When Deepankar Rustagi founded Vconnect in 2010, it was one of Nigeria’s first marketplace products for hiring freelancers and artisans. Despite reaching over 400,000 businesses, an absence of integrated payments in a pre-Flutterwave world caused problems, and Vconnect closed its doors in 2017. 

In 2019, Rustagi took another stab at another marketplace, this time for fast-moving consumer goods. He set out to digitise Nigeria’s traditional supply chain with OmniRetail, a B2B e-commerce startup that connects retailers to manufacturers and distributors. 

OmniRetail is a function of Rustagi’s sales experience in Tolaram, the Indomie noodles maker, and a first-hand understanding of the bumpy road manufacturers must take to reach retailers. Technology is the asphalt that makes the road smoother, Rustagi believes. 

Building this road with technology in Africa’s large informal markets is challenging. Traditional wholesalers, who have deep networks of retailers, and buy enough volumes to receive discounts from manufacturers, are difficult to unseat. 

While one school of thought believes consolidation—such as Wasoko’s recent merger with MaxAB is the answer—Omniretail’s CEO believes in a hybrid approach. He believes the key to success is a mix of consolidation of strong players and technology companies onboarding traditional middlemen. 

OmniRetai’s pitch to retailers is that they will benefit from joining a “network of networks.” This network comprises three products: Mplify, a platform for distributors; Omnibiz, a platform for retailers; and Omnipay, a payment product.

In practice, it looks like a retailer ordering products on Omnibiz, a distributor nearby accepting that order on Mplify, and making payments through Omnipay.

OmniRetail has moved quickly since its launch, raising $3 million in 2021 and reporting revenues of ₦59.3 billion in 2022. By 2024, it topped the Financial Times list of Africa’s fastest-growing companies. 

Rustagi credits this rapid growth to the company’s deep market understanding. Before scaling its model, it used Surulere as a sandbox. 

“We did our small experiment in Surulere to get the right unit economics right, then we started multiplying into other areas, and now into other countries, and we saw the power of scale.” 

The company claims to serve 140,000 retailers, 4,500 distributors, and 135 manufacturers and has a monthly gross merchandise value (GMV) of $160 million.

OmniRetail makes money by getting a margin from a distributor to sell its products faster to retailers. It also makes money from the manufacturer by providing them insights on how their products move within the market. Information like this can improve efficiency by ensuring they produce just what the market needs at any given time.

The revenue lines indicate OmniRetail’s knowledge that merely replacing the distributor is a small-margin game.

“The value chain margin in commerce overall looks like 35%, and there are various layers, including distributor, wholesaler, and retailer. Transportation is happening at each stage, and working capital and loans are required at each stage. If you can play a role in these different layers of efficiency, you can get a large amount.” 

While Rustagi will not be drawn into sharing exact figures, he claims OmniRetail’s net profit margin has increased by 8%. ”Our gross margin has increased by 4%, and our losses have converted into profitability. Today, we are a net profitable company.”

It has found early success in food and beverages where “margins are thin, but profitability is sure.”

“If you look at how much money you spend in a month, a significant portion goes into buying bread, noodles, pasta, garri, and rice. If we can deliver low-margin categories, then tomorrow, when we onboard other categories, we can grow our margins.”

OmniRetail will also grow its business to Francophone Africa and has tapped Steve Dakayi, an ex-Jumia executive, to lead the expansion. In Nigeria, it will expand to 24 cities, almost double the ten it currently operates in.

“We are now considering scaling outside food and beverages into other essential goods. We are not doing electronics; it is still another aspect of retail,” he said. 

Rustagi also discussed the company’s use of Artificial Intelligence, which has captured the imagination of shareholders and business leaders. 

In 2020, Rustagi says OmniRetail built an AI model that gives retailers data on customers’ buying patterns. Retailers use those insights to stock in-demand brands and improve their turnover. 

With increased turnover will come a need for loans, which OmniRetail provides in partnership with the Bank of Industry. 

