Ethiopia gets backed by Africa’s largest fintech platform



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Big Tech This Week
Ethiopia gets backed by Africa’s largest fintech platform
By Fatu Ogwuche • Issue #40 • View online
Top of mind: Happy Sunday!
I’m forced to write about a man I’m tired of documenting this week. I’m a fan, but boy, am I tired of writing about Elon Musk – alas, history compels me to. So this week, we’d cover how Twitter employees feel about Musk’s takeover and Ethiopia’s big news.
3 big things:
  • Ethiopia’s big bets
  • Twitter employees’ existential crisis
  • Meta wins this quarter

Ethiopia gets backed by Africa’s largest fintech platform
Safaricom CEO Peter Ndegwa | Credit: Safaricom
Safaricom CEO Peter Ndegwa | Credit: Safaricom
The short: Kenya’s mobile money M-Pesa is coming to Ethiopia!
What this means: Ethiopia’s state-owned Ethio telecom has maintained a monopoly over Ethiopia’s telecommunications services since its launch in 2010. That changed last year when a consortium led by Kenya’s Safaricom won a $850 million bid over telcos like MTN and Orange to acquire a national telecom license and retain a market share of Ethiopia’s 115 million population. 
The license gives Safaricom powers to roll out 4G services across Ethiopia. Still, it was exempt from offering mobile money services like M-Pesa – which accounted for 48.5% of Safaricom’s revenue in its 2021’s earnings report.
Fast forward to present day, Ethiopia’s National Bank is drafting a bill that will allow mobile money services like M-Pesa to operate in the country – not a bad compromise for an $850 million check.
It’s not all peaches and roses: Ethio telecoms launched its mobile money service Telebirr last year, acquiring over 4 million customers in its first few weeks. However, with the M-Pesa rollout, Telebirr faces a formidable competitor in Africa’s largest fintech operator – which services over 51 million users across 7 African countries. 
This might be the disruption Ethiopia’s PM is gunning for. The play is to take Ethiopia fully digital over the next decade, beginning with an unbundling of its telecoms sector. With new competition in this industry, Ethiopians now have access to diverse payment options outside outdated banking systems.  
Money moves: Ethiopia’s PM Abiy Ahmed overturned decades of privatised telecom services by opening the country to its largest foreign direct investment. This deal is expected to inject over $8 billion into Ethiopia’s economy over the next ten years and create 1.1 million jobs in the short term. The PM also announced plans to sell off a 45% stake in Ethio telecom, attracting more global players in Ethiopia’s economy.
Final thoughts: Safaricom’s historic expansion into Ethiopia’s insulated economy is a big win for Safaricom’s head honcho Peter Ndegwa, who took over the reins two years ago and a more significant victory for Ethiopians who have been anticipating innovation in its financial technology.
Elon buys Twitter, but employees aren’t thrilled
Twitter's Owner Elon Musk | Credit: WSJ
Twitter's Owner Elon Musk | Credit: WSJ
The short: In the greatest plot twist of 2022, Elon Musk acquired Twitter for $44 billion at $54.20 per share.
Welp: While Elon’s fanboys and girls fawned over his latest acquisition, there was the silent majority expressing intense trepidation in Slack groups. Asides from Twitter’s CEO’s obligatory but vague statement about Elon’s acquisition, former CEO Jack Dorsey declared: “Elon is the singular solution I trust”. Okay.
Twitter’s current employees, on the other hand, wondered what this meant for the company, now in the hands of a complex, volatile owner whose acquisition means taking the company private.
In a company-wide meeting, employees were told that Twitter going private means that employees who receive a large amount of their compensation in stocks would not receive additional equity the moment it’s privatised – leaving employees wondering if Elon’s takeover makes sense for their bank accounts. 
Job losses?: Top of mind for most employees was job security. While CEO Parag Agrawal mentioned there wouldn’t be layoffs in the short term, it could be a real problem in 6 months when the sale is complete and Elon begins cleaning house to make way for employees who believe in his vision for the company.
Bullying is not leadership: Who would have thought it would take a former CEO Dick Costolo to defend employees against Elon Musk. Musk tweeted a meme accusing Twitter’s Head of Legal Vijaya Gadde of making policy decisions with a left-wing bias. Elon’s trolls piled on Gadde with racist abuse and death threats. Instead of calling off his trolls, Elon doubled down in his response to Costolo – claiming his intentions were about political neutrality. 
Final thoughts: The truth is, no one knows what Musk’s acquisition means for Twitter – sweeping product changes or a return of controversial figures like Trump to the platform? With Twitter’s new owner, all the public can do is speculate and hope for a scenario where Musk takes this takeover more seriously than his response to the racist treatment of Tesla’s black employees. 
Meta’s back on top
Image credit: TechZine
Image credit: TechZine
The short: Meta’s shares soared this week thanks to an increase in daily active users.
Wall street proposes, Meta disposes: Meta’s shares rose 15% this week following a significant loss of value in the first quarter of 2022. In February, Meta recorded an unprecedented loss of users in its 16-year history, painting a gloomy 2022. Wall Street swooped in with its predictions of 1.96 billion daily active users, but Meta surprised analysts with 2.94 billion daily active users this week. 
By the numbers: Meta’s ad revenue rose 7% in the first quarter to $27.9 billion in 2022, falling short of analysts’ prediction of $28.20 billion. Not too shabby. However, Meta attributed this loss to Apple’s latest privacy changes and competition from apps like Tiktok. No surprises there, TikTok is decimating social apps across the globe.
Final thoughts: Apple has been a menace to tech companies’ bottom line since they introduced their privacy policy. It’s a great thing that companies like Meta succeed despite Apple’s arbitrary rules. I’m sure Meta’s shareholders are thrilled. I certainly am :)
That’s it for the week. I’d love to hear your thoughts about this week’s issue. Please respond to this email or find me on Twitter @fatuogwuche :) 
Ps – do us a solid by sharing the newsletter with your network of tech enthusiasts. Invite them to join the party :)
See you next Sunday!
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Fatu Ogwuche

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