance is stopping naira services. And this does not mean that binance will stop working in Nigeria. It just means that you won't be able to use naira on the platform. Like, there won't be anything like naira on that platform. So before. So when it comes to using crypto platforms, right, there's usually two things you do. So you want to go on ramp or you want to go off ramp. So going on ramp simply means you want to go from fiat, right, which is naira into crypto, right? Or you're already into crypto and you need to go back to naira. So those are the two things you do. So to go on ramp, you usually need to sell. Like, I have Nara, so I need to buy crypto. Right. So before you could do that on binance, there are a number of ways to do that. You could go on the platform, go to the P two P section.
Find someone who is willing to sell cryptocurrency, and then I give the person, your narrator, they give you cryptocurrency, and then you maybe trade or do whatever it is that you want to do, and then you want to go off again. You could do the same thing, right? So binance is saying, all right, so you can't do that again, right? You can't also deposit naira because before it was possible to deposit naira on the platform, right? You can't also deposit naira. You can't also trade.
Do use trading pairs that has ng and nigerian era. So trading pairs are like, oh, if I want to trade bitcoin, for example, now. So I'll search for the trading pair that has bitcoin and probably USDT, right? So I can buy and acknowledge I can buy bitcoin with USDT or sell bitcoin for USDT. So now, so they're also trading pairs where there's naira and BTC. So you can buy, buy naira with, buy BTC with naira or sell BTC for naira. So that's what it simply means. You can't do any of that again.
[00:04:09] Speaker A: Now, I'm curious. Is it that it was illegal before or binance is trying to punish us for what Nigeria is doing to them, not like us?
[00:04:21] Speaker B: Okay, so that's a very interesting question.
So I won't say illegal, right? So when it comes to the crypto space and regulations and what is allowed and what is not allowed, a lot of things are very blurry, right? A lot of things are not clear. But one thing that we are clear on is that in February 2021, the CBN said that banks should not have anything to do with cryptocurrency platforms. This now meant that because what was, what happened before, right? Going back to that on ramp and off ramp, what used to happen was that if I wanted to buy cryptocurrency, right, I probably already have my card, my bank card on a crypto platform. And then I go on that crypto platform and tell them I want to buy bitcoin worth 100,000 error. And then that platform can debit me. Right? Debits my bank and then gaming crypto. That had to stop after the circular by the CBN. Yes, in 2021. So that was the, that basically gave birth to peer to peer, the b two p. We keep talking about when those platforms now, because they can't interact with you directly. And that's okay. Let's bring Timgozim and Bulu together so that they can exchange by themselves. What we just do is we'll be the middleman making sure that Timgo Zim doesn't suffer loss. Bulu also does not suffer loss, and they will provide escrow and all those things to make it easier. That was how p two P came to beam, right? So it's not after, I mean, in December, CBN told us that, okay, we now allow it. So that basically means that it wasn't illegal, right?
Yes. As of December, for binance to collect naira from you or help you trade naira on the platform.
[00:06:14] Speaker A: On March 14, 2024, Techpoint Africa will be hosting a workshop for business owners, entrepreneurs, HR professionals, startup founders, and legal and compliance team from any industry. And the focus is to learn the five biggest hiring, unemployment, mistakes that can lead to litigation, penalties and loss of funds. You also learn how to avoid these mistakes. Taking this workshop is startup attorney Omori Ediogiawiri. He is the lead partner at ANC legal. Registering for this workshop will help you learn how to catch loopholes that increase the chances of litigation, teach you how to assess your workforce to know whether it is legally compliant or not, help you spot early signs of an employee that will get you into a legal trouble and how to make proper documentation that will give you a defense during legal challenges. To register, go to www. Dot Techpoint Dot Africa Workshop, the employer and book. Www. Dot Techpoint Dot Africa Workshop, the employer and book. Anyway, so you know, the thing with fintech platforms or any platform is like to remove as much barrier it is for you to use their platform. But for this case, now for Nigerians to use binance, is it binance or binance binance to use it now there's now more barrier to using them is. So what is like the implication of this, the use of that platform in the country?
