No. 265 – Nigeria’s Debt Situation Doesn’t Feel Good

Bond Investors Are Rushing to Nigeria – I wrote a bit about Federal Reserve chair Jerome Powell’s 60 Minutes interview earlier this week. Another thing he mentioned in that conversation was that at some point, the US was going to have to deal with the rate at which its debt is growing relative to its growth. You can look at the chart above and see that it’s not sustainable. 

Policymakers in Nigeria have been trying to have that conversation for years now, but it’s like the country is in a vicious cycle of finding itself in situations where it needs to seek out more debt to finance its deficit. One hopefully long-term positive that has come out of this pandemic is that the government ended its practice of paying an oil subsidy in order to keep gas affordable. Those subsidies have been so expensive for the government. Imagine in 2011, the government spent $8B. The government’s budget for that year was over $11B. The country has a $27B budget this year, and the subsidy elimination saves the country at least $2B. The problem is that the government anticipates running nearly a $14B deficit.

As the country hopefully emerges from this COVID-19 situation sooner than later, how do the country’s leaders position it to foster really strong growth in order to chip away at the debt the country has taken on?

The Amazon-Berkshire-JPMorgan Health Venture Fails to Disrupt – A month or so ago, I was wondering what happened to the joint venture between JP Morgan, Berkshire Hathaway, and Amazon during this COVID-19 situation. The venture was supposed to change the game for what employer healthcare programs looked like. Well, apparently things weren’t going well. The CEO Atul Gawande resigned his post to focus on the pandemic. While he was at the helm, the company took more incremental steps towards figuring out how to develop a truly innovative employer healthcare program. That’s unfortunate, especially considering the number of people losing their jobs. A reimagined healthcare offering would have been real nice.


‘This Isn’t a Fad’: Three of Africa’s Biggest Stars on Making the Industry Come to Them – This is a great interview with Tiwa Savage, Mr. Eazi, and Davido, Nigerian artists have played important roles in elevating the profile of the music African artists put out. Real nice interview.

No. 255 – Thursday Reads

Source: Niche and Realtor.com

Pittsburgh-Based Niche Secures $35M For School Search Platform After 100% ARR Growth In 2019 – niche is a platform that allows parents to search for schools ranging from kindergarten all the way up to college. what concerns me about this platform is just where we’re headed more broadly in education. A tool like this is more beneficial to the wealthy family that has options in terms of where they can send their children to school. I worry that platforms like this further inequities in education. Look at the map above from Niche’s site where they’ve graded the schools across DC. Guess where the majority of the multimillion dollar homes are?

Another thing that comes to mind is this pandemic has shed more light on our education system – areas where it’s weak, the ability of kids to study from home, the stress kids are under in school, and more. Over the next ten years, where does Niche see its growth coming from to justify a $35M raise? They’re a lot more bullish than I am.

‘Burn. It. The. F#&!. Down.’: The metamorphosis of former hedge fund manager and Epsilon Theory founder Ben Hunt – My buddy Myles Wynn introduced me to Ben Hunt a month or so ago when he wrote a provocative piece questioning the numbers China was reporting on deaths due to COVID-19. This piece does a nice job profiling him. He’s definitely somebody I’m going to be paying more attention to moving forward.

Why Hip-Hop and Gaming are Still Scratching the Surface – Per usual, Dan Runcie does a nice job teasing out opportunities for hip hop artists. In this piece he looks at gaming and how hip hop artists could find an additional revenue stream through partnerships with game development companies in order to put on concerts. He qualifies his analysis by saying that these platforms will need to effectively reach a broader demographic than they currently do in order for artists to maximize the opportunity. Unfortunately, the game development industry is quite monolithic—very white and male. Delane Parnell has built a nice platform on top of the gaming industry facilitating competition through PlayVS, but what black entrepreneurs out there are building new game development businesses?

Ghana’s economy resilient enough to fund healthcare infrastructure – Minister – Earlier this week, I shared my concern with how Ghana was paying for the 88 hotels it planned to start construction on this year. Sure enough, the country is betting on the Sinohydro deal in which China will construct infrastructure in the country in exchange for bauxite. I can’t say that I’m a fan.

