Your Curated Weekly Tech News Across Africa, Thursday, 17th October 2024

Kenya's Crypto Landscape: Real-Time Tax System on the Horizon

The Kenya Revenue Authority (KRA) is gearing up to launch a groundbreaking real-time tax system to monitor and tax cryptocurrency transactions. This move is part of a broader strategy to curb tax evasion and regulate the country's burgeoning crypto market. 

Key Points:

1.    Integration with Exchanges: The new system will integrate directly with cryptocurrency exchanges and marketplaces, allowing the KRA to track and record transactions in real-time

2.    Transaction Details: The system will capture crucial information including transaction date, time, type, and value

3.    Market Size: KRA estimates that between 2021 and 2022, Kenya's cryptocurrency market transacted approximately KES 2.4 trillion ($18.5 billion), representing nearly 20% of the country's GDP

4.    Tax Calculation: The system will automatically calculate taxes owed based on cryptocurrency transactions and assess duties according to Kenya's tax laws and regulations

Implications:

This move signals a significant shift in Kenya's approach to cryptocurrency regulation. While the sector remains largely unregulated by reporting authorities like the Central Bank of Kenya and Capital Markets Authority, the KRA asserts that earnings from crypto are legally taxable under the Income Tax Act.

The implementation of this system could have far-reaching consequences for crypto traders and investors in Kenya. It may lead to increased transparency in the market but could also dampen enthusiasm for cryptocurrency trading due to stricter oversight.

Broader Context:

This initiative aligns with recent calls from Kenya's Finance Minister, John Mbadi, for the KRA to embrace new technologies like blockchain to enhance domestic resource mobilization. It's part of a larger trend of governments worldwide seeking to regulate and tax cryptocurrency transactions.

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Mastercard's Start Path Program: Nurturing the Future of Fintech

Mastercard has just announced its latest cohort for the Start Path Emerging Fintech program, and it's packed with potential game-changers. Ten innovative startups have been selected to join this globally renowned initiative, each bringing something unique to the table.

 A Diverse Cohort

The selected startups are working on cutting-edge solutions across various domains:

• Sustainability: Five companies showcased their commitment to sustainability during NYC Climate Week, focusing on impact data calculations
• Cybersecurity: Some startups are developing advanced technologies to combat cyber threats
• Digital Transformation: Innovations to streamline digital transactions are a key focus
• Travel Industry: A subset of the cohort is working on revolutionizing the travel sector

Meet the Innovators

The ten startups joining this cohort are:

1.    AWorld

2.    Bankingly

3.    FootprintLab

4.    HowGood

5.    Inovat

6.    Lasso Security

7.    Reewild

8.    UrbanFox

9.    Uvicuo

10.  Vaayu

What This Means for the Future

This cohort represents a significant step towards a more sustainable, secure, and convenient digital economy.  By partnering with Mastercard, these startups will have the opportunity to scale their innovations and reshape the fintech landscape.

As we watch these startups grow and develop, we expect to see new solutions addressing some of the most pressing challenges in the payment technology industry. From more accurate sustainability metrics to enhanced cybersecurity measures, the future of fintech is looking brighter than ever.

Stay tuned to #AliTalksTech for updates on these startups and their journey through the Start Path program. The next big fintech breakthrough could be just around the corner!

ZEPZ Secures $267 Million: A Game-Changer for African Remittances

In a significant move that underscores the importance of remittances to Africa's economy, UK-based fintech giant Zepz (formerly WorldRemit) has raised a staggering $267 million in funding. This capital injection, led by venture capital firm Accel, aims to fuel ZEPZ's expansion in its core African markets and beyond

The Remittance Lifeline

Remittances are the lifeblood of many African economies, providing crucial financial support to millions of families. ZEPZ's expansion could potentially streamline these vital money transfers, making them more accessible and efficient for countless Africans relying on funds from relatives abroad.

The African Connection

Zepz 's roots run deep in Africa. Founded in 2010 by Somali refugee Ismail Ahmed, the company was born out of frustration with high transaction fees for sending money to East Africa. Today, ZEPZ operates in over 150 countries, including key African nations such as South Africa, Uganda, Kenya, Rwanda, and Tanzania.

A Word of Caution

While this funding round is undoubtedly positive news for the remittance sector, it's crucial to remain vigilant about the cost of sending money into the African corridor. High fees can significantly erode the value of remittances, impacting the recipients who often need every cent.

The Road Ahead

ZEPZ CEO Mark Lenhard emphasizes the company's growth potential, particularly during times of crisis: 

"We certainly saw it during Covid. We'll see it when there's an earthquake. We'll see it when there's geopolitical unrest in the country. More money will flow in because people get concerned about their families, about their communities and that's their time of need."

This perspective highlights remittances' critical role in supporting African communities during challenging times.

The Bigger Picture

The success of ZEPZ reflects a broader trend in fintech funding. After a period of valuation slumps, fintech companies are making a comeback in 2024. This resurgence could lead to increased competition and innovation in the remittance space, potentially driving down costs for African consumers.

