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Startups Ecosystem Development in Nigeria

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The city of Abuja is not necessarily regarded as the city for Startup Entrepreneurs, but all that is changing with the likes of Abuja Technology Village, Box Office incubator, Ventures Platform, VP, and many other incubators, providing co-working space and physical infrastructure that Startups require to turn their ideas into viable businesses.

I recently met with Kola Aina, Founder, Ventures Platform and our discussion centered on issues in the Startups ecosystem and some of the challenges facing this model of Entrepreneurship.

Speaking on how the journey has been so far with building a community in Abuja, Kola stated that it has been an amazing journey, so far. He stressed that, when he started out, he had big ambitions and he is excited that the Abuja community has received his Startup well with the size of patronage that his co-working space has received, so far.

Speaking on numbers, he said that about 175 co-workers actively use its co-working facilities everyday and these include companies that work out of the park, Startups, Freelancers, Graphic Designers, etc. He stated that there are also 18 people living within the community at any given point in time, and also using the other facilities, such as the gym facility, etc. Kola stated that, up to date, Venture Platform has invested in about 14 companies. He further said that, on the average, these companies have a minimum of 2 or 3 Founders and employ 4 or 5 other people, hence, the spiral effect of that is really something worthwhile, but not yet reconciled to place a figure on.

In terms of events, Kola said that the platform also has events that many people have benefited from. He said he is really amazed at the impact, so far, even as he sees it as just the beginning, he is excited to see what happens next.

Giving reasons why he is building an ecosystem in Abuja that is seen as a city of civil servants and contractors, Kola said, he believes that a community that relies on rent is not sustainable. This, according to him, is because, many of them had to close up because of recession. Kola said he beliefs that tons of young people, if given the right environment and empowerment, can build amazing things and solutions that can then become  sustainable businesses. He said that is what is happening now in Benue, Niger and Kano States, etc., where new tech communities are springing up with young people building solutions and the volume of applications coming up is amazing.

Kola stated that the community on his platform has developed about 900 applications to solve problems in payment, health issues, etc., so, it’s amazing what people can do when empowered.

Reacting to a question on why local investors are not interested in investing in Startups, Kola stated “it is really a sad thing and what we hear is more of talk than action in Nigeria”. He believes that, if the community is able to get the big money bags to support and invest in the Startups, it will be better for the Startups. “Startups may have the best ideas, but if they run out of money, they are dead”, Kola emphasized. “There is more foreign participation in our Startups than we have from within Nigeria and before we know it, many of our Startups are going to be owned by foreign investors” he further stated.

Kola is of the opinion that the government can utilize just between 2% to 5% of the Sovereign Wealth Fund in backing up local VC’s and accelerators, it will make a huge impact.

Kola is of the view that there is no need reinventing the wheel for wealthy Nigerian investors to invest in the tech ecosystem. All they need to do is to take a look at the existing state of the ecosystem and decide where to come in. He stated that, truly, we have enough resources within Nigeria to solve our problems, but the problem we have is that, we are used to the old ways of making money, which are real estate, oil and gas, etc., however, until local investors start to support the tech ecosystem, the nation is not likely to move forward on the continent.

One of the challenges that Startups in the tech ecosystem face is the problem of infrastructure, especially, power. Another problem he identified is the inadequacy of bandwidth. The biggest challenge, according to Kola, however, is that of getting local investors to invest in the tech ecosystem. One other challenge he identified is the quality and commitment of Nigerian Founders, who, he thinks should raise the level of their ambition.

On support from government, Kola was emphatic that Ventures Platform has never received any support from government in any form.

Kola stated that, with VP investing in 14 companies within its accelerator program, the goal is to build companies that can achieve $1 billion valuation and this is possible. This is because some foreign investors, such as Startups from Belgium and Cameroon are interested in teaming up with our Startups and doing business here in Nigeria.

Kola concluded by saying that, the training program that VP carries out has graduated about 10,000 people, so far and that there are also plans of expanding the campus across Africa.

CFA is the Founder, www.CFAtech.ng & Co-producer/Presenter,Tech Trends on Channels Television

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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E-Business

Opera in Race to Acquire Nigeria’s Telnet

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Telnet Nigeria Limited, the Nigerian technology conglomerate, is near closing a deal to sell stakes in its mobile money business subsidiary, Paycom to the maker of popular Opera Mini browser, Opera Software, according to Technology Times.