Oil Slump, Coronavirus Create a Perfect Storm for Nigeria’s Economy – Back in 2014 or 2015, then Central Bank of Nigeria governor Sanido Lamido Sanusi caused a lot of commotion by claiming that Nigeria’s National Petroleum Corporation had $20B unaccounted for. He eventually lost his job. Around the same time, then finance minister Dr. Ngozi Okonjo-Iweala highlighted how Nigeria needed to meaningfully wean itself off of oil dependence and was ridiculed for her stance. It’s unfortunate to see the tough situation the country is in right now due to this mix of oil prices bottoming out because folks are not moving around. Hopefully, the country emerges from this with a focus on reinventing itself.

No. 248 – Wednesday Reads

Source: World Food Programme

WFP Chief warns of hunger pandemic as COVID-19 spreads – According to the head of the World Food Programme, well over 800 million people around the world are chronically hungry, dealing with starvation. He projects an additional 265 million people will face the same struggle by the end of the year. It’s hard to wrap my mind around that number. It shouldn’t be like this.

Once Bankrupt, a Tiny Broadband Company Thrives in the Trump Era – My first thought when I saw that Ligado Networks finally secured approval to build its wireless network was, “Got to play the long game.” For nearly a decade this company has been trying to build a wireless network. At first it was to be a 4G network. Now, it’s 5G and billed as a buttress against China’s advances in the space. The rapid reversal the FCC did to approve this doesn’t inspire confidence in our ability to go toe-to-toe with China in 5G development. They’ve got a strategy they’re executing on. Ours is coming together, I think.

‘I’m not Huawei’s spiritual leader. I’m a puppet leader,’ founder Ren Zhengfei says – Speaking of China, this is a peak into Huawei CEO Ren Zhengfei’s life. He’s been running that company since the year after I was born. To be in a battle with the United States at this point in his life must be exhausting.

Facebook Invests $5.7 billion in India’s Jio Platforms – Several years ago, Facebook launched its Internet.org initiatives to try and connect more of the world to the internet. Some of these efforts morphed into Free Basics, an effort to provide limited Facebook in developing countries. Both efforts got a lot of pushback from developing countries because it felt paternalistic and countries were concerned about Facebook determining the amount of access poor folks got to the internet. India went so far as to ban Free Basics. To see Facebook come back and put $5.7B into Jio, owned by the richest man in India, is something else. I think it says something about India knowing its worth. Similar to the Ligado story, it also says something about Facebook playing the long game to build the world it wants to see.

Nigerian media startup, Stears raises $600k seed to build Africa’s Bloomberg – Kudos to the Stears team on their raise. I’ve enjoyed reading their content over the past few years. More broadly, it’s nice to see more and more firms focused on leveraging data to move Africa forward. Off the top, firms like Fraym, Paga, Ajua, 54gene, and Cellulant come to mind. I’ve got a blindspot for who is doing similar work in southern Africa. Will work on that.

No. 234 – Wednesday Reads

Source: Fraym

Calibrating – “All great investments begin in discomfort.”

Issa Rae on the Return of “Insecure” and her Growing Empire – “That craving to tell the stories she’s not seeing anywhere is what’s getting her through this moment of uncertainty.”

A Game Plan to Help the Most Vulnerable – “We share the need to look out for one another. And when this global pandemic ends, our children and grandchildren will share the legacy we leave and the results of the choices we make today.”

The Far-Right Helped Create The World’s Most Powerful Facial Recognition Technology – “Thiel gave me all the money I need…[W]rote me a check on the spot.”

How data can help fight a health crisis like the coronavirus – “The right information in the hands of the right people can save lives in a time of crisis. It will be essential to ensure that such health surveillance measures will not prevail beyond the extreme circumstances we are facing today, so that people do not feel they are losing their privacy in a new world order.”

No. 197: Force Majeure in Nigerian Oil | Softbank Leveling Up | UIPath Deposits $568M

Nigeria’s Bonny Light, Amenam crude under force majeure as disruptions resume (S&P Global Platts)

If there is a global heat map showing the frequency of force majeure declarations in countries, I want to see it. It’s awful that Nigeria is still going through this waste of its lives and resources.

SoftBank Vision Fund says its team will balloon to a whopping 800 people in the next 24 months (TechCrunch)

Masayoshi Son is constantly applying pressure. For some reason, Eike Batista came to mind while reading this piece. Years ago, he was worth $30B. Within the span of a few years, his investments went left and he wasn’t a billionaire anymore. Last year, he was sentenced to 30 years in prison. I don’t see any connection between the two right now, but some folks have pointed out concerns about how Softbank’s various arms deal with each other.

