Dakayi joins OmniRetail after shutting down BetaStore, a B2B e-commerce startup he founded in 2020. The former Betastore founder has worked in e-commerce for a decade and was commercial and fulfillment lead for Jumia. 

He will bring his experience to some of the key markets OmniRetail is expanding to.

“As a company and philosophy, once you have gotten your foot in properly, you start looking into expansions,” Amber Yadav, OmniRetail Head, Retail Division, said on a call with TechCabal. “We are looking at new geographies that make more sense in Francophone Africa like Cameroon, Senegal, Cote d Ivoire. That is the reason  for our expansion.”

OmniRetail’s expansion into Francophone Africa mirrors a similar move by B2B e-commerce competition,Wasoko. Francophone Africa has in recent times demonstrated the capacity for massive growth. This can be linked to  a stable currency pegged to the Euro, making it immune to FX instability like its West African counterparts. 

High economic growth is also another factor that makes the Francophone region favourable. According to the IMF, six out of the seven fastest-growing economies in sub-Saharan Africa are francophone countries

“Francophone Africa is very underestimated,” Dakayi said, stressing the region’s growth potential. “Some of the latest trends we have observed is significant growth in the middle class. This has led to increased purchasing power and new habits in terms of consumption. These are key growth drivers.”

Dakayi believes that OmniRetail’s FMCG focus would thrive in Francophone countries. “We are not looking at the competition. We just want a business driven by unit economics,” he said. To achieve this progress, OmniRetail will focus on building strong partnerships and staying asset-light to drive profitability in these regions. 

Dakayi will report to Deepankar Rustagi,  the CEO of OmniRetail, and head the Francophone expansion, which will begin with Ivory Coast.

Dakayi’s appointment comes as OmniRetail intensifies its focus on profitability after being named one of the fastest-growing companies of 2024. Dakayi said the company’s vision is to become the leading e-commerce platform in Africa.

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“Following the absorption by MTN Nigeria, Visafone is now fully liquidated,” a note in its H1 2024 financial statement said. “The liquidation process was completed during the period, and all remaining assets and liabilities of Visafone have been transferred.”  

When MTN Nigeria acquired Jim Ovia’s Visafone, its goal was to improve the quality of broadband internet. It had its eye on Visafone’s 800MHz spectrum licences, which would have helped MTN deliver 4G LTE Internet services to its subscribers.

MTN Nigeria did not immediately respond to a request for comments.

That spectrum licence made Visafone—with 2.2 million registered subscribers—strategically important. It would also prove to be a bone of contention for three years. With Nigeria’s Communications Commission (NCC) reluctant to approve the transfer of the spectrum licence, MTN initially considered pulling out of the acquisition. 

Competitors Airtel and 9mobile argued that if MTN Nigeria acquired the spectrum, its stake would increase from 38% to 50% of the entire spectrum available. For MTN, the acquisition was important to allow it to compete with Globacom which launched 4G LTE services in October 2016. 

It was not the first time MTN was acquiring a spectrum licence holder. In 2006, it bought VGC Communications Limited (VGCCL) for $70 million (N9.3 billion).

VGCCL was licensed by the Nigerian Communications Commission (NCC) to provide cabling and radio telephone services nationwide.

While Visafone did not disclose the terms of the acquisition in 2016, the filing shows MTN invested ₦43 billion. 

“The proposed business combination of both institutions will create one of Nigeria’s leading financial institutions,” Providus Bank told customers in an email seen by TechCabal.

Unity Bank, the product of a 2006 merger between nine banks, has struggled since 2007, racking up losses and bad loans. It will need a loan from the Central Bank to make this merger happen. A letter seen by TechCabal showed it asked for a ₦700 billion loan. 

Despite its massive debts and a history of distressed banks being complex businesses to buy, Providus is looking to expand its retail footprint, said one banker who asked not to be named. Unity Bank has 240 branches, ten times the number of Providus branches. 

“The business combination will ensure that Providus Bank has footprints in major cities around Nigeria,” Providus claimed. 

While many social media commentators have questioned the deal, one finance analyst speculated that the CBN may have been unwilling to allow a second bank failure following the revocation of Heritage Bank’s licence in June 2024. 

For Unity Bank, it marks another fortunate escape for an institution that has often seemed on the brink. It missed a 2010 deadline for recapitalisation after billions in losses driven by bad loans eroded shareholder capital. 

Despite eventually raising capital in 2011 and recovering around ₦53 billion in bad loans, Unity Bank was soon in the red again. By 2018, it had accumulated losses of ₦338 billion and by 2023, shareholder capital was again wiped out, prompting speculation that its licence would also be revoked. 

Its precarious cash position will make this seem like an acquisition, but in the end, Providus will get a partner with a retail footprint and will congratulate itself for not taking on Unity Bank’s liabilities in the short term. 

The renegotiation comes eleven months after MTN selected American Towers Corporation (ATC)  to take over its tower operations from IHS by 2025.

Under the new agreement, ATC will provide tower services for 2,100 sites, while IHS will manage 1,400 sites. The 1400 sites include new 1000 MTN sites to be rolled out over the next few years, allocated between the two tower operators. These new agreements are effective April 1, 2024, until December 31, 2032. Before the renegotiation, the site leases expired between December 2024 and December 2029.

The deal would benefit IHS Towers, which earns 63% of its tower revenue from Nigeria. By servicing Airtel and MTN Nigeria, the largest telcos in the West African nation, the tower could witness an improvement in revenues. In a separate filing on Wednesday, IHS Towers said the tower lease renegotiation is a testament to the deepened relationship between the two companies. 