 

According to the reports Telnet and Opera will this month sign the dotted lines of an agreement by which the Nigerian technology company sells controlling stakes in its fully-owned Paycom to the browser maker. That is barring any last-minute change.

 

Opera has been in exclusive negotiations with Telnet on the acquisition hoped to extend the footprint of its mobile payment platform, OPay (Opera Pay) into the Nigerian market as part of its African expansion strategy, people conversant with the situation told Technology Times on condition of anonymity.

 

With the deal sealed, Nigeria will be the next African market for the rollout of the OPay payment platform developed by Opera to let users shop and pay for services and products through their mobile or web browser.

 

Talks between the two companies have shifted into higher gear after the operating licence of Paycom was renewed by the Central Bank of Nigeria, the banking industry regulator that also oversees the mobile money sector.

 

Nigeria has issued licences to 21 companies to deliver mobile money services in the country and they have been directed to achieve a minimum capital base of N2 billion by CBN.

 

The banking industry regulator has also issued regulatory guidelines that defines the operating terrain rules as part of plans by the CBN towards “promoting a sound financial system in Nigeria.”

 

According to the CBN rules, Nigeria has adopted two models of mobile money services under which industry players operate:

 

The Bank-led Model: “This is a model where a bank either alone or a consortium of banks, whether or not partnering with other approved organizations, seek to deliver banking services, leveraging on the mobile payments system. This model shall be applicable in a scenario where the bank operates on stand-alone basis or in collaboration with other bank(s) and any other approved organization. The Lead Initiator shall be a bank or a consortium of banks.”

The Non-Bank led Model: “This model allows a corporate organization that has been duly licensed by the CBN to deliver mobile money services to customers. The Lead Initiator shall be a corporate organization (other than a deposit money bank or a telecommunication company) specifically licensed by the CBN to provide mobile money services in Nigeria.”

 

 

Meanwhile, the impending deal between Telnet and Opera is coming as the two entities are seen to be joining forces to advance Opera’s plans to extend its OPay platform into the Nigerian market by acquiring controlling stakes in Paycom.

 

PayCom Nigeria Limited, a subsidiary of Telnet, which was granted licence by the CBN in August 2011 to operate in the mobile payment sector recently had its licence renewed by the banking sector regulator, a development that was to complement progress towards a deal, according to a Technology Times source.

 

The indications of the closed deal comes one year after Opera, the developer of the most popular mobile browser in Africa, announced its plan to invest N3 billion ($100 million) across Africa over two years.

Opera last year unveiled an ambitious plan to deepen its stakes in the emerging African internet ecosystem where the technology company “is planning to seek local partners to integrate value-added services, mobile payment and data bundling into its browser product.”

 

Opera said at the time that the alliance with local partners “will grant consumers access to quality content and services, giving them the ability to transact more easily on their mobile devices. The range of services to be added over the next 12 months will create a content and services hub that will provide African users with a truly unique experience.”

 

As part of the N30 billion African investments plan, Opera said that it plans expanding with new offices across select cities including Lagos, Nigeria’s commercial capital, and also hire 100 people for these offices over the next three years.

 

Nigeria’s Telnet is a technology industry pioneer and leading player that is reputable as a factory for successful spin-offs that counts the likes of companies like Interswitch, the e-payment market leader; IPNX, a frontline ISP in the country, iTeco, a leading network business, alongside Paycom, among

 

 

 

 

 

 

 

 

 

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NITDA Says MDAs Work in Silos, Neglect eGovernment

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Dr. Isa Pantami, Director General of NITDA

Ministries, Departments and Agencies (MDAs) of government in the country are operating in silos, thereby making nonsense of e-government policy, Dr Isa Ali Ibrahim Pantami, directo-general, National Information Technology Development Agency (NITDA), has said.

 

Pantami, at the opening ceremony of the Stakeholders’ Engagement on Nigeria’s e-Government Interoperability Framework (Ne-GIF) in Abuja, said that ‘’Silo e-Government systems would not help government deliver public services efficiently. Advanced phases of service innovation cannot be achieved without integrating many back-office functions.