[00:08:00] Speaker B: Okay, so the implications definitely means using binance now becomes harder, becomes more difficult. Because if I wanted to trade on binance, I could just do everything straight on binance, put my naira on Binance, take my crypto out, convert it to naira, send it to my bank account, but now there's more friction. So what I would need to do now is outside of those guardrails that Binance created in p two p where I could meet someone and tell that person, oh, sell me bitcoin, let me give you 20,000 error. Now I have to go out, meet somebody on WhatsApp, tell the person to give me bitcoin worth 20,000 and then I send them 20,000 and I don't get the BTC, which now opens me up to a lot of scam. So that's one thing. Deprecations.
That's an implication for users, right? Also an implication for binance, because, okay, before we talk about the implications for Binance, let's not talk about other platforms. There are other platforms that say, have p two p, right?
[00:09:06] Speaker A: Local platforms.
[00:09:08] Speaker B: No, not local. Many of them are not local platforms. So I don't want to start mentioning names and advertising because I've been doing it a lot. So you go on those platforms, there's p two p. You get your p two p. Now you have to. You get your BTC, right? You meet someone there. Those platforms provide you, like, a safe place to, like, trade, and then you get your bitcoin. And now it now means that if you want to now trade it, you now have to take it from that platform, send this back again to Binance, and I'll trade on Binance. And then you trade on Binance. You want to turn it back to naira, you send the crypto back to those platforms.
So that friction now means that instead of me doing that, I'll just do everything on that platform, right. And I will not go to binance. So binance could actually be losing customers because of that. So it wasn't as if they even make that much money from peer to peer. I don't think they make any money at all. But peer to peer made it easier for them to get customers to. Exactly. Because you could do everything on that platform. But now that I have to start moving between platforms, it makes things easy. Mistakes could happen. I couldn't put a wrong address, and I would lose money. So I'll just stay on that platform, trade and. But I don't know.
[00:10:21] Speaker A: Sorry. Sorry, guys, for facing Bulu because he's the crypto person. I don't know. I don't care.
No offense. I know it's people's money that.
Does any of you trade crypto?
[00:10:33] Speaker C: Not really.
[00:10:34] Speaker A: Just a few?
[00:10:35] Speaker D: No, I don't trade crypto.
[00:10:36] Speaker A: Okay, so I'm justified. So, olu, how are you surviving?
[00:10:40] Speaker C: Um, you really don't care about his finances?
[00:10:43] Speaker A: Not Lisa's finance. So we are doing this because we need to do a story. I mean, talk about things that affect people's livelihood.
[00:10:51] Speaker C: You don't care about what affects bully's livelihood.
[00:10:56] Speaker B: For people?
[00:10:57] Speaker A: Some people's livelihood, yes. That's. That's some people's business.
[00:11:06] Speaker B: Right?
[00:11:07] Speaker C: I don't know. I don't.
[00:11:10] Speaker B: But there's actually a consequence for Nigeria. Right. Because this could actually have been an opportunity for the country to generate a lot of revenue from crypto. Because if you look at the crypto market now, there's a lot of trading going on because the market is bullish. Right. People are trading a lot. There's a lot happening.
[00:11:32] Speaker A: Use the right one that laymen can.
[00:11:34] Speaker B: No, laymen understand. Wait, the market is okay. The market is doing great.
[00:11:40] Speaker A: People are, it's not bitcoin. I did. I see you are smiling. Volume.
[00:11:45] Speaker B: No, that's not good yet.
[00:11:47] Speaker A: No, it's not good yet.
[00:11:49] Speaker B: So, I mean, more trades. Binance would actually have been making a lot of more money now because a lot of people want to trade, want to make money, not miss out on.
[00:11:59] Speaker D: This, the volume of people.
[00:12:00] Speaker B: Yes. Right. So it would have been an opportunity for the government to like, oh, there's so much money. Like, okay, tax them or do whatever.
[00:12:11] Speaker A: But the CBN governor said last week that this money unaccounted for because it's.
[00:12:17] Speaker B: A centralized exchange, which means people do KYC. Right. Very stringent KYC, if you think about it, try and open up a binance account now and see how difficult it will be. It's almost more difficult than opening op. That's how hard it is. They have KYC.
