By Adedapo Adesanya
Leading United States digital payment platform, Square, founded by Twitter Chief Executive Officer, Mr Jack Dorsey, has announced the acquisition of Australia’s Afterpay Limited for $29 billion.
Afterpay specializes in the “buy now, pay later” model that offers users staggered payments, often without extra charge.
The plan is for Square to integrate Afterpay into both its consumer Cash App and its Seller product for small businesses, which could allow smaller merchants to offer staggered payments at checkout as well.
Afterpay lets consumers purchase items on credit and pay later with a series of instalments. It is particularly popular with younger consumers, who may not have a credit card, to buy clothes, beauty products and homewares since there are no fees or interest on the loan as long as people pay on time.
The fintech application is available in Australia, the United States and Canada, as well as the United Kingdom, France and Italy. It has 100,000 suppliers worldwide and boasts 16.2 million customers.
The merger and acquisition, which is expected to close in the first quarter of 2022, will be done entirely through an exchange of shares and will value Afterpay at approximately $29 billion, according to a joint statement.
After completion of the deal, which offers a 30 per cent premium on Afterpay’s share price at closing Friday, shareholders will own 18.5 per cent of the new company’s capital.
“The acquisition aims to enable the companies to better deliver compelling financial products and services that expand access to more consumers and drive incremental revenue for merchants of all sizes,” the two groups said in the statement.
“Square and Afterpay have a shared purpose. We built our business to make the financial system more fair, accessible, and inclusive,” Mr Dorsey said in the statement, where he serves as the CEO of Square, which operates the mobile payment platform Cash App.
The deal is projected to also help boost Cash App’s total user base by adding Afterpay’s 16 million users to Cash App’s existing user base of 70 million annual users.
According to Afterpay co-founders, Messrs Anthony Eisen and Nick Molna, “the transaction marks an important recognition of the Australian technology sector as homegrown innovation continues to be shared more broadly throughout the world.”
St. Petersburg to Hosts Second African Leaders Summit
By Kester Kenn Klomegah
With high optimism and a desire to strengthen its geopolitical influence, Russian authorities are gearing up to hold the second African leaders summit in St. Petersburg scheduled for early November 2022.
The gathering, as expected, will focus on enhancing further constructive cooperation and advancing integration processes within the framework of the African Union and a number of sub-regional structures.
In their first joint declaration, emerging from the Russia-Africa summit at the initiative of African participants a new dialogue mechanism—the Russia-Africa Partnership Forum—was created.
The declaration stipulated that all top-level meetings take place within its framework once every three years, alternately in Russia and in an African state. It says further that the foreign ministers of Russia and three African countries—the current, future and previous chairpersons of the African Union—will meet for annual consultations.
Understandably, St. Petersburg, the preferred venue, was chosen primarily due to the continuous political instability in Addis Ababa, Ethiopia. Initially, Moscow bagged hopes on using the Chinese financed and newly constructed African Union headquarters which has modern facilities for large-scale international conferences and the city itself easily accessible with effectively built first-class Ethiopian Airlines network to and from many African countries. An additional advantage is that African government representatives and heads of many international organizations work in this city.
South Africa and Egypt, as possible alternatives, were thoroughly discussed as South Africa and Russia are members of BRICS, and Egypt has excellent post-Soviet relations. Reminding that the first summit held in Sochi was co-chaired by President Vladimir Putin and Egyptian President Abdel Fattah el-Sisi, who also rotationally during that year headed the African Union.
The large-scale Russia-Africa summit, held in Sochi in October 2019 and described as the first of its kind in the history of Moscow’s relations with Africa, attracted more than 40 African presidents, as well as the heads of major regional associations and organizations.
According to official documents, there were a total of 569 working meetings that resulted in 92 agreements and contracts, and memoranda of understanding signed as part of the summit.
The first summit opened a new page in the history of Russia’s relations with African countries. Sochi witnessed a historic final communiqué and impressive pledges and promises were made in various speeches and discussions.
Last November, a group of 25 leading experts headed by Sergei A. Karaganov, the Honorary Chairman of the Presidium of the Council on Foreign and Defence Policy, released a report that vividly highlighted some spectacular pitfalls and shortcomings in Russia’s approach towards Africa.
It pointed to Russia’s consistent failure in honouring its several agreements and pledges over the years. It decried the increased number of bilateral and high-level meetings that yield little or bring to the fore no definitive results. In addition, insufficient and disorganized Russian African lobbying combined with a lack of “information hygiene” at all levels of public speaking, says the policy report.
Writing early January on the policy outlook and forecast for 2022, Andrey Kortunov, Director General of the Russian International Affairs Council (RIAC), acknowledged the absolute necessity for consolidating Russia’s positions in Africa.
“A second Russia-Africa summit is planned for the fall of 2022. Its first edition, held in Sochi in October 2019, raised many hopes for the prospects of an expanded Russian presence in Africa. Obviously, the COVID-19 pandemic has made some adjustments to these plans, preventing the parties from reaching the expected levels of trade and investment.
“Nevertheless, Africa still retains a considerable interest in interaction with Russia, which could act as an important balancer of the prevailing influence of the West and China in the countries of the continent,” he opined.
Kortunov suggested, therefore, that 2022 could become a “Year of Africa” for Moscow, a year of converting common political agreements into new practical projects in energy, transport, urban infrastructure, communications, education, public health, and regional security.
Some policy experts expect high symbolism at the 2022 Russia-Africa summit. For example, Andrey Maslov, Head of the Centre for African Studies at Moscow’s Higher School of Economics, said that preparations for the second summit would shape the Russia-African agenda; visits would become more frequent and Africa would receive greater coverage in Russian media.
