Xero's big splash in South Africa

Today: Nigeria maintains government borrowing threshold at 5%.                                                                                                                                                                                                                                                                                                                                                                                                                 September 18, 2024 | [Read Online]( In partnership with [moniepoint logo] [Lire en Français]( [اقرأ هذا باللغة العربية]( Good morning ☀️ We’re three weeks away from Moonshot 2024. Here’s your reminder to join Africa’s most audacious thinkers at a global conference for change. The good news is that if you’re seeing this, you get 20% off tickets to Moonshot 2024. All you have to do is enter the coupon code “MSTCD” [for local tickets](, and “MSTCD1” [for international tickets](. [today's edition image] - [Regfyl raises $1.1 million](#Story1) - [Xero’s big splash in South Africa](#Story2) - [CBN maintains government borrowing threshold at 5%](#Story3) - [Nigeria pushes for eNaira adoption with MDAs](#Story4) - [The World Wide Web3](#Story5) - [Opportunities](#Story6) Funding Regfyl raises $1.1 million to strengthen its compliance-as-a-service product [Regfyl co-founders Tunde Ibidapo-Obe and Tomiwa Erinosho](Image Source: Regfyl In finance, fraud is inevitable. It’s the most common [crime in the UK](, making up nearly half of all criminal activities in the region. Despite its prevalence, there appears to be no definitive solution to fraud, as bad actors continuously evolve their tactics and find new ways to exploit the system. In [Nigeria, banks lost $25.7 million to fraud]( in Q2 2024, marking a staggering 1,784.94% increase from the previous quarter. Several startups are tackling fraud in Nigeria's financial sector by developing digital identity verification and detection tools to curb fraudulent activities. The thinking is that by properly identifying customers, the incidence of fraud can be reduced through documentation of perpetrators and information sharing. [Regfyl](, one of the newer entrants, has raised $1.1 million in pre-seed funding from Rally Cap, Techstars, DCG, Musha Ventures, Africa Fintech Collective, and others. Founded in 2023 by Tunde Ibidapo-Obe and Tomiwa Erinosho, the startup helps businesses streamline customer onboarding, monitor transactions, and prevent fraud and already serves 20 businesses, including Cowrywise, VFD Bank, and Piggyvest. In an ecosystem where fraud is a growing concern and fraud prevention is a saturated market, Regfyl offers a unified platform that integrates Know Your Customer (KYC) compliance, transaction monitoring, and regulatory reporting—features that competitors like SmileID, Dojah, and Youverify offer separately. The startup uses a subscription model, charging ₦2 million ($1,220) annually for full access and also charging per-use fees for individual screenings. Despite the rise of Regfyl and similar platforms, fraud continues to thrive. One reason may be that technology, while essential, isn’t a silver bullet. Gaps in enforcement, the sophistication of fraudsters, and inconsistent adoption of tools by businesses leave room for bad actors. Regfyl’s goal is to close these gaps by being a one-stop shop for compliance, but the challenge remains whether this tech-led