A Closer Look at our Series D Funding Round—and Why It’s So Exciting (UIPath)

UIPath raising $568M is a good example of Peter Thiel’s zero to one concept – building something from nothing. This company was founded back in 2005. A couple years ago they had $8 million in annual recurring revenue. Now, they’ve got $200 million in ARR. I imagine Softbank has its eyes on them considering Masayoshi Son’s strong belief in benevolent artificial intelligence. So, we could be seeing a $1 billion+ Series E Round if they don’t go public after this round.

No. 191: AI Bias + Data | Y-Combinates US + Nigeria | Russia + Africa Nuclear

Notes on AI Bias

Machine learning is much better at doing certain things than people, just as a dog is much better at finding drugs than people, but you wouldn’t convict someone on a dog’s evidence. And dogs are much more intelligent than any machine learning.

The problem with this statement is that we have convicted people on a dog’s evidence and later found that evidence to be faulty.

Outside of this issue, Benedict Evans provides a simple definition of artificial intelligence bias, scenarios of the potential bad effects of AI bias, and how we can mitigate those effects. Evans’ central point is a good one to keep in mind:

ML finds patterns in data – what patterns depends on the data, and the data is up to us, and what we do with it is up to us.

Paystack x Lambda School Partnership

This is an interesting partnership probably arising from both startups being Y-Combinator alums. Paystack has gotten quite a lot of traction in Nigeria providing a payment platform similar to Stripe. Lambda provides software development training free of charge until folks get a job making at least $50k. After this, they’ll have to pay 17% of their salary for tuition over two years.

I’ve seen a lot of VCs pointing to Lambda as the chosen one to lead us into a new model for education based on this model. First – their not the only education business doing this, African Leadership University uses a similar model. Second, I worry that folks could still find themselves stuck with collectors hands in their pockets. I’d be curious to see what the income threshold will be for this Paystack partnership.

Ethiopia and Russia sign three-year nuclear power plan

Russia’s State Atomic Energy Corporation has been aggressive about pushing nuclear development across Africa. Over the past five years, the company has been at various stages of talks with South Africa, Kenya, Zambia, and Ethiopia. It’ll be at least a decade before we see how all this plays out but it’s quite interesting.

No. 190: Nigerian Investment | Twittanic | AI Workforce

Nigeria to Negotiate Future International Investment Agreements…. To Use New Model

This is a strong quote from Yewande Sadiku, head of Nigeria’s Investment Promotion Commission, at a recent event honoring the late Professor Michael Ayo Ajomo:

“it is true that Nigeria has challenges, but when we are going into a negotiation that is not the toga that we wear, the toga that we wear is the toga of a country that is the 26th largest economy in the world and is estimated by 2050 to be the 14th largest; the toga of a country that is the 7th most populous country in the world and is estimated that by 2050 would become the 3rd most populous country.”

I don’t know anything about Professor Ajomo and look forward to learning about him. As for the quote, direct investment in the country during the Buhari administration peaked at nearly $4.5B in 2017. It will be interesting to see how investment in the country shifts once the refinery Dangote Industries is developing comes online in 2020. Dangote expects the refinery to meet all local demand and position the country to export finished oil products. This could change things for how oil investors think about the competitive landscape in the country moving forward.

Jack Dorsey is Captain of the Twittanic at TED 2019

I have been a Twitter user since February 2009. The platform has played a key role in expanding my world view and connecting me to now friends and mentors. It’s played a key role globally shaping the relationship between citizens and their governments.

The platform has also been quite harmful. The levels to which folks face harassment on the platform is quite alarming. For those who have been on the receiving end of that harassment – terrifying, I have to believe.

I’ve watched and listened to numerous interviews Jack Dorsey has given over the past couple years and there seems to be this disconnect in how quickly he plans to address the issue. Apparently, this was the case during his TED interview yesterday. I look forward to watching the video once it comes out.

Andrew Ng on Building an AI Workforce

This is a good interview with Andrew Ng, one of the foremost experts on the development of artificial intelligence from an operator and academic perspective. He makes the case here for folks to layer their expertise in various disciplines with an understanding of AI considering the impacts the technology is having across industries.

Ng also makes the case for conditional basic income rather than universal basic income for fear that folks will get trapped in certain jobs, namely gig economy jobs. I share this concern.

The one thing that frustrates me in conversations with AI experts is their positioning of certain AI developments being so far down the road that we shouldn’t spend a lot of time worrying about them. I worry how that gives space for the development of bad habits in AI technology that lead us to points of regret along this path we’re on.