“You don’t just have to ensure logistics and fulfillment. You have to ensure payments and credit as well.” 

OmniPay is integrated with 14 financial institutions, including Paga, Stanbic IBTC, Access Bank, and Moniepoint. 

“Now, we do ₦20 billion in payments every month. And the way it is growing, I think very soon, we’ll be doing 10s of millions every day.” 

Listening to Rustagi, it’s difficult to believe this sector has generated multiple think pieces questioning its future. It doesn’t feel like irrational optimism; Rustagi genuinely believes OmniRetail has cracked the code. 

“We are a company that can grow 10x in three years.” 

By allowing anyone to scan a QR code, check out a list of meals, and pay through bank transfer, Apple Pay, or a card, it eliminated the need for repeated interactions with the restaurant’s wait staff.

Mira soon learned restaurants wanted something slightly different but familiar: a point-of-sale management system tied to hardware. It led to the launch of the Mira register. 

Priced at ₦360,000 ($226), Mira register has two displays, a receipt printer, a barcode scanner, Bluetooth and Wi-Fi. It tracks customer orders and internal business processes. The device comes with a Budpay or VFD embedded account to receive payments. Food delivery apps like Chowdeck and Glovo are also integrated with the hardware device for order fulfillment.  

Mira charges a monthly subscription fee ranging from $5 per restaurant location for its basic plan to $500 for larger restaurants in its enterprise plan. It charges $30 for its pro plan and a 1% transaction fee on payments made on Mira Register.

“We started with the simplest form (order management system) to get us into the hospitality space,” said Ted Oladele, Mira’s CEO.

Mira initially offered restaurants a plan to pay for the device in 12-month installments, but most restaurants preferred to pay full price upfront. These businesses already pay upfront for Orda, Louverse, Workman, and Omega POS, Mira’s competitors.  

While those competitor devices need internet access to run smoothly, Mira claims it uses a hybrid approach that allows restaurants to operate the product with minimal internet connection. 

“There is a reputation deficit for local players. We are trying to enter the market with a reputable product,” said Oladele.

Feranmi Adejumobi, co-founder at Ni Fries, claims Mira’s most valuable feature is its dashboard’s detailed inventory tracking data.

“The Mira dashboard allows us to track inventory levels and calculate the amount of food we can produce efficiently,” said Adejumobi. He claims the dashboard allows businesses to collect data points that can inform their pricing strategies and overall profitability. 

Despite its claim to a better product, Mira faces an uphill climb in overcoming the switching costs for businesses who may already use its competitors’ devices.

The startup serves a mix of SMEs—restaurants and retail stores—and counts Olaiya Foods, Grey Matter, The Vault, NiFries, OTP Kitchen, and Ashluxe as customers. Mira currently serves about 200 businesses across Nigeria. 

Since its launch, Mira has processed over $500,000 in transactions since launch, earning most of its revenue from businesses on its enterprise plan. 

“We are more expensive than the average local competitor. We don’t fight on pricing,” said Oladele.

The startup raised $200,000 in a family and friends round and is in the middle of a seed round.

While some customers who spoke to TechCabal experienced occasional glitches on the device, they are typical for startups in the early stages of development. Oladele claims the startup constantly seeks customers’ feedback and occasionally gets requests to build custom features. ‘

While Oladele agrees that building custom solutions for users on request might be a slow approach for a venture-backed startup, he thinks it is a necessary step to building a superior product. 

As Mira expands its service offering and looks for product differentiation, Oladele’s goal is to attract a 10% market share which will make the business profitable.

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Explain your job to a 5-year-old

Think of me like Santa Claus, but instead of delivering gifts from the North Pole, I deliver money. I help people who live far away from their family and friends send money to them every day.

You started as a customer success intern and rose to country manager for a Series A company and you’re now a director at an international company. What steps did you take to make this happen?