approach can truly curb the rising tide of fraud in Nigeria. //link.mail.beehiiv.com/ss/c/u001.3gD7PSbuofKNJf4aviiyABEwLaotY-cnTvL9XkLJeecz8HFi5aIcJRlOHNPACAGtlq5KbbmzlzCpN5GuBGOUoSMHEQdMvCCErcPqfkCTamGENiBnMw13k66-yrDlLxWUa0skXLnU_wXl4KVW-kSs60g1v9rlk4gFaUDMF7DWkxUL6Oi4iU78pzp4N2mAJ3phviCkkE9WLe62B1LHldgj5MC22yJjJmu3YRhNT5GCOolvlQNG2yLGipZxcHXfWeiwdNOc7DlYpzVEgIOZZxwTZxTaSC5M1yPEV96Tfg-YCg2YrgZ69yfqxPXiLtAKe10KQRqWQtfO0-psnFWbpfe0Sa-Fbgh2D-YH6swBVgwn9uBz2LekoHDIEUWxTJaRKvhVd9saPdBdVjf6d1H7XWaEelav9VM9jaE5gi0c4U3lMIo/49v/09CrQnH1TL-NUqoJ7yvSiw/h10/h001.upKQqiLHLEwcBN2_Z1LZngj2ViMZ4LyU9s8zNJl9ycM Read Moniepoint’s 2024 Informal Economy Report [Moniepoint image]( Did you know that 57.7% of the business owners in Nigeria's informal economy are under 34 years old? [Click here]( to find out more about the demographics of Nigeria’s informal economy. M&As Xero’s big splash in South Africa [Xero and Syft acquisition announcement image](Image source: Xero $70 million. That’s the amount Xero, a global accounting software giant, will spend to snap up Syft, a South African cloud-based reporting and analytics platform. For those who have closely tracked deals and are following the capital markets this year, it’s hard to ignore that the transaction could be riding on Syft’s AI capabilities. AI is proving to be a magnet for investors in 2024, you’d agree. With this acquisition, Xero could grow its reporting and analytics, boosting its services in key markets like the UK, Australia and the US. At $70 million, the acquisition is one of the largest M&A deals in Africa this year. Xero will pay $40 million upfront for the acquisition, including $10 million in shares. The rest—earn-outs and employee-restricted shares—will be paid over three years. Syft will continue to operate as a standalone, but its features will be integrated into Xero’s platform. Founded in 2016 by Matt Stephanou and Vangelis Kyriazis, Syft’s AI financial reporting platform provides small and medium businesses with access to reporting tools. In 2023, the company reported $4.4 million in revenue from 75,000 customers across 80 countries. [Read more about the acquisition here](. //link.mail.beehiiv.com/ss/c/u001.3gD7PSbuofKNJf4aviiyABEwLaotY-cnTvL9XkLJeecz8HFi5aIcJRlOHNPACAGtlq5KbbmzlzCpN5GuBGOUoSMHEQdMvCCErcPqfkCTamGENiBnMw13k66-yrDlLxWU-qjHJKSPJwU-2NJ-VgPKJuyn0SLeo0bxiWu0ic4_R-hF2-1DriEZ7b0AMYu69P8Hbk-Zxrv_c4InuRJDWey_5SyS4lsNYVPeHL103GAHSjfP47p47_ql7UWTcRqDCinlppx7gn2HaYxRdPCNj0hosGUEk4aoZ3xTyq1rKiHLrGg-eDPjHsGsdD0KntUHNPXFN-R8v7EIG0N7RBdCwGEq4xlVomrxTu_UOc9tsfx95UuX4pl5ZCK6Y3Zp2LTlfAD-lHCW01QlAt-ktgUS4GJr4g/49v/09CrQnH1TL-NUqoJ7yvSiw/h17/h001.vnKY1EFZguhYbadt4YZ98pzdsQygU39jL6v8RQ8VGw4 Fincra secures International Money Transfer Operator (IMTO) licence in Nigeria [Fincra image]( Since its inception, Fincra has provided businesses with local payment options. However, with the IMTO licence, Fincra can now manage funds transfers from abroad to Nigerian recipients more efficiently. [Read more here](. Economy CBN maintains government borrowing threshold at 5% [Central Bank of Nigeria](Image source: TechCabal All governments borrow money from their central banks to fund budget deficits. But government borrowing, if left unchecked, can cause problems. When the Central Bank lends the Nigerian government money through the way and means advances, it “prints more money”. But an increase in money supply without a corresponding increase in outputs can