No. 167: 3AMReads: So. Tired. Need. Sleep.

Ecobank Research: Barclays brand’s exit from Africa could trigger loyalty separation

[Insert analysis]

TechCabal’s African Tech Roundup: Africa-Focused Insights From IoT World Forum 2017

[Insert analysis}

IMF: Tayo Oviosu: Technology Draws More Nigerians Into Banking Fold

[Insert analysis]

No. 164: 3AMReads: Kenya Finds Trump Connect | Trump’s OPIC Pick… | Nigerian Oil Company Wins Oil Block

Politico: SPG Signs Kenya

Trump-connected Stanton Park Group signed a $1.2M contract to represent the country’s interests in the US. I look forward to seeing what they accomplish.

White House: Seventeen Nominations Sent to the Senate Today

President Trump has nominated Texas real estate tycoon Ray Washburne to be President of the Overseas Private Investment Corporation. After digging into his background I’m curious to find out which emerging markets he has traveled to, if at all.

It is encouraging to know that he is influential in President Trump’s circle, considering that he was part of President Trump’s transition team. The signs have been pointing to OPIC shutting down, but perhaps he can be influential in making a case for the agency to remain operational.

Fortunately, the nominee for Executive Vice President of the Corporation is David Bohigian who has significant experience negotiating trade agreements for the US. While looking into him, I found this interesting Cordell Hull quote he shared during a 2005 testimony he gave while being vetted for a position at the Department of Commerce:

I have never faltered, and I will never falter, in my belief that enduring peace and the welfare of nations are indissolubly connected with friendships, fairness, equality and the maximum practicable degree of freedom in international trade.

Todd Moss and Jared Kalow at the Center for Global Development provide some helpful recommendations to the two nominees here.

Forbes: Nigerian Energy Group Taleveras And ExxonMobil Win Oil Blocks In Equatorial Guinea

This article caught my eye because I couldn’t recall hearing of many African-owned oil company winning oil blocks, so I checked with a friend who confirmed that only a few firms have won oil blocks like this. I look forward to seeing more of this. It would definitely help to have African-owned oil companies exploring these blocks to have more data to draw from for the R&D labs they will be investing. (Remember my saying I’m going to keep bringing up these R&D labs?)

No. 154: 3AMReads: Yaba Looks to Remain Lagos’ Startup Epicenter | $100M for Fiber Optic Company | Giant Nigerian Oil Trader Tells Origin Story

CcHub Pushes to Keep Yaba’s Startups Clustered Together
I struggled to parse out whether there’s really cause for concern for Yaba’s future as Lagos’ tech hub, or whether this piece was a veiled branding for CcHub. Perhaps, it was some of both. All the same, it’s cool to see CcHub making plans for the long-term in creating an environment for startups to thrive in a central location. 

I’m definitely on board with Bosun and other stakeholders trying to take advantage of economies of scale on pushing for broadband and better power supply. While Andela is a big fish in Lagos’ startup scene, I think their leaving the neighborhood is more something to pay attention to, while stakeholders continue thinking long term in creating the right environment to keep these type startups. Yaba isn’t fighting to maintain relevancy after two startups leave. 

Fiber-Optic Company Csquared Secures $100M Investment
Not that long ago, the big news for broadband across the continent were the undersea cables bringing broadband to Africa’s shores. The big question then was how to ensure the terrestrial reach of this newfound connectivity. 

A number of companies have been working on this, including global players like Google. Csquared, a spin-out of Google’s Project Link, landing this $100M is huge and I look forward to seeing more of this type deal activity. I’m sure iRoko CEO Jason Njoku would appreciate Csquared rolling out some fiber in Lagos to get his data costs down!

Commodities Trader Ighe Sanomi Tells Taleveras’ Origin Story
Oil traders in Nigeria make big bucks, and Ighe Sanomi is near the top of that list. This is an interesting piece that maps out Sanomi’s beginnings in the oil industry all the way to now where he is restructuring the companyafter a couple challenging years for his company.

For some time now, I’ve been thinking about how commodity dependent countries like Nigeria can diversify their economies while taking advantage of their core competencies. Oil is that for Nigeria and I think traders like Sanomi would do well to allocate some of their balance sheets to investing in R&D in various parts of the oil and gas value chain – new models for swaps contracts, oil exploration technologies, etc. 

I could just be naive since oil is definitely not my core competency, but I think there could be discoveries there that could lead to new revenue streams in the long term.