I became the go-to person for difficult tasks and delivered excellent results. I also love learning and implementing new ideas. Most importantly, I was resilient and focused on understanding how the business works and how all roles contribute to the big goal.

How have these skills translated to your current job?

Everything matters. From learning patience and empathy during my time at Piggyvest to understanding crisis management as a social media manager, engaging a community as a content marketer, and knowing how to view growth—all of it contributed. No knowledge was wasted.

What drew you to remittances?

My sister. I wanted to build something for her, to make it easy for her to hold currencies that mattered to her. At some point, my friends moved away, and now I guess I’m building for them too.

What’s the most challenging aspect of your job?

Ensuring everyone is happy. From satisfying customers with the rates, service, and product, to adapting to new environments rapidly, localising strategies, and balancing the need for rapid growth—it’s a lot to juggle. This requires a deep understanding of each market, strong collaboration with local teams, and the ability to make quick, informed decisions that drive growth without compromising on quality or customer satisfaction.

What advice would you give anyone trying to enter the fintech industry from a non-finance or engineering background?

You are only as good as your foundation, so make sure it’s solid and grounded. Leverage communities and networks—don’t be afraid to network and learn. Being taught by people who have gone through what you’re dealing with is the easiest way to gain valuable, rare insights.

What exciting things are you working on now?

Right now, I’m leading growth in Africa, for TransferGo which is incredibly exciting. We’re expanding into new markets, like East Africa, and working on localizing our services to fit the unique needs of these regions. As a director, I get to shape the entire strategy. I’m also exploring opportunities to build and lead local teams. It’s a dynamic role that allows me to make a significant impact on the future of TransferGo in Africa.

What do you do outside work?

Turns out I love to yap. I had a mentorship class I was running with the Empowerher community and I find it interesting doing speaking engagements. I am passionate about connecting with people and sharing my journey. I did a bit with communities like the Non-Tech in Tech Community and some universities.

In 2019, Botswana introduced SmartBots, free WiFi routers in public spaces. Five years on, the project has scored significant wins, with over 1.6 million users. Internet penetration has also increased from 42% in 2019 to 77% in 2024, with the accessibility provided by SmartBots for low-income groups being a significant contributor.

SmartBots routers—placed in public facilities including clinics, schools, and dikgotla (traditional courtyards)—have speeds of up to 10Mbps. Over 1,100 public facilities have been fitted with SmartBots routers. On average, more than 130,000 users access the internet via SmartBots daily, and the government plans to connect more than 500 villages soon.

Botswana’s small and widely dispersed 2.4 million population makes providing telecommunications infrastructure expensive for telcos, which pass on the cost to consumers.

*Kago and *Tumelo, two 15-year-old Form 2 students, use SmartBots to access learning resources—that’s what they tell their parents. They spend most of their time watching football highlights on YouTube and scrolling TikTok. Nevertheless, before SmartBots, the youngsters would not have access to the World Wide Web as they do now.

“We are here every evening because the internet is free, there is no password, and it’s close to where we stay, so we can leave late in the evening,” Tumelo tells TechCabal. 

“Our biggest mission is to connect all the settlements in the country and then move to the concentrated but isolated farming areas,” said Pontsho Pusoitsile, permanent secretary at the ministry of communications, knowledge and technology.

The user base for SmartBots has grown over the years and is widely diverse, ranging from students to senior citizens. For the youth, the use cases for SmartBots include accessing social media, applying for job opportunities, downloading music series and even trading forex, which has again popularity among Botswana’s young population amidst rising unemployment levels.

21-year-old *Daniel arrives at the Tshwaragano Clinic SmartBots hotspot at around 5:30 pm after he leaves work. He is there at least four days a week and can stay until night surfing the internet. He uses the internet for social media, updating his phone software and pursuing his side hustle, forex trading.

”The free internet is helpful because I’m learning forex and my friends say with enough wits, I can make easy money,” Daniel told TechCabal.