 

‘’For instance, registering a Limited Guarantee Company in Nigeria requires visit to at least three institutions: CAC, FIRS, and Attorney General of the Federation physically and/or through their portals. However, the Nigerian government is becoming more complex and wide-reaching than ever before and citizens believe and expect that public services must be delivered effectively and at speed. This is inefficient, inconvenient, time consuming and makes citizens pay more’’, Dr Pantami said.

 

He said through robust e-Government applications, it is possible to make the transactions and get the service delivered on a single portal, adding that citizen-centered service delivery involves breaking up silos, integrating across agencies, innovating new ways of doing business, and creating a service-focused culture.

 

According to him, it has been proven that one of the strategic directions for e-government is to adopt a Whole-of-Government (WoG) approach for deriving expected value from IT.

 

He said WoG involves back-end offices re-engineering, consolidation and integration of business processes across government agencies to deliver effective and consolidated services through the front-end offices at an affordable cost.

 

‘’WoG is a deliberate path to attain Government Digital Transformation (GDT) we desire. GDT views Government as an entity by promoting the idea of ONE GOVERNMENT but still respect individual MDA’s mandates while providing government digital services.

 

‘’Fundamentally, e-Government or digital service delivery has three models or approaches: Government-to-Government (G2G), Government-to-Business (G2B) and Government-to-Citizens (G2C).

 

‘’Transforming G2G is the foundation for providing efficient digital services. It enables and drives the other delivery models.

 

‘’However, the workability of any G2G is determined by the level of IT systems integration and standardization considering the social, institutional, legal, economic and political systems of a particular country.

 

‘’The main difficulty in achieving advanced G2G is the interoperability requirements of IT systems of various government agencies. For instance, compliance with Executive Order 001 requires advanced G2G,” he said.

 

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GSMA Welcomes GDPR, Raises Concerns Over Inconsistencies in Privacy Regulations

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The GSMA, which represents the interests of nearly 800 mobile operators worldwide, who collectively serve more than 5 billion customers globally, welcomes the protection brought to consumers by Europe’s new General Data Protection Regulation (GDPR).

However, while this new regulation, which goes live on 25 May, strikes a balance between enabling industry to flourish and protecting the rights of individuals, mobile operators are deeply concerned by inconsistencies in the application of European privacy regulations that could risk consumers’ access to new communication services in the future.

John Giusti, Chief Regulatory Officer at the GSMA, explains: “Consumers should rightfully celebrate the new protections the GDPR brings them.

The GDPR is driving up standards of responsible data governance, not only in the EU, but also around the world, stimulating efforts to find a common ground for data privacy.

“The more compatible data privacy laws are with each other, the faster we can move to a world where countries allow personal data to flow relatively freely between them.

Consumers’ ability to benefit fully from the next wave of innovation, built on technologies such as 5G and artificial intelligence (AI), will depend on this unhindered flow of data between countries.

“However, the benefits of GDPR could easily be undermined if the current regulatory imbalance between the telecommunications industry and other players in the digital world is not resolved.

Telecom operators are still subject to additional obligations vis-à-vis other digital players imposed by the ePrivacy Directive.

When the European Council shortly decides on their position on the proposal to replace the current directive with an ePrivacy Regulation (ePR), we must not ignore the impact of the ePR on both existing and future services that are critical to Europe’s digital growth.

“The specific obligations imposed by the European Commission’s current proposal for the ePR would be detrimental to the mobile industry’s ability to innovate and invest in future technologies, such as 5G, the Internet of Things, AI and big data.

Data privacy regulation is essential, but fair competition and consumer protection require the consistent application of privacy regulations.

“The current ePR proposal only allows the use of communications metadata under very limited circumstances, which could prevent the legitimate, unobtrusive use of data across a number of sectors, negatively impacting society and the European economy.

In contrast, the generally applicable GDPR strikes a better balance between the ability to innovate and the protection of people’s personal data. Its principles should therefore also be applied to processing metadata to allow telecoms operators to equally compete in a responsible way with other market players in the digital value chain.

“Europe needs greater alignment between the ePR and the GDPR to support individuals’ fundamental rights, while permitting technological developments and spurring investment.

Otherwise, this lack of consistency in European privacy regulation could harm consumers’ interests in the long term by denying them the potential benefits of new communications services in the future.”

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