So it is not as if you can, if you work with them, you can identify, you can regulate them, identify which money is going where, who is doing what, how much are they transacting. Right. You can easily get this information from them. It's also blockchain. Blockchain is free for anybody to. You can collect my wallet address and you can see everything I'm doing. You can see everything. You can basically see everything binance is doing on the blockchain. Right. So I just think whatever is going on between CBA and Nigeria and the crypto space right now, they should fix up. There needs to be a lot of communication going on and I mean, I just hope for the best.
[00:13:17] Speaker D: I think there are two things to note about, like what's happening, like in the crypto space. This is the second time, same CBN now. It's the same CBN in 2021 that tried to restrict crypto. The same CBN tried to give some regulations. I think last as the month, as the year was coming to an end, the same CBN now less than how many months? So in less than in four years or in space of four years, twice CBN has tried to restrict crypto. That's on one hand. The other hand, is that the problem that we are having with dollar inflows is not like binance.
There's not binance.
[00:13:58] Speaker A: Finance is not the enemy.
[00:13:59] Speaker D: They are not the reason why we are not having as much dollar inflows already. The situation is there's a supply problem and all the situations are combined together like there are macroeconomic problems, there's inflation that is already at like three decades. There's a currency devaluation that is 70%. And then there's Nigeria as a whole.
We are not producing anything. So I mean, what is going to bring in those dollars?
No foreign exchange. And Nigeria is not doing so well to bolster its foreign exchange. So I mean, trying to restrict cryptocurrency, some people might think that maybe it's an avenue for $3, maybe because of the fact that the market is doing well. But trying to restrict that aspect is not like the only solution. Even what the CBN governor is doing, trying to fight a monetary battle on this monetary side, hoping that the fiscal, and he said it in the CBN NPC meeting react which is insecurities in country people cannot farm, produce food that we need to eat to fight.
And there's energy issues. There's also the fact that production is low because if even the basic farming cannot happen, then you can imagine how much will happen in manufacturing if energy is already high. Can imagine how many companies are shut down because they cannot produce power to power manufacturing. And you know, if dollar has devalued, you can imagine how much people are using to import raw materials because meta has not even produced raw materials. So these are some of the problems that the government should be thinking about rather than promising $10 million inflow, kidnapping people rather than abduct, trying to arrest.
[00:15:52] Speaker A: So the thing is, when you think about it, finance looks like a low hanging fruit, as we call it, criminal.
[00:16:00] Speaker B: Behavior that is going through it right now. I think they will give you 10 billion.
[00:16:06] Speaker A: So, yeah, we just hope that it gets a time where things like this, like allowing crypto to have it play. It's like it's here to stay. Whether you. Yes, there's nothing you can do about it. Once the young population in a country embrace something to get it out of their hands, it's going to take a long time, if ever it will happen.
So, still talking about money. A Niger fintech startup, which is like a bank, a digital bank for small businesses, has not for a few months now, has not been able to release customers funds that were deposited on the platform. And news came to fall this week that the reason behind it is because the startup couldn't raise fund. Now it created a lot of conversation earlier in the week, and I'm like, what's the big deal? What's the big deal? I know, I know it shouldn't be the idea that a bank is not allowing you to take your money, but what is, like, the specific uniqueness to this particular case? So, Joseph.
[00:17:32] Speaker D: Well, I mean, the broad situation is tricky, and it's worrisome.
This is a fintech that offers business banking services to small businesses.
And so what it means is, one, it's holding deposits of, based on the story, around 80 businesses. Businesses. So let's just imagine that one business out of the 80 has, say, ten employees or maybe more. So that's compounding it. That's one. So it says that they have withdrawal delays because of a funding environment.
That's also very, very worrisome, because as a bank, one of the major functions is the deposits, right. The money that is being deposited into the bank are customers or business owned. Like, it's not the bank's money.
And we know that sometimes banks, maybe as their normal function, give out loans, do some treasury. No, does do something.
[00:18:44] Speaker A: Is this CRR that they call it cash reserve ratio.
[00:18:49] Speaker D: Yes. So they do some businesses with the money. Some hardly increase how much, you know, they can earn, you get. And then some of them might say, okay, you know, banking with us, maybe charge some fees, electronic fees and all kind of fees. So we.
[00:19:08] Speaker A: So, but for every time the customers need their money, they should be able to have access to.