However, SmartBots is not without its problems. The service uses a household-grade router, so its speed depends on the number of people on the network. Most users target off-peak times, typically mornings and evenings when the most ardent users, students are either in school or at home.

55-year-old *Mooketsi usually arrives at the Monarch kgotla SmartBots hotspot at around 7 pm when the student traffic starts to disperse. He uses the WiFi at least 3 days a week to download revision material for his 11-year-old daughter who is preparing for her Primary School Leaving Examinations (PSLE). 

“I want her to pass and eventually go to the University, so this revision material I downloaded will help her a lot,” he told TechCabal.

While SmartBots’ password-free Wi-Fi is a convenience, cybersecurity experts warn of the potential risks of using the open network. The lack of password protection raises concerns about user vulnerability to cyberattacks.

“If a malicious party accesses the router, they can easily hack users as the service does not use a password or any form of verification,” said Larona Olebile, a cybersecurity professional.

Officials at the Ministry of Communications, knowledge, and Technology did not immediately respond to questions about SmartBots’ cybersecurity concerns on SmartBots. However, users do not seem concerned about the security risks. Everything else is secondary as long as they can freely access the internet.

“Le rona re bata tshwana le bana ba malwapa a mangwe,” said one user. Loosely translated, it means “We too want to be connected like the rest of the world.”

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The myth: Raising interest rates to fight inflation doesn’t work.

The facts: Raising interest rates is a monetary tool to manage inflation. Generally, the way it works is that the central bank raises the interest rates  for loans. Banks, in turn, raise the price you pay to borrow money from them. The theory is that when borrowing becomes more expensive, it discourages spending and reduces demand for goods and services. Prices will eventually fall. 

“If raising interest rates to moderate inflation really works, then why does Nigeria’s inflation rate keep accelerating?”

Raising interest rates isn’t a magic wand that makes inflation disappear overnight. When the Bank of England (BoE) started raising rates in December 2021, inflation was 5.4% and rose to 11.1% in October 2022 despite sustained hikes in interest rates. Between December 2021 and August 2023, the BoE raised interest rates fourteen consecutive times to a 16-year-high of 5.25%. It held rates until July 2024. The country’s inflation is now 2%.

On Thursday, August 1, BoE cut the rate to 5%—for the first time in four years. Yet Governor Andrew Bailey told BBC the mission wasn’t “accomplished yet.”

Fighting inflation is not a two-day task, and the rates will not always translate quickly. The current CBN leadership started its inflation fight in February 2024. There’s no fixed timeline for how long the transmission mechanism takes but Bank of Canada estimates between 12 and 18 months. The Bank of England says 12 months to two years. No surprises there, as it kept rates up for two years. CBN governor Olayemi Cardoso expects Nigeria’s inflation to moderate to 21.4% this year. 

Ultimately, one thing is clear: raising interest rates to lower inflation works.

On July 26, a statement from 9Mobile said the Nigerian Communications Commission (NCC) had approved the acquisition of a telecom operator by LH Telecommunications Limited, a little-known Nigerian company registered in April 2023 and led by Thomas Etuh, the founder of the Tak Group of Companies. 

While the NCC hasn’t publicly commented on the deal, an NCC official who asked not to be named said the commission was aware of the acquisition, which has been in the works since 2023.  

One person knowledgeable about the talks said the acquisition took a year because of corporate infighting after LH took control of 9Mobile in June 2023. The deal represents the latest attempt to restart growth at 9Mobile, the sickman of the telecom industry. 

Founded in 2009, 9Mobile started operations as a subsidiary of Emirati-state-owned telecom Etisalat. The company quickly racked up new subscribers as tens of millions of Nigerians bought their first mobile phones and SIM cards during the early 2010s. Government support to drive broadband adoption and a booming economy buoyed by a commodities boom put 9Mobile as a promising contender in Nigeria’s fast-growing mobile market.