trigger inflation. These loans are capped at 5% of the government’s revenue from the previous year, according to Section 38 of the CBN Act. Yet that hasn’t been the case. Government borrowing exceeded the threshold under the Godwin Emefiele-led CBN. President Buhari’s administration borrowed a record ₦22.7 trillion ($13.8 million) in ways and means advance. Those loans were also left unsettled at the end of the financial year as prescribed by law. Since taking office in September 2023, CBN governor Olayemi Cardoso has taken a different approach. He has talked up a return to orthodox policies and [said the CBN]( will not lend the government until the previous loans are repaid. In new policy guidelines released on Tuesday, the CBN maintained that the ways and means will remain capped at 5%, countering an earlier increase of the threshold to 10% by the National Assembly. It will also determine government borrowing from the sub-accounts of ministries, departments, and agencies (MDAs) to assess the government’s cash position. The critical question is how the CBN will manage the pressure from lawmakers and say no to a federal government that has historically relied on it to print more money to fund budget deficits. //link.mail.beehiiv.com/ss/c/u001.3gD7PSbuofKNJf4aviiyABEwLaotY-cnTvL9XkLJeecz8HFi5aIcJRlOHNPACAGtlq5KbbmzlzCpN5GuBGOUoSMHEQdMvCCErcPqfkCTamGENiBnMw13k66-yrDlLxWU7GPETXb0EYw4ntr0YcV5vAP09mqJpLA4-4kPizM6qDH08aS_Hx6Xq00VmNenoQTDXzbF-mEkjNkKIeIQqU3HNzCxJc710qudoupKBBGht70Nq5BZxznd79KHUSDSw18WVIbUi-I3t5yuATrQjbrk-nEmH9H34DovW2x6nbBdUJlR9wEaENx0QxJrElnY_KVuTo0-5IMWi-6t02iA1LNlFItCQN7g8PIKDRxZj0v_BmfUdyJFTRER2LVdklTHkoc9jAohJRFcUmx2yAkYsR1vQ_KTjPHQACQ94ShJmkLs7d6qTFfFBH1koI-1ydpdYrG-/49v/09CrQnH1TL-NUqoJ7yvSiw/h24/h001.Z3zIN7mziJruQHdcbopaYu3E7vkY8mn_sqZ1WXehdgw Psst 👀 Here’s Paystack Developer Contributor of the month [Paystack image]( Microsoft Engineer Ekene Ashinze built the Angular Paystack Library, a module that helps developers accept payments in their Angular apps with Paystack. Discover his journey in creating the library and how it’s opened doors for him both locally and globally. [Learn more →]( Regulation CBN introduces new use cases for eNaira [Nigeria will try again for eNaira adoption](Image source: TechCabal If at first you don't succeed, try, try again. Nigeria’s Central Bank is taking that dictum seriously as it reintroduces new use cases for its forgotten digital currency, the eNaira. The eNaira was introduced in 2021 as part of the CBN’s attempt to promote its cashless policy. However, the project had a low adoption rate with just [1.5% of the eNaira wallets]( in use. Total eNaira transactions per week were about ₦14,000 ($8). The eNaira lacked compelling use cases. Most merchants were either unaware of the currency or entirely refused it as a medium of payment. In a bid to boost the adoption of the eNaira, the CBN waived transaction fees for the eNaira and introduced the use of digital currency as a payment option for receiving remittances. However, all of this has failed to yield the needed results. The eNaira makes up less than 1% of the total currency in circulation. In its continued push for adoption, the [CBN will now pay government accounts]( using the eNaira. It will also allow Ministries, Departments, and Agencies (MDAs) to initiate vendor and beneficiary payments using the digital currency. Once implemented, what this means is that you’ll be able to pay taxes, fees, and