Instead of measuring the success of the summit by how many African leaders attended, as happened in 2019, the parties will finally give greater attention to the substance of the agenda, which is already under development. Russia should try to increase its presence in Africa while avoiding direct confrontation with other non-regional and foreign players, he underlined.
According to him, the volume of Russian-African trade increased, for the first time since 2018, diversifying both geographically and in the range of goods traded. Shipments of railway equipment, fertilizers, pipes, high-tech equipment and aluminium are growing and work continues on institutionalizing the interaction between Russia and the African Union.
“A number of conflicts are also causing alarm, primarily those in Ethiopia, Libya, Guinea, Sudan and especially the Republic of Mali where France and the EU are withdrawing their troops. In 2022, Russia will try in various ways to play a stabilizing role for Africa and assist in confronting the main challenges it faces – epidemics, the spread of extremism and conflicts, and hunger,” Maslov told The Moscow Times.
A dialogue would begin on Africa formulating its own climate agenda, he said and added: “Africa is beginning to understand that it does not need a European-style green agenda and will demand compensation from the main polluting countries for the damage the climatic changes have caused to the ecosystems of African countries. Russia is likely to support these demands.”
In an emailed interview, Steven Gruzd, Head of the African Governance and Diplomacy Programme at the South African Institute of International Affairs (SAIIA), said Russia needs to upgrade or scale up its collaborative engagement with Africa. It has to consider seriously launching more public outreach programmes, especially working with civil society to change public perceptions and the private sector to strengthen its partnership with Africa. In order to achieve this, it has to surmount the challenges, take up the courage and work consistently with both private and public sectors and with an effective Action Plan.
He told IDN: “I would largely agree that there is a divide between what has been pledged and promised at high-level meetings and summits, compared to what has actually materialized on the ground. There is more talk than action, and in most cases, down the years intentions and ideas have been presented as initiatives already in progress. It will be interesting to see what has been concretely achieved in reports at the forthcoming second Russia-Africa summit scheduled for late 2022.”
Despite the challenges, Moscow plans to boost Russia’s presence in Africa noted Gruzd who also heads the Russia-Africa Research Programme initiated last year at SAIIA, South Africa’s premier research institute on international issues. It is an independent, non-government think tank, with a long and proud history of providing thought leadership in Africa.
Without doubts, Russia and African leaders will draw a comprehensive working map based on the discussions in St. Petersburg. The summit achievements will help to consolidate the aspirations of the African continent and African nations as fully as possible, and chart ways for materializing common priorities of Russia and the African countries within the framework of the African Union’s Agenda 2063 and the 2030 Agenda for Sustainable Development.
Kenya Records $55.1bn Mobile Money Transactions in 11 Months
By Adedapo Adesanya
Kenya has continued to maintain its position as Africa’s most remarkable mobile money market as the use of the service hit a historic high in 2021 after users transacted 6.24 trillion shillings (equivalent to $55.1 billion) on phones between January and November in 2021.
This indicated a 20 per cent increase from the previous year, surpassing the $45.9 billion transacted in the entire 2020, the Central Bank of Kenya (CBK) said in a new data released on Monday.
The surge in transactions came despite the government removing COVID-19 subsidies at the start of 2021.
The Kenyan government at the onset of the pandemic in the nation in March 2020 made all mobile money transactions worth $8.83 and below free as well as bank and mobile transactions.
This boosted usage and saw eight million subscribers join the service as cashless transactions increased, according to the CBK.
Upon removal of the subsidies, usage of the service was expected to decline or slow down but the opposite has happened, according to the East African country’s top lender.
It was observed that the highest ever mobile money transaction in a month was recorded in November at $5.5 billion as the number of agents hit a high of 299,053 and subscriptions at 67 million, said the CBK.
Kenya is regarded as the frontier of mobile money, starting the service as early as 2007 and this has transformed the everyday lives of most Kenyans, disrupting the traditional banking system and capturing the previously unbanked market and driving financial exclusion.
With ease brought about by the service, it allows for deposits and withdrawals of cash, bank account transfers, the payment of bills from electricity to school fees, loan and savings transactions, and the receipt of salaries.
A large proportion of the population is employed in cities, sending money home to families in rural areas. As a result, mobile money agents in cities mostly receive deposits of cash, whilst agents in rural areas mostly pay out withdrawals.
The reliability of the system rests heavily on active liquidity management; rural agents have an efficient system of replenishing their cash resources once these have been swapped out for mobile money via customer withdrawals.
Kenya Slashes Power Costs of Consumers by 15%
By Adedapo Adesanya
Kenya has announced a 15 per cent reduction in power costs, handing relief to thousands of homes and industries burdened by the high cost of living and production.
The East African country’s Ministry of Energy in a statement released in the capital Nairobi said the reduction takes effect immediately and would cover the entire 2022 period.
“The tariff reduction is a fulfilment of a commitment made by President Uhuru Kenyatta to the nation, that the first tranche of reduction, 15 per cent, will be reflected in the bills covering the end of the year in 2021,” said the ministry.
The government institution observed that the reduction will boost livelihoods and economic growth by reducing the cost of living, putting more money in Kenyans’ pockets and reducing the cost of doing business.
The ministry said it is working to see the second 15 per cent reduction is affected in the first quarter of the year, bringing the total cut to 30 per cent.
The 30 per cent cut will see consumer costs drop from an average of 24 shillings (about 0.21 U.S. dollars) per kilowatt-hour to 16 shillings (about 0.14 US Dollars).
Kenya’s demand for electricity has sustained an upward trend, growing at an average rate of 4.5 per cent year-on-year driven by rising economic activities.
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