But over the last decade, Nigeria has witnessed a reversal in economic fortunes, accelerating inflation and currency devaluation. 9Mobile was impacted due to its significant dollar debt exposure. In 2017, Etisalat divested from the business while a team from the Central Bank of Nigeria and NCC stepped in to find a new owner. 

A sale was concluded in 2018, and 9Mobile hired a new CEO, Adrian Woods.

Yet, 9Mobile’s struggles continued. While rival telcos have gained tens of millions of new subscribers, 9Mobile has lost 11.6 million over the decade. The business is struggling to grow, and its reputation among consumers for good quality of service is in tatters as network outages, even in urban locations, have become frequent.

LH’s acquisition offers a new lifeline to the struggling business. It hands control of 9Mobile, Nigeria’s fourth largest telecom company, to LH, which one publication first linked to LH Telecoms UK, a small UK business that reported 11,000 pounds cash on its balance sheet as of January 2023. 

LH Telecoms UK did not respond to emails requesting comments. 

9mobile’s new owners, LH Telecoms, did not immediately respond to a request for comments.

Following the deal, LH has assembled a competent board of executives, including two highly influential TY Danjuma family members. Between June and November 2023, when Thomas Etuh assumed the position of chairman, the company saw a consistent growth of over 400,000 in subscriber base due to funding released during the period, said one person familiar with the business. 

Yet, the acquisition is not without controversy. The takeover by LH Telecommunication was opposed by the former chairman Nasri Ade Bayero claiming the process of naming the new board breached corporate governance ethics, according to one publication and another person with knowledge of the matter. 

“The infighting cost 9Mobile a lot. It led to Thomas Etuh freezing funding within the company, which affected their subscriber numbers between December 2023 and January 2024,” the same person claimed. The person said the funding freeze was to force the regulator to approve a sale. 

The ascension of Etuh as 9Mobile’s new Chairman will draw questions due to his professional track record and reputation as one of the country’s top debtors. He has an outstanding debt balance of ₦11.58 billion owed by his company Tak Continental Limited, according to Asset Management Corporation of Nigeria (AMCON), the federal agency created after the 2008 financial crisis to handle debt restructuring of shaky businesses.

Etuh previously served as the chairman of the board of directors of Unity Bank Plc, Veritas Kapital Assurance Plc, and Lighthouse Capital Limited. He is also the Notore Chemicals Industries Plc board chairman and Jennifer Etuh Foundation (JEF). 

Notore Chemicals, a company listed on the Nigeria Exchange (NGX), recorded a 33% revenue loss year-on-year from ₦32.31 billion in 2022 to ₦21.55 billion in 2023 due to the naira devaluation. Veritas Kapital Assurance, also listed on the NGX, recorded a revenue increase of 41% from ₦5 million in 2022 to ₦7.1 million in 2023.   

After these Nigerian successes, it’s turning its attention outside Nigeria and aiming to become more pan-African. Since Kola Aina founded Ventures Platform in 2016, it has only invested in 12 non-Nigerian startups. 

“Even though we started from Nigeria and most of our investments are based in Nigeria, we always set out to be a pan-African investor,” said Dotun Olowoporoku, the managing partner of Ventures Platform.

The firm’s $46 million fund, which was launched in 2021, typically invests $250,000 to $1 million per startup. As it deepens its roots outside Nigeria, it will only invest in “key strategic markets” with a stable political environment, homegrown technology talent, and angel investors. Its most recent investments outside Nigeria have been in the Francophone West Africa region, which satisfies these benchmarks. 

“Startups only breed where the ecosystem has been put together,” said Olowoporoku. In 2023, the sector-agnostic fund invested in twelve startups, making it one of the most active investors on the continent in a year when funding declined 36% year-on-year. 

Besides its vast portfolio, Ventures Platform made its name by being a hands-on investor for its startups. In November 2022, the firm appointed Damilola Teidi to lead a team solely focused on supporting its portfolio companies. 

