₦82 billion is the magic number

A big welcome to the 164 subscribers who joined us this week; we’re now only a short hop from our target of 1000 subscribers in month one. Thanks to Abraham and Bamidele who wrote me emails to say they liked Sunday’s newsletter- keep ‘em coming.

Lagos is a city famous for extortion, thievery and general uselessness. So if you’re going to raise eyebrows for stealing, the bar is pretty high — this is a city of people that hardly blinked when the Speaker of the House of Assembly reportedly used N258 million from the public purse to print invitation cards. But N258 million is small coins, so you’re going to have to do better, Mr Speaker.

Brazen as Nigerian politicians are, they can claim to patch a few roads every election cycle. Not so for the National Union of Road Transport Workers (NURTW), which exists solely to fleece its members (kind of sounds like the Nigerian government abi?). NURTW enforcers a.k.a agberos are a fixture in Lagos; we see them every day as they seize the mirrors or keys of bus drivers who haven’t paid dues for the day.

Some of the dues include Booking fees, loading fees, dropping fees, money for weekend, Chairman’s meal, LASTMA’s money, police money, money for parking, money for the morning, money for afternoon, money for evening, money for the night…..

As you can see, the thing plenty small. Per this report, drivers pay N225 million each day, N6.75 billion each month, and N82.125 billion each year to agberos in Lagos. Thanks to how transparent the Lagos State government is, no one can tell how much of this money goes to the government.

Disrupting polls a.k.a the Lagos political machinery

Why is the government looking the other way? The political machinery in Lagos relies on scaring people away from polling centres on Election Day. They need some muscle for this, and this is where the NURTW’s members come in. So in exchange for political power, Lagos State lets the NURTW leaders keep billions of Naira every year. The money does not translate into better conditions for drivers, welfare efforts or even progressive legislation. As those pesky kids on Twitter say, it’s just vibes.

There’s no reason why the NURTW should not become an election issue. In Oyo State, NURTW is banned from bus parks, with the government appointing Park Managers who remit the funds they collect directly to the state government.

Read more: Money for the boys: How ‘agberos’ pocket billions of Lagos transport revenue

While we’re still on the subject of money, the Central Bank has now announced its plan to launch a digital currency by October 2021.

Is the eNaira worth any excitement?

The Central Bank’s announcement on Thursday that it will launch a digital currency called the eNaira in October 2021 generated very little excitement. It may have something to do with the fact that Bitcoin is now back to $30k levels. Even the most ardent crypto evangelists have piped down — no more talk about our portfolios buying us retirement houses by the end of 2021.

Is anyone still checking their Binance?

Everyone’s a genius in a bull market and other stories

Back to the eNaira: Central banks worldwide sound like this: physical currencies (Naira, Dollar, Yen) are backed by the governments that issue them so that creates some stability. Bitcoin, by contrast, doesn’t have a central issuer, so if it disappears today, whose shirt will you hold? 

It also thinks that if you like BTC, ETH and other volatile cryptos, you might as well like a Central backed digital currency, which is stable because it is backed by the Naira.

If that’s a little complex: BTC can go from $60k to $30k in one night because of one Elon Musk tweet, but the eNaira is safer because it is backed by the Naira.

In the end, Central banks like digital currencies because a) people are interested in crypto, and the government can tap into this excitement b) regulation for crypto continues to be tricky c) Central Banks just hope that crypto volatility will make digital currencies more attractive.

So is the eNaira worth any excitement? My early opinion: meh 

If you’d like a deeper breakdown of digital currencies, I recommend this article from the Financial Times.

But before you read that, let’s bring it home with mobile money.

The flaw in the financial inclusion plan

On Friday, I wrote about how CBN’s new mobile money regulations will not be the magic bullet that will convince poor people to use financial services. My reasons were simple, poor people with no income don’t have a banking problem; they have a money to put in said bank problem.

Yet, there’s another problem with the new regulations, according to the Association of Licensed Telecommunication Operators of Nigeria (ALTON). The problem is that the CBN says that banks should lead mobile banking efforts.

Their arguments make sense: Telcos have impressive network coverage while the biggest banks in Nigeria often have less than 1000 branches. So there’s no reason why telcos shouldn’t be leading this; they should also be allowed to provide full banking services - that means loans. 

So let’s end this with a quote from ALTON’s Chairman, “We are convinced that we are the industry with the ready infrastructure all over the country. If you talk about mobile penetration, use of mobile phones for financial service, the last mile is actually by the operators.

“The last mile to reach the people is by the operators. We are of the view that penetration would be slower than it should. We think the CBN should consider operators which are interested in offering these services.”

What else I’m reading:

Snapchat reported its results, and one interesting takeaway is that it has more daily active users than Twitter

I didn’t really read this, but the headline caught my attention: POS transactions in Nigeria hit over N3 trillion in H1 2021

This app wants to make Twitter giveaways interesting, and that’s just the hook

Our road to 1,000

I’m super serious about hitting the 1,000 subscriber mark in one month and now we’re - again, you and I - almost there. You can move me towards this goal by sharing this newsletter on Twitter, Facebook, WhatsApp and Telegram groups and your office’s Slack channel.

And if you’re one of those 2,000 people who keep reading without subscribing, beat your commitment-phobia by subscribing now.

What am I drinking this Friday?

Cold craft beer at Bature - this is not an ad - and probably some overpriced liquor at a too-loud club in Lagos right after. Don’t forget to leave a comment!