Weekly Economic Index: Naira plunges, Safaricom-Apple partnership and MultiChoice’s $1.7 billion loss

by MMC
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Here are three big stories from Africa’s economic and political landscape that you (probably) didn’t miss but should keep in mind this week:

MultiChoice investors lose $1.7 billion

MultiChoice, a pay television company, has seen its stock price has fallen $1.7 billion in six months as it faces difficulties retaining its high-end clientele and finding new revenue streams. As of early March 2023, MultiChoice shares were worth more than $7.86 each. But on March 13, when it announced that its revenue growth in South Africa would be lower than expected, its shares fell to around $6.41 each. Its profit margin was also much lower due to its fixed costs and additional expenses from Showmax, its streaming service. It was the start of a six-month slump that wiped billions of dollars from its market value. One of the main problems with MultiChoice is that many South Africans are canceling their DStv subscriptions, especially in the Premium and Mid-market segments. This can be seen in the average amount paid by each DStv user, which increased from $14.38 to $13.69 in one year.

Nigeria’s naira falls to record low

The naira, the currency of Nigeria, hit a new low on the black market last week on Wednesday, as people bought more dollars to protect their wealth from inflation. The naira was selling for 980 naira to the dollar on abokiFx, a website that tracks unofficial exchange rates, up from 965 on Tuesday. In the official market, where the central bank lifted some restrictions on trading the naira in June, the currency was trading at 773.50 naira to the dollar at 1:49 p.m. GMT. The naira has fluctuated this month between 738 naira and 789 naira in the official market. The gap between official and black market rates has widened due to excessive demand for dollars in the informal market and speculation.

The collaboration between Safaricom and Apple

Kenyan telecommunications company Safaricom is functioning with Apple to connect M-PESA, its mobile money service, to PayPal, its online payment platform. This will allow M-PESA users to make and receive payments worldwide. Kenyan President William Ruto revealed this during a US-Africa business meeting. Safaricom and PayPal already have a partnership that allows customers to link their PayPal accounts to their M-PESA wallets. This way, they can purchase goods and services from sellers around the world. Additionally, M-PESA users can still obtain and withdraw cash from over 140,000 agents in Kenya. Currently, M-PESA has more than 51 million users in seven countries. It also has other international partnerships with AliExpress and Western Union that allow its users to send and receive money anywhere in the world.

ICYMI: market overview

  • The Nigerian stock market rose marginally over a 5-day trading week, with the NGX All Stock Index depreciating by 0.11% to close at 67,324.59 points. The biggest gainers were Sunu Assurances Nigeria Plc. (32.91%), Ellah Lakes plc. (28.79%), E-transact International Plc (28.57%), Chams Holding Company Plc (19.09%) and Abbey Mortgage Bank Plc (17.65%). The main decliners were Tantalizers plc (-21.05%), Guinea Insurance plc (-20.69%), Mcnichols plc (-13.33%), Unity Bank plc (-11.29%) and Secure Electronic Technology Plc (-10.34%).
  • The naira closed the week at ₦772.98/$1 on Friday window for investors and exporters.
  • Brent crude closed the week at $93.27 while the U.S. West Texas Intermediate (WTI) closed at $90.03.
  • THE global market capitalization of cryptocurrencies amounted to $1.05 trillion, Sunday, September 24 at 10 p.m. Bitcoin stood at $26,491.69, down 0.00%, signaling a change during the week. Ethereum also declined by 1.86% to trade at $1,589.74. However, Binance coin fell 3.09% during the week, to trade at $209.64.
  • Zambian neobank Lupiya successfully secured $8.25 million in Series A funding to expand its operations in its domestic and new markets.
  • Fixit45a pan-African automotive spare parts platform, has raised a $1.9 million pre-seed funding round to improve access to equal quality repairs and spare parts and open new markets .

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