“As a founder whose aspiration is to build a business that generates a ton of free cash flow, there is no better fund. In my lowest moment as a founder, when we went down to zero revenue, Ventures Platform was there. When I needed to recruit talent, Kola Aina had time on his calendar to speak to an engineer,” Njavwa Mutambo, the CEO of Caantin, a non-Nigerian Ventures Platform portfolio startup, told TechCabal. 

Ventures Platform: Lake versus Ocean Strategy

VC investing is like fishing; you cast your net into a vast ocean and hope for the best. While that’s a simple analogy, VCs and fishermen head to sea every time to take their chances based on robust analysis and hope for outsized returns.

For Ventures Platform, fishing either happens in lakes or oceans. The Big 4 (Nigeria, Kenya, Egypt, and South Africa) are seen as oceans where multiple “sharks” can exist in the same market and still thrive, while smaller ecosystems are seen as lakes where there is mostly only one “shark.” 

Francophone West Africa ties into the firm’s lake strategy, as the firm sees the region as pockets of lakes. The firm will invest in startups in the region as long as they can “dominate the market quickly,” own up to 80% of the market share, and be able to expand into neighbouring countries.

“It’s easy for companies to start in Senegal, expand to Cote d’Ivoire and Cameroon, and become huge businesses without coming to Nigeria,” Olowoporoku said. 

However, acquiring a significant market share can be expensive and capital-intensive. In recent months, the African tech ecosystem has adopted a more conservative approach to spending after the end of the zero-interest rate policy, which reduced startup funding. 

But Olowoporoku told TechCabal that his firm would still back a startup in the region that is raising money to acquire customers and can retain them. The firm recently invested in Tanel, a health insurance company, and its fourth investment in Senegal. This has not previously been reported.

Ventures Platform is also looking to invest in Francophone West Africa, where startups have an easier path to exit due to French companies’ interest in entering the region through acquisitions, according to Olowoporoku. “We want to go to that market and look for companies that other people might have ignored because they look at that market from a narrow point of view,” he said.  

Ventures Platform’s GRMTT metrics

Venture capital firms often have a thesis for building their portfolios, and Ventures Platform is no different. The firm has five prerequisites for investing in a startup.

The firm considers a startup’s growth rate, which must be “incredible” before it cuts a cheque. “Venture investors invest in high-growth companies,” Olowoporoku said. 

Ventures Platform also considers the startup’s revenue margin before investing, which helps it determine valuation, and the diversity of the revenue source, which can help startups adapt to exchange rate volatility. “Revenue is important because it’s a reflection of whether they’re creating value and whether someone is willing to pay for that value,” Olowoporoku said. 

The firm also considers the current reality of the market and the potential of the market in which a startup operates before investing. “A fast-growing business in a capped market is less valuable than a slowly growing business in an uncapped market,” Olowoporoku said.

Editor’s Note: An earlier version of this article mentioned that Ventures Platform only invests in startups with revenue. This has been corrected to reflect that Ventures Platforms invests in pre-revenue startups.

“The banks do not give out more than ₦100,000 cash now if you have a savings account, so we meet supermarkets, wholesalers, and filling stations for cash. It is a mutual agreement; they need to lodge cash, and we need cash for our business, so I don’t charge them,” a POS agent in Ketu, Lagos, told TechCabal.

Banking agents began buying cash from these businesses in February 2023, when the Central Bank’s hasty currency change created a massive cash squeeze. They paid ₦5,000 for every ₦100,000 to fuel stations and other cash-heavy businesses and transferred the cost to customers who were paying between ₦500 and ₦700 for a ₦5,000 withdrawal.  

A court ruling in March 2023 compelled the CBN to modify timelines for the currency change, solving the cash crisis. While that stopped agents from buying cash, they still source money from these businesses in exchange for waiving deposits. 

It’s a win-win situation that works but creates an unintended consequence: a cash shortage at commercial banks. 