The renegotiation, which includes new financial terms focusing on currency stability and diesel costs, aims to mitigate the impact of Nigeria’s economic challenges on both companies.

The new contracts include a dollar-denominated component linked to US inflation, a naira-denominated component tied to Nigerian inflation, and a diesel-linked component to hedge against rising fuel prices and currency fluctuations.

The agreement is expected to bolster IHS’s position in the Nigerian market, where it competes with ATC for tower management contracts. It also provides MTN with a more diversified tower infrastructure and potentially improved cost management.

While the CBN has not disclosed how much it provided in support, a source close to the situation told TechCabal that the amount was ₦700 billion.

According to a letter from Unity Bank’s managing director to the CBN seen by TechCabal, on July 22, the bank requested “merger approval and financial” support.

In that letter, it asked for a loan “priced at an interest rate of MPR minus 11%, subject to a minimum of 6%. Beginning in the sixth year, the new financial entity will recommence repayment in 15 equal installments until maturity.”

A spokesperson for Unity Bank declined to comment.

“The merger is contingent upon the financial support from the CBN,” said Hakama Sidi, the acting director corporate communications of the CBN. “

The fund will be instrumental in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders. It is unequivocal to state that the CBN’s action is in accordance with the provisions of Section 42 (2) of the CBN Act, 2007.”

Hakama emphasized that the arrangement was crucial for the financial health and operational stability of the post-merger organisation. Unlike its profitable peers in the financial industry like Guaranty Trust Holding Company (GTCO), and Stanbic IBTC, Unity Bank has consistently reported poor results, further exacerbated by  high foreign currency exposure.

CEO of Unity Bank Plc, Mrs. Tomi Somefun, blamed the bank’s poor financial position on the operating environment, which impacted the bank’s growth. “What we have is a market-driven impact which is adjustable envisaged from the positive economic outcomes of the government policies in the near term,” Somefun said in a statement the bank shared with TechCabal in September 2023.

Unity Bank has been in a worrisome situation since analysts from KPMG queried its full-year report ended December 31, 2022.

The lender’s  total liabilities exceeded its total assets by ₦274.9 billion in 2022, and KPMG wrote a note regarding this situation in its books, highlighting it as a “growing concern.”  Questions have been raised on the bank’s financial health even after it managed to  record ₦1.04 billion profit in the first quarter of 2023. In that same quarter, its total liabilities continued to surpass its total assets in Q1 2023. 

Till date, the bank is yet to release its 2023 full year reports for full transparency.

In September 2023, Somefun hinted at the bank plans to complete a recapitalization exercise long before CBN manadated banks to shore up their positions. The bank said it was focusing on retail growth before its merger. 

*This is a developing story

*This story has been edited to show that Unity bank requested a loan facility from the Central Bank

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Jumia, which has enjoyed a market rally that has seen its valuation hit over $1.3 billion over the last three weeks, narrowed total losses for the quarter to $19 million (compared to $38million in Q2 2023).

“Our performance this quarter reinforces our belief that our strategy is working,” said CEO Francis Dufay. “Our deep understanding of the African e-commerce market as well as our unique asset base and strategy position Jumia for growth as we progress on the path towards profitability.” 

Currency depreciation in key markets continued to be a persistent problem, with the value of total orders declining to $170 million despite the number of orders increasing to 4.8 million. The company hopes to  diversify its  product assortment to appeal to more customers while leveraging its JForce network.

Third-party commissions in corporate sales to local and regional retailers, distributors, and other corporate buyers, grew revenue.

Operating across 11 African countries, Jumia has been navigating a challenging economic landscape. While the company’s cost-reduction measures have yielded positive results, achieving sustained profitability will hinge on its ability to overcome macroeconomic hurdles.

Key takeaways:

• Jumia’s reported revenue of $36.5 million for the quarter
• It reduced operational losses to $20.2 million 
• Quarterly active users stay stable at 2 million 

“Based on the positive impact of its growth strategy, Jumia projects an increase in both orders and GMV in 2024, excluding the potential impact of foreign exchange,” the company said. 

The company claimed that its efforts to attract a stickier customer base via search engine optimization (SEO) and customer relationship management (CRM) has paid off. 

“These efforts delivered a 6% sequential increase in our active customer count and continued improvements in our 90-day repurchase rate.”

Regarding cash efficiency, Jumia has a cash balance of $45.1 million and a liquidity position of $92.8 million.  The company said 67% of its Liquidity Position was held in USD, helping to limit Jumia’s exposure to shifts in local currency valuations and refine its cash repatriation strategy.

Another positive aspect of its report is the growth in JumiaPay transactions which reached $1.9 million in the second quarter of 2024, up 30% year-over-year. The growth was driven by increased penetration of JumiaPay on delivery and the implementation of cashback campaigns and incentives conducted in the second quarter of 2024. 

The company implemented JumiaPay as the primary receiver of transactions on the company’s e-commerce platform. In addition, Jumia terminated its commercial agreement with Mastercard Asia/Pacific in June 2024. While JumiaPay will continue to accept Mastercard as a method of payment, the termination will allow Jumia to broaden and deepen its relationship with other payment services providers.

Over the past months, Jumia’s share price has grown 252%, in a rally that impressed Wall Street analysts and earned the company renewed shareholder confidence. The stock currently trades at $10.59 at the time of this report, down nearly 100% caused by the effect of global carry trades jolting markets around the world.

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