As we celebrate this milestone for ZEPZ, let's continue to advocate for fair and affordable remittance services that truly benefit African communities. The future of African remittances looks promising, but vigilance and continued innovation are key to ensuring that these financial lifelines remain strong and accessible for all.

Jamie Dimon's African Expedition - A Game Changer for JP Morgan and African Finance?

In a bold move that's set to reshape the landscape of African financial services, Jamie Dimon, the CEO of JP Morgan Chase, has recently embarked on a strategic visit to the continent. This trip marks a significant milestone in JP Morgan's expansion plans and signals a new era of investment in Africa's burgeoning financial sector.

JP Morgan's African Ambitions

Jamie Dimon 's visit to Africa is not just a casual tour; it's a clear indication of JPMorganChase 's serious intentions to establish a stronger presence in the region. The banking giant is eyeing opportunities in various African countries, recognizing the continent's immense potential for growth and financial innovation.

Key Focus Areas:

• Expanding JP Morgan's footprint across multiple African nations
• Exploring partnerships with local financial institutions
• Investing in digital banking infrastructure to reach underserved populations 

Implications for the African Financial Ecosystem

Dimon's visit carries profound implications for the African financial services sector:

1. Increased Foreign Investment: JP Morgan's interest is likely to attract other global financial players, potentially leading to a surge in foreign direct investment in African financial services.

2. Technology Transfer: The bank's fintech and digital banking expertise could accelerate technological adoption in the African banking sector.

3. Job Creation: As JP Morgan expands its operations, it's expected to create numerous high-skilled job opportunities for local talent.

4. Enhanced Financial Inclusion: JP Morgan's resources and innovative approaches have the potential to reach previously unbanked populations across the continent.

Challenges and Opportunities

While the expansion presents exciting prospects, JP Morgan will need to navigate:

• Diverse regulatory environments across different African countries
• Competition from established local banks and fintech startups
• The need for tailored products that meet unique local needs

However, these challenges also present opportunities for innovation and collaboration that could benefit both JP Morgan and the African financial ecosystem.

Looking Ahead

Jamie Dimon's African tour is more than just a business trip; it's a statement of intent. As JP Morgan charts its course for expansion in Africa, we can expect to see significant developments in the continent's financial services sector. This move could potentially catalyze a new wave of growth, innovation, and financial inclusion across Africa.

 Stay tuned to #AliTalksTech for more updates on this developing story and its impact on the global financial landscape.

Digital Transformation Reshapes African Financial Landscape: CIH Bank's Bold Move

Morocco's CIH BANK has taken a significant step towards digital transformation by partnering with Backbase, a leading engagement banking platform provider. This strategic move underscores the growing importance of digital innovation in the financial services sector, particularly in Africa.

The Rise of Fintech in Africa

Africa's fintech landscape is experiencing unprecedented growth, with the market projected to expand thirteenfold to US$65 billion by 2030. Several factors drive this rapid evolution:

Financial Inclusion: With over half of Africa's 1.4 billion population unbanked, fintech solutions are bridging the gap by providing accessible financial services through mobile technology

Mobile Money Dominance: The continent's high mobile phone penetration has paved the way for widespread adoption of mobile money platforms, revolutionizing how Africans transact and save

Youthful Demographics: Africa's tech-savvy young population is eagerly embracing innovative financial solutions, fueling the fintech boom

Digital Transformation: A Necessity, Not a Choice

CIH Bank's decision to partner with Backbase highlights the critical role of digital transformation in staying competitive. Here's why it matters:

1.    Enhanced Customer Experience: Digital platforms enable banks to offer personalized, seamless services that meet the evolving expectations of tech-savvy customers

2.    Operational Efficiency: Automation and digital processes streamline operations, reducing costs and improving productivity

3.    Data-Driven Insights: Advanced analytics and AI technologies help financial institutions make informed decisions and manage risks effectively

4.    Agility and Innovation: Digital transformation allows banks to rapidly adapt to market changes and introduce new products and services

The African Fintech Revolution

Across the continent, fintech is transforming the financial services landscape:

• Nigeria, Kenya, South Africa, and Egypt are leading the charge, accounting for more than 46% of Africa's total GDP and offering potential financial access to more than 440 million people
• Mobile Money Platforms are expanding rapidly, providing essential financial services to previously underserved populations
• Innovative Lending Solutions are leveraging alternative data to offer microloans to individuals and small businesses.
• InsurTech and RegTech are emerging as key sub-sectors, making insurance more accessible and helping navigate regulatory complexities

Looking Ahead

As Africa's fintech sector continues to evolve, we can expect to see:

• More customized solutions targeting specific population segments, such as farmers
• Increased integration of financial services into everyday economic transactions
• Growing investments in system-building and infrastructure development
• CIH Bank's partnership with Backbase is just one example of the digital transformation sweeping across Africa's financial sector. As more institutions embrace technological innovation, we can anticipate a more inclusive, efficient, and dynamic financial ecosystem that will drive economic growth across the continent.