A central bank policy capping weekly over-the-counter withdrawals at ₦500,000 also contributes to the cash shortage. The regulator has tried to wean Nigerians off their cash dependence and has cut cash disbursements to bank branches. The resulting cash scarcity at the banks drives businesses to the agents, who rarely run out of cash.

Bank branches, which rely on cash deposits from the central bank and customers, have had to cap over-the-counter withdrawals as cash-heavy businesses take their deposits to agents instead of banking halls, further driving Nigerians to POS agents.

“Even though the central bank has a ₦500,000 limit, we cannot give out more than  ₦100,000 for each customer. Sometimes we open with only ₦600,000 or ₦1,000,000, and we have to make sure people get cash when they come to the banks, so we ration it,” a banker told TechCabal. They added that the central bank delivered cash to their Ojodu branch only twice the previous week.

With withdrawal limits at bank branches and ATMs, customers now visit bank branches for customer care issues, as foot traffic at branches has “dipped,” a banker at Wema Bank told TechCabal. 

“We have reduced the stress of going to the banks,” said Raheem. There are 120 POS terminals for every ATM in Nigeria, as there are less than 23,000 ATMs in the country and 2.7 million active POS terminals.

When he secures cash for his stalls, Raheem, like most agents, provides Cash-In Cash-Out services for many traders, charging ₦100 on withdrawals under ₦5,000 with fees of up to ₦5,000 depending on the transaction size. Agents say they include the cost of rent, local government taxes, data, transport and the risk of holding cash in those fees.

Daily profits vary and can be as low as ₦1,000. At least five agents in Mile 12 told TechCabal they earn enough to sustain their families daily. Some agents can make as much as ₦25,000 daily, more than a third of Nigeria’s newly approved monthly minimum wage. 

Nigeria has approximately 1.5 million banking agents; low entry barriers and subsidised POS terminals help drive agency banking’s popularity. Their ubiquity has also helped drive the growth of digital payments in Nigeria, as the value of cash transactions dropped by 36% from 2019 to 2023. 

When Nigeria’s Central Bank directed banks and other financial institutions on Friday to transfer ownership of dormant accounts and unclaimed balances, the immediate reaction from the public was distrust.

On social media, a few prominent handles advised their followers to go to their banks and collect all the money in their dormant accounts before the CBN accessed it. “They want to take all the money. Go and reactivate your accounts now,” one X user wrote.

The myth: The government desperately needs money to fund a massive deficit budget and wants the money in your dormant account. After all, it just slapped a windfall tax on banks’ FX gains. 

It’s a fabulous story, but it’s not true. 

The facts: The CBN’s recent directive is based on an October 2015 guideline “to curb abuses in the operation of dormant and inactive accounts and set operational standards.” 

A revised version of the guidelines released this week seeks to identify dormant accounts and unclaimed balances, hold the funds in the Unclaimed Balances Trust Fund (UBTF) Pool Account, and ultimately standardise the process. 

This policy does three critical things. First, the CBN safeguards the unclaimed funds in the dedicated pool account and maintains records of the beneficiaries. Banks are expected to publish dormant account lists six months before being transferred to the CBN. Second, the CBN can invest the funds in treasury bills and other securities to mop up liquidity. Third, it will reduce the fraud risks associated with dormant accounts.

Here’s how to think about it: the CBN manages everything around unclaimed balances, from maintaining records, investing the funds, and, most importantly, establishing standard procedures for reclaiming the funds. Of course, the CBN isn’t doing these out of the goodness of their heart. The goal is to put idle funds to work and channel the profits into strategic public investments like infrastructure and welfare projects. 

A transparent process for managing unclaimed funds is a win for banks and the CBN. While it will reduce the size of banks’ balance sheets, the CBN takes some burden off the banks. Customers also get refunded the principal and interest–if any–on the invested funds upon request. This is why the policy makes good sense for everyone.