[00:19:13] Speaker D: So you can charge your fees, you can do the loan options and all of those other things. But, I mean, every time that I need money, I should be able to get the money back. And then these are 80 businesses that are hanging on the thread. And then the reasonable excuse that is given by the CEO of Braz is that, no, there's a funding. There's a funding winter. It doesn't relate to the problem. But aside from the fact that that's happening, there's also a customer care issue whereby people that are trying to get their money cannot even reach the customer care. And this is a fintech that is without Borders. So I don't know where the office is. And so people are held in a limbo. And while that is happening as well, then do not have staff cuts.
The company announces that it's going to court staff.
We don't know how many is going to cut. So, I mean, this is a quagmire in three dimensions.
[00:20:10] Speaker C: Reputable piece.
[00:20:12] Speaker D: And it's worrisome because, you know, it highlights that this is a problem beyond just, I mean, you have staff cuts, you have customer care issues. You can't give customers their money. This is a similar situation we have seen before in the fintech landscape, showing how difficult it is to do business. One of the most important things about Bratz is that it shows, if you look at the conversation, it shows how difficult it is to do business as a fintech. I mean, if you look at some of the explanations that the CEO gives, it says that, oh, you need to raise money. Why that excuse is worrisome. People might not believe that because they have rights not to believe that. The other part is that they also says that to actually run a fintech is capture intensive in a way. So these are some of the takeaways from like what that story, like highlights.
[00:21:01] Speaker A: So just like in the previous month where we've been like talking about layoffs and shutdowns, some startups have come to say that they had to shut down because they couldn't raise their next round. And so would we be saying that in this particular case of brass, why I'm asking this is that I need understand why it stands out. Would you say, okay, let's say the operational expenses for a startup, like the startup has to run and it needs money to operate and mistakenly went to take customers money to do operation. And at the time the customers need it, it was not available.
What is like the implication to that? Like, okay, say we can't run. Okay, let's say we cannot run to the optimal. Should we just say, customers, come and take your money? It's as if I don't, I don't understand where we are going to right now. Let's try to find our footing, probably raise fund, then we get back in position. Or what would have been the best move in this situation for brass? Tim Gazum, you okay?
[00:22:13] Speaker C: I'm trying to understand the question, but maybe what I understand is what should they have done when they were struggling? First of all, I think they were from all the issues they're having, which is following staff having difficulties with customer withdrawals, points to two things. One is that you're not making enough money.
[00:22:33] Speaker A: They're not having difficulty with customer withdrawal. Like it's a tech.
[00:22:37] Speaker C: Yeah, yeah, yeah.
[00:22:37] Speaker A: Like there's no money to give them because that's the way it is.
[00:22:41] Speaker C: Customers are not able to access their funds. So two problems here. One, you're not making enough money, which suggests that you are actually okay. So maybe your business model hasn't yet had it, hasn't gotten to this skill where without you raising external funding can survive. You can survive. So I think brass supports about it. I can't remember the exact number that 300 or 3000 businesses.
So what you're probably doing for them. I know they have quite a number of products. They have a payroll feature, which I don't know how much that has taken off, considering that there are really large players in this space. But the problem with fintech is you often have to, if you're not giving out loans, you often have to make your magic like, okay, so you're taking out, okay, maybe 1%, 0.5% or something like that of each transaction.
A business is not, is unlikely to make as many transactions as an average individual. I'm not paying for Uber every day, so I probably make a few large transactions in a month and that's it. Maybe. I think one problem is that they were not making enough money, which is not a big problem. It's not a big deal, really, because anybody can be in that situation. But where the problem now is I have made the deposit.
And to the best of my knowledge, brass is sort of regulated. They acquired a microfinance bank license. Yeah.
[00:24:12] Speaker A: To get the license.
[00:24:15] Speaker C: You are regulated and there's a reason why you can go to your bank almost anytime and ask for your money.
[00:24:21] Speaker A: And they don't give you. You can scatter even if it's too.
[00:24:24] Speaker C: You cannot agree to bond.
But yes, there's a reason why you have that confidence. I go into the bank, I'll get my money back. You may not know it, but your banks are insured, or your deposits are insured. Now, my hope is that the customer deposits were insured, which means that to a very large extent, brass should be able to fulfill every customer request for withdrawal. Because all these customers did not come to you at the same time, they couldn't have possibly come for you.
