Here are three big stories from Africa’s business and policy landscape you (probably) didn’t miss but should keep in mind this week:
BDCs are back in Nigeria
The Central Bank of Nigeria has ended its two-year ban on selling forex to Bureau De Change (BDC) operators. This decision aims to bring stability to Nigeria’s volatile foreign exchange market. Under its (now ousted) governor, Godwin Emefiele, the apex bank banned the sale of forex to BDC operators in 2021, hoping to stabilise the naira’s value. However, that decision only increased the dollar’s scarcity and widened the gap between the official and parallel market rates.
In a statement published on its website on Friday evening, the CBN said the spread on buying and selling of FX by BDCs will fail within a range -2.5% to +2.5% of the FX window’s average rate from the previous day. The naira jumped last week, exchanging for N855/$1 on the parallel market as of Friday morning and trading at around N744 on the I&E window.
Patricia’s controversial comeback
Patricia, one of Nigeria’s foremost fintechs, is making a controversial comeback to the market. On Friday, the retail trading app announced converting the bitcoin and other tokens their customers own to its Patricia Token (PTK) token.
In May, Patricia froze withdrawals for users of its platform after sharing that it was the victim of a breach. According to the company, Bitcoin and naira assets had been compromised, and Patricia told customers that it had lost an undisclosed sum. Now, the company hopes the launch of Patricia Tokens will bring it back on its feet.
However, there isn’t a lot of public confidence in Patricia’s decision, and for good reason. In April, it launched the Patricia Plus app to expand its offerings. But the result resembled a bank run. While customers had withdrawal restrictions on the old app, the new app had no such restrictions, and many customers quickly tried to move their funds. Like most bank runs, the retail trading app did not have immediate liquidity to meet those needs.
Global warehouse costs are rising
On the global scene, warehouse costs are surging, causing retail businesses to move their businesses online and making manufacturers reevaluate their supply chains. According to data compiled by Savills Plc, rents for the best warehouses jumped by almost 12% in the year through June.
London is the most expensive city in the world for warehouse space, with the best space costing $41.68 a square foot. Sydney, Los Angeles, Hong Kong and Northern New Jersey are other countries in the top five.
ICYMI: Market roundup
- The Nigerian stock market declined slightly as the All-Share Index lost -0.93% last week to close at 64,721.09 index points.
- Top gainers were CWG Plc (25.83%), The Initiates Plc (23.40%), John Holt Plc (20.83%), Linkage Assurance Plc (18.07%), and Prestige Assurance Plc (17.39%). Top decliners were Sunu Assurances Nigeria Plc (-28.70%), Guinea Insurance Plc (-25.64%), NEM Insurance Plc (-10.00%), Unity Bank Plc (-9.79%), and Eterna Plc (-9.39%).
- The naira jumped last week, exchanging for N855/$1 on the parallel market and N744 on the I&E window.
- Brent crude closed for the week at $85.41, while WTI closed at $81.91.
- The cryptocurrency markets slumped 11.02% to $1.05 trillion. Bitcoin dipped 11.38% to $26,037, Ethereum dropped by 9.49% to $1671 and BNB declined by 10.75% to $214.65.
- Ghana’s Oyster Agribusiness, a tech-driven agricultural enterprise, raised $310,000 in grants and debt funding.
- d.light, a provider of affordable household products and finance for low-income families, obtained a $30 million securitization facility from the Eastern and Southern African Trade and Development Bank Group (TDB Group).
- Kenyan startup Ed Partners secured $1.5 million in debt funding from social impact investor Oikocredit. This funding will enable Ed Partners to offer affordable financing solutions to private schools.
- Founders Factory Africa secured an extra $114 million in funding to expand its model for better support of founders within the African tech ecosystem.