Among the 242 ISPs left in Nigeria, only 106 are operational, according to NCC data for the first quarter. These 106 active ISPs serve a total of 262,206 subscribers, less than 3% of the total internet market. The largest ISP, Spectranet, has over 43% of the total industry subscribers with 113,869 subscribers.

TechCabal found that 22 ISPs have licences that will expire this year. A company like InterWeb Satcom Limited, founded by Nigerian senator Monday Okpebholo, is no longer active online; its licence will expire at the end of July

“The smallholders are all likely to just fizzle out one by one. The mid-sized may try merger if there is a regulatory environment change to offer protection from the MNO‘s onslaught on predatory pricing. This may encourage investors to promote mergers and infuse more capital. Else, they may soon start to die off the way of the smallholders,” Biodun Omoniyi, CEO of VDT Communications, told TechCabal.  

ISPs which act as bridges between homes, businesses, institutions, and the internet, provide the infrastructure necessary for users to access websites, communicate, and consume media and entertainment, are grappling with multiple challenges including energy costs which shot up more than 250% in the past year. The energy cost affected facilities and colocation costs which grew to 200%, according to Omoniyi. 

The capital expenditure (equipment spending) of local ISPs went up more than 200% in the past year due to foreign exchange increases. The companies are also battling with increased staff costs as a result of a growing wave of workers relocating abroad and creating gaps that take ISP companies a longer time and more money to fill, according to Temitope Osunrinde, a telecom expert and vice president at Tizeti, an internet provider. Other challenges include inflation and a declining market value due to increased competition. 

The ISP market is divided into three broad segments, including the mobile network operators (MNOs) and multinationals; the mid-tier broadband companies that offer fixed broadband comprising wireless and fibre optics operators; and the small-holder operators.

“ISPs need an ISP licence. If they have the equipment they are selling and installing, they also need a Sales and Installation licence,” an NCC spokesperson said. An ISP licence costs ₦500,000.

The four MNOs MTN Nigeria, Airtel, Globacom, and 9mobile lead the internet market in Nigeria. However, because of their UASL licence which allows them to operate voice and other services, the MNOs are often not described as ISPs because they are mobile-dependent. 

“ISP”, the term, is loosely used for mid-tier fixed broadband companies and smaller operators whose internet service licence only permits them to provide internet services. The companies include Spectranet, FiberOne, Tizeti, MainOne, iPNX, VDT Communications, Starlink, and many others. 

Internet Service Providers earn income from the purchase of large and redundant internet connections. They resell these as smaller connections to consumers and businesses. ISPs usually have a fixed price for providing a certain speed and bandwidth amount. They can also offer multiple pricing tiers depending on how fast a connection you want and how much bandwidth you want to use over a month. 

The problem with this revenue model is the competitive advantage it gives the MNOs who make money off the ISPs from the sale of redundant internet connections as well as the income they make from selling the internet directly to consumers.  

Competition from telcos and new players like Starlink and the West Indian Ocean Cable Company (WIOCC) appear to have sealed the fate of many local internet providers. 

“The entry of major players like Starlink, WIOCC, Glo, and MTN introduces intense competition. These companies have significant resources, broader networks, and the ability to offer competitive pricing due to economies of scale,” Manish Kochhar, former head of fibre networks at Globacom, told TechCabal. 

Starlink, which began operations in 2023 in Nigeria, did not waste time to become the fourth-largest operator in the ISP market before the end of that year. It climbed to third-largest ISP with 23,897 subscribers in May 2024. Starlink could claim more market share by collaborating with telcos, Kochhar said. 

MTN Nigeria and Globacom have also been involved in the ISP market with the deployment of Fibre To The Home (FTTN both serving 7,641 and 2681 subscribers respectively. 

Biodun Omoniyi recommends protection of the mid-tier and smaller operators from “predatory” pricing. 

“Strict nationalisation of service pricing to consumers is another dynamic cost-reflective pricing that allows operators to adjust in weeks and not years, which would also help,” Omoniyi said.