[00:24:51] Speaker A: They've been having issues like November or so.
[00:24:54] Speaker C: Yes. So they couldn't have possibly come to you at the same time, it's. It's virtually impossible for all your customers, except there's something in the environment that makes.
[00:25:03] Speaker A: They are planning a bank run.
[00:25:04] Speaker C: Yeah. And unlike Silicon Valley bank, where we saw people give instructions, basically telling people to go withdraw their money, we did not hear any, any instruction of that sort. So you cannot tell me that they came at the same time. Which now points to a problem in how you're managing your funds.
I'm not a banker, but I believe that if I'm, if I'm, if I'm serving businesses with technology, I should be able to see when they move the money, when they move certain amounts of money the most. I should know that, okay, between the 24th and the 30th, or maybe 31st or transact. Yeah. You are going to be paying staff salaries. I should also be able to know that, okay, maybe I have a lot of supply chain guys, so at least every two weeks or so, or maybe even every six weeks, I'm making very large transactions to suppliers. I should also be able to know from this data that, okay, there's a certain threshold that my money can never go below. Yes, because you have money for operations. Yes, because of customer deposits.
I think the problem here is either they were unaware of how to run a banking institution, because, let's face it, this is a bank.
[00:26:21] Speaker A: The startup is like four years.
[00:26:23] Speaker C: Yeah, think about that.
Either you do not know how to run a bank, or you made some mistakes somewhere, or an oversight.
[00:26:32] Speaker A: That's just maybe a raise was in the office and it was so close. I understand.
[00:26:37] Speaker C: I don't know the last time. I don't know the last time that.
[00:26:40] Speaker A: I'm making a case.
[00:26:41] Speaker C: No, yeah, I know you're not making a case, but you should not. You're deposit taking institution. You should never say or, you know, you should never hinge your abilities to fulfill your responsibility to your customers on a raise. You're not the, you're not the payment facilitator. If you're a payment facilitator, I can say, okay, no, wahala, you, you what? The 1.5% you're making isn't enough? Customers are not exactly depositing money with you. It's just, I collect money from this person. I give it to this person. Yeah, I don't know. Plus or minus three days, I collect money from you, I give it to this person in a few days. If you're a very terrible payment provider, maybe one week the money has left your account. But this one, someone is giving you.
[00:27:25] Speaker A: Money when they are saving with you.
[00:27:27] Speaker C: There are a few things that banks do. Either they are investing in treasury bills or investing in some kind of instrument that gives them. What are you doing? So maybe I should be asking, do they have a CFO, for example, because this.
Do you have a CFO who was handling your treasury management to ensure that you're nothing? Because let's face it, you don't have any excuse, really, to be in that kind of situation.
[00:27:51] Speaker A: Situation.
[00:27:52] Speaker C: You don't have an excuse.
[00:27:53] Speaker B: There's one question we also need to ask. Right? So, I'm sorry.
[00:27:56] Speaker A: Yes, please.
[00:27:57] Speaker B: So, um, what? And the question is, was, is it possible that brass can survive this? I'm asking because one, it's a business that has to do with lot of trust. And I'm sure that by now most of the customers. Yes, a lot of people not want to trust you especially and my own trust, I won't even trust our company again. Because if you tell me that it's.
[00:28:23] Speaker C: My money you're doing.
[00:28:24] Speaker B: Yes, because if I'm depositing money with you and you're telling me the reason why I can't collect my money because you're not able to raise, I. I don't think I want anything to do with you ever again. So is it possible that comes like, are we, is there a short down coming?
[00:28:40] Speaker A: Possibly, because immediately you can assess your money. What's the next thing you want to do?
[00:28:45] Speaker C: Sorry, um, maybe I should have them here if I'm the one. Make your take 40 for the next three months. I'm sorry. If your money is there. I've just given bad advice. Don't take me serious. Make your take 40 for the next three months so that people are enjoying their money in batches. Maybe in that time you repay your reputation. I don't know how long it will take.
[00:29:06] Speaker A: It makes you get worse. As long as I can't tell them.
[00:29:08] Speaker B: They will get their money in five years.
[00:29:10] Speaker C: Yeah.
[00:29:10] Speaker D: No, no.
