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MOBILE MONEY 2.0

It’s been an eventful week for mobile money especially if you were a consumer in Zimbabwe, where the central bank shut down mobile money-to-cash transactions for three days before reversing the ban. Of course, there is the wider context of a beleaguered economy and a government under pressure, but it showed—not for the first time—the importance of mobile money in the running the economy of an African country.

For a long time Kenya’s M-Pesa has hogged the limelight and headlines when it comes to mobile money. That made sense given it served 22 million people last year and some 40% of GDP moves over its system. It did this even while acknowledging a few years back its technology was somewhat “clumsy” .

Mobile money has been so successfully integrated into the Kenyan economy it brings with it many of the advantages of financial inclusion but also some of its challenges. This week we wrote about how Kenyan regulators have tried to clamp down on big sports betting operators with a new tax. One of the concerns there is the rising number of young people with phones and mobile money being able to place bets easier than ever.

The more positive aspects of the mobile money ecosystem includes the rise of short term loans for everyday users. But even those facilities have been misused enough times to raise alarms about rising indebtedness. You could say, with great financial inclusion comes great responsibility.

Business development analyst Wiza Jalakasi is fascinated with the idea of how Mobile Money 1.0, which was tied to your phone, is going to evolve into an era he calls Mobile Money 2.0. In its first iteration, “mobile money has been a mobile network operator-led initiative—a service that comes built-in to your SIM card and available to activate at the very moment that you get your line from the operator.”

But moving forward things will evolve sharply from there—and it may be out of the control of mobile operators but instead led by startups and some nimble banks with apps the author calls “digibanks” operating on Android, iOS and increasingly on KaiOS. Smartphone penetration is growing in Africa with China’s Transsion at the fore but there will also be more affordable and more advanced feature phones which will also drive up mobile money use.

Mobile Money 2.0 will mean better user interfaces and more advanced applications, as you might expect, but it won’t be as straightforward as it sounds in theory. For one thing there’s more competition in this space from a wider variety of industry sectors. It’ll be fascinating to watch, our bet is the African consumer wins.

Read Wiza’s full essay here.

— Yinka AdegokeQuartz Africa editor

STORIES FROM THIS WEEK

Why these African countries are yet to sign onto China’s Belt and Road project. The trillion-dollar project aims to increase connectivity and trade among countries in Asia, Europe, and Africa. However, despite encouragement six years since its introduction, more than a dozen African countries have not signed up for various political and economic reasons.

Nigeria’s harassed tech industry is crowdfunding for a legal campaign against a rogue police unit. Nigeria’s tech industry is standing up to harassment against local police which often sees techies profiled as online fraudsters as part of a long-running extortion scam, explains Yomi Kazeem in Lagos. It’s the latest campaign against an anti-robbery police squad that has gained infamy for targeting innocent citizens instead of criminals.

Zimbabwe reversed its mobile money-cash ban but the problems remain. Zimbabwe’s central bank shut down mobile money to cash transactions in an attempt to slap down mobile money agents who were charging premiums for cash transactions. But after a couple of days it had to reverse the decision after much criticism in a vulnerable economy, reports Farai Shawn Matiashe from Harare.

Climate change and weak governance are fueling a crisis in West Africa’s Sahel. Across West Africa’s Sahel region, extreme temperatures, fluctuating rainfall, and droughts are having a negative impact on the lives of millions of people. Joe Penney looks into how unemployment, loss of state control, and growing militarization are exacerbating the challenges facing the region.

Thomas Cook’s collapse will devastate Gambia’s tourism economy. After a 178-year run, British travel agency Thomas Cook folded in September after a last-ditch bailout failed. Kwasi Gyamfi Asiedu details how the company’s collapse will impact tourism in the small Western African nation where it was responsible for bringing in 45% of all tourists.

Shutting down the internet doesn’t work—but governments keep doing it. Following repeated digital cut-offs in Ethiopia this year, prime minister Abiy Ahmed defended the move saying, “Internet is not water, internet is not air.” In light of growing connectivity blackouts across Africa, Abdi Latif Dahir explains why governments do it, if there are cases when their actions are justified, and whether these restrictive measures ultimately work.

CHART OF THE WEEK

Thinking and acting local took Africa’s top-selling phone maker to a multibillion-dollar IPO. Shares of the Shenzhen, China-based Transsion Holdings, Africa’s top-selling phone maker, closed up 64% on the first day of an initial public offering in Shanghai. Paul Adepoju writes from Ibadan, Nigeria on how Transsion, which has never sold a single phone in China, has won market share and user loyalty in Africa by focusing on Africans.

THE DEALMAKER

Amped Innovation, a US-based manufacturer of solar-power equipment and appliances, has raised $3.3 million in a Series A round led by ENGIE Rassembleurs d’Energies. Since being founded in 2015, the company has developed solar-power systems and supplied them across 23 countries in Africa and southeast Asia…The International Finance Corporation (IFC) is investing $1 million in Tunisia’s Anava Seed Fund—an early-stage fund and tech accelerator. A core part of the investment is targeted at supporting local female-led businesses…Dubai VC firm BECO Capital has raised a $100 million fund to invest in promising startups in North Africa and the Middle East. BECO has already shown a strong appetite for North Africa, backing some of the region’s most prominent startups including ride-hailing firm, Swvl and e-commerce marketplace, MaxAB

OTHER THINGS WE LIKED

The paradox of Rwanda’s parliamentary gender quotas. Rwanda could be seen as the most feminist country in the world because 60% of its parliamentarians are women. But as Jill Filipovic finds for Politico, the reality is not quite that straightforward. There are benefits from the important symbolism and women-led priorities in law-making, but there are still serious questions whether a female-led parliament in Rwanda has real power.

Uganda’s forests are disappearing. He’s fighting back. Illegal logging is a big business in northern Uganda, where clusters of trees dot the sunbaked grasslands harvesting rare hardwoods they export to China and Vietnam. For The Christian Science Monitor Liam Taylor visited Zoka forest in Uganda to meet an environmental activist who’s fighting to preserve the forest.

Trailing the Jollof Road. West Africa is home to a motley of cultures, languages and many different types of cuisine