other government charges using the eNaira. Government agencies will be able to pay their suppliers and beneficiaries using the eNaira. In essence, the CBN is betting on government transactions to breathe life into the eNaira. Whether this new push will finally move the needle on adoption remains to be seen—but for now, the digital currency is getting another chance to prove its worth. //link.mail.beehiiv.com/ss/c/u001.3gD7PSbuofKNJf4aviiyABEwLaotY-cnTvL9XkLJeecz8HFi5aIcJRlOHNPACAGtlq5KbbmzlzCpN5GuBGOUoSMHEQdMvCCErcPqfkCTamGENiBnMw13k66-yrDlLxWU7GPETXb0EYw4ntr0YcV5vAP09mqJpLA4-4kPizM6qDH08aS_Hx6Xq00VmNenoQTDXzbF-mEkjNkKIeIQqU3HNzCxJc710qudoupKBBGht70Nq5BZxznd79KHUSDSw18WVIbUi-I3t5yuATrQjbrk-nEmH9H34DovW2x6nbBdUJlR9wEaENx0QxJrElnY_KVuTo0-5IMWi-6t02iA1LNlFItCQN7g8PIKDRxZj0v_BmfUdyJFTRER2LVdklTHkoc9AwEROhi28f0SCzU35djJJE_iRWsCIAaONNw03iFp_vzjZnkGp3fBbdV87Gq-7X6v/49v/09CrQnH1TL-NUqoJ7yvSiw/h32/h001.G6l2jK7hB8v_Uc_2zUswAtfv4SNDdPYE_Lg7dI6yl5M CRYPTO TRACKER The World Wide Web3 Source: [CoinMarketCap logo] Coin Name Current Value Day Month Bitcoin $60,650 + 4.16% + 3.22% Ether $2,322 + 2.08% - 11.74% Sui $1.19 + 11.08% + 40.45% Solana $131.48 + 0.39% - 8.03% * Data as of 05:30 AM WAT, September 18, 2024. //link.mail.beehiiv.com/ss/c/u001.3gD7PSbuofKNJf4aviiyABEwLaotY-cnTvL9XkLJeecz8HFi5aIcJRlOHNPACAGtlq5KbbmzlzCpN5GuBGOUoSMHEQdMvCCErcPqfkCTamGENiBnMw13k66-yrDlLxWU7GPETXb0EYw4ntr0YcV5vAP09mqJpLA4-4kPizM6qDH08aS_Hx6Xq00VmNenoQTDXzbF-mEkjNkKIeIQqU3HNzCxJc710qudoupKBBGht70Nq5BZxznd79KHUSDSw18WVIbUi-I3t5yuATrQjbrk-nEmH9H34DovW2x6nbBdUJlR9wEaENx0QxJrElnY_KVuTo0-5IMWi-6t02iA1LNlFItCQN7g8PIKDRxZj0v_BmfUdyJFTRER2LVdklTHkoc97JvZBcrbJLSyiXtBBoie8CK2cuwJukLT7b6qIAlwveiP09oRAzFpFE8nUsNjgrcL/49v/09CrQnH1TL-NUqoJ7yvSiw/h35/h001.qoUk5OC9B4t_jZ8a9EIdPWyeLIuBBVq1Wre3ZctgiaE Opportunities - The Entertainment and Media Hubs Programme funded by the Bill and Melinda Gates Foundation is now open. If you’re an emerging or established content maker in film, TV or the Creator Economy in Nigeria or Kenya, you can apply to get access to the community, skills training, equipment and funding. [Apply here](. - Inside the big stories transforming the Arabian Peninsula and the world. Introducing [Semafor Gulf]( – your go-to source for understanding the rising influence of Saudi Arabia, the UAE, and Qatar. Three times a week, the Semafor Gulf newsroom will bring you original reporting that examines how the region's financial, business, and geopolitical decisions shape the world, from culture and investment to infrastructure, climate, and technology. Navigate the region's capital, influence, and power with Semafor Gulf – [subscribe for free here](. Issue virtual USD cards for you and your customers [Kora image]( Do you want to issue virtual USD cards for your customers and business expenses? Use Kora’s APIs to issue cards, customise your card program, and set your customers' funding limit to your risk level. Get started [here](. [in other news image] - [Destined for clicks: YouTube is driving an astrology boom in Pakistan]( - [Zimbabwe enforces tough penalties to boost telecom service quality and competition]( - [How ETFs are shaping the future of investing in Kenya]( - [South African coal miner Seriti plans to cut over 1,100 jobs]( Written by: Faith Omoniyi, Ganiu Oloruntade, Adonijah Ndege & Muktar Oladunmade Edited by: Olumuyiwa Olowogboyega & Timi Odueso Want more of TechCabal? 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