[00:29:10] Speaker C: You convert it to brass tokens.
[00:29:13] Speaker A: If we stop this joke, I don't.
[00:29:17] Speaker C: Know, you can convert their money through brass tokens. I'm not giving you financial. If you like this, nobody should go and say that I give you their advice, but you can cover their money. But really, can they survive? It is possible. The major problem with banks is that, yes, they deal in, they deal with our money, but I think the only currency that they have is just trust. So if you've lost that trust, it's difficult.
[00:29:47] Speaker A: To do a townhall and invite.
[00:29:50] Speaker C: Somebody that did downhole. And nothing has come out of that townhall today. Name shall not be called. But you know that somebody did downhole seven. Sorry, multiple, multiple town halls that you could not see nothing from till today. But anyway, I think they can, they can fix their reputation.
If you maybe, let's say.
Well, the story is that they could raise some money the next few weeks. So if you tell your, if you properly communicate your customers.
[00:30:18] Speaker A: Okay, this will happen again.
[00:30:20] Speaker C: Yes. Maybe even if you see, you asked, like go on his personal call with all the 80 businesses and say, look, you have Shafuck up, you would forgive us even if he has to kneel down, because really, banks, this is why.
[00:30:38] Speaker A: Our parents would never want to put big money in fintech, because that is the claim they make. Like, I know that these banks, there's nowhere they want to run to.
[00:30:49] Speaker D: Yes, I think this is a masterclass in communication. I think what brass missed was a master class of communication. To just add some context. Maybe some people actually forgot. Last year, around June, I think Tekaba published it as well. Heritage bank had issues with funding. It's granting this kind of request to Heritage bank was having issues with customers withdrawals. And at that time, people were worried, like, people were very worried because some people had gone to the bank to start staging protests. It was actually that bad. People were going to more or less take all their money out.
People were complaining because I got some personal complaints, because I was actually aware of the situation and I was also doing some stories about that. And what the bank really did was it came out and began to issue this. Customer care began to work much more effectively. Issued a few statements at the time, and if I remind us, what they said was that someone stole 49 million to merit bank. Right. And that was all over the news everywhere. And then for some reason, the bank began to allow people to withdraw, withdraw their money, but then was also countering into some communication, like making public communications, making this. And after some time, everything began to subside, everything quelled. And people now use heritage, you understand? So I think for brass, and I.
[00:32:16] Speaker C: Think Heritage bank has a green.
So brass also has green.
[00:32:22] Speaker D: I didn't.
[00:32:22] Speaker C: Good.
[00:32:22] Speaker D: I didn't think that deep.
[00:32:25] Speaker A: Yes. I think this is always a communication thing, right? Anything you're bringing tech into, you need to be able to open up and communicate with different.
Anything you are doing. Businesses have been in situations, nothing very terrible situations, and they were able to talk their way out of it. Like, even after fixing it, I'm not. I'm not talking about the ones that talk their way out of it and still did not fix it. They were able to talk their way out of it and still fix it. So, um, we hope that, um, Braz is able to fix this and, um, the company survives this challenging period. We move from there to the last story we'll be discussing today, because we spend a lot of time, and this is about a big company. We've been talking about atops and crypto and disruption and all. MTN Nigeria recorded its first loss, its first loss in six years.
In its 2023 financial statement, it says there was a 177.8 billion loss in FX. FX loss. Right. And I'm wondering what is responsible for this loss? To start with, it's a big company, like it's not your first radio, you know what's going on.
[00:33:40] Speaker D: Well, to be fair, I think that like this is M Ten is just. M ten is like it was coming, literally it was coming and then it just happened. So I don't think that it's a problem of the environment. And I'll explain. If you look at the nine month results for MTN, MTN had a profit dip of 45%. And when you look at that nine month result, it tells you that we had inflation concerns, we had currency devaluation.
But then they were able to come off with not a loss, a profit decline of 45%. But now in the end of full year, they are now having a serious loss. And it's from the same thing from forex locks. And major part of the forex loss is the tower cost. According to them, says the loss, they are financing the towers, they are paying for the towers in dollars. And it's 45% to 50% of like.
[00:34:31] Speaker A: They'Re making money in naira.
[00:34:32] Speaker D: Yeah, so it's so. And they also explained that, you know, when they cause that financial results at 23, it was at. It was 900. I mean, dollar to naira was around 900 to one. And then now it has become like 1700. Yeah, and so, and they keep explaining that the more the dollar continues to, the more the devaluation continues to happen. I'm already at 70% of the valuation, the more they continue to lose money. And then what makes it worse again, I mean, MTA has issues with tower costs. That's ATC and IHS, tower disputes. But then it was unfortunate that those tower disputes, paying those tower costs in dollars. And it's a business operating naira in Nigeria. I mean, on one hand. And then that affects many things. There's energy cost issue, there's no, I mean, diesel is already. Diesel is already expensive. And powering a tower you're using, we're guessing diesel. Diesel most likely to power the tower. And you know, M Ten is probably one of the networks that have one of the largest coverage in Nigeria. Everywhere you go, it's gone so far. So for every time that power goes out, diesel comes on, you know, running that cost as well as inflation. As well as inflation. And maybe that's why people complain that tariffs, you know, are not lasting. So these are some factors around it. And then people that bear the brunt is their shareholders who lose all. It's completely wiped out because the forex loss is around 740 billion and it wipes out shareholders funds so they don't get to pay final dividend for this year. So if you have MTN stock expecting.
[00:36:16] Speaker A: Just call for a GM like this, you just be like nothing to show.
[00:36:22] Speaker C: It's just update this year. We did this, we did that.
[00:36:25] Speaker A: I think we should just move on from the loss and just talk about a few things that went well for MTN in 2023 as reviewed by their financial statements was there.
[00:36:36] Speaker D: There are a few good things. I mean, webassembly have been growing for MTN. I mean over like 2023 and they are now close to 80 million. They had some 9.7 million mobile subscribers. Mumu wallet increased 163% to 5.3 million. I dispute that fact because that's the question I asked last year when I was doing a story momo wondering who I'm able to use it actively. But then they said that it grew and fintech revenue grew. But I mean, what's important about the announcement is that they said they were going to move into cloud IoT and unified communications. That's in addition to their four g and five g businesses.
[00:37:21] Speaker A: They already said they're a tech company.
[00:37:22] Speaker D: So like we are looking forward to like what's cloud? What they're looking. I mean, if you see cloud meaning this Zoho and cloud issues that we have, I mean, that will not be bad if MTN is provided. People have been clamoring for an african.
[00:37:37] Speaker A: Stop doing AWS competitor.
[00:37:41] Speaker D: So those are good things to look at.
[00:37:43] Speaker C: So yeah, they're actually very good. They could be in a good position.
[00:37:47] Speaker A: To be that, hopefully. So we are looking forward to what MTN would do in this year. First quarter is almost over, right? So we look out for how they are able to diversify their venue channels. Now. It's only like a startup move, sounding.
[00:38:08] Speaker C: Like motivation has become streams of income diversified.
[00:38:13] Speaker A: Yeah, there are new channels and probably not experienced a loss in this year. So that has been it for us today in the studio, we've had a great conversation. You are free to add. In fact, we welcome you to add this conversation we've had. You can send us an email at podcastechprint Africa or drop your comments on any of our social media channel to contribute to any of the points we've made. If you think we made any mistake at any point, please drop your reservation. We welcome them respectfully. Please, as Jim Gozim said.
So your reservations, your contribution, your feedback are welcome. Please don't forget to share this podcast with your friends. Folks and anybody and family, anybody you know is interested in the roundup of tech news in Africa. Although today we discussed Nigeria mostly. But yes, you get what I'm trying to say. And if you want to listen to us on any of our audio platform, where can they find us?
[00:39:14] Speaker B: Yes, for our audio listeners or you want to find us on our audio platforms, you can always find us on Google Podcasts, Apple Podcasts podcast. Hi, at radio or anywhere else you get your podcast.
[00:39:25] Speaker A: Yes. That is it. Volu always comes true.
Thank you for joining us once again today on the tech Metabol podcast. Thank you, Joseph, for joining us. It was lovely having you here. Thanks for being great. And Voluan Chimgozin said, no, thank you. Thank you for joining me.
[00:39:44] Speaker B: Oh, you're welcome.
[00:39:44] Speaker A: And Oluwani Femi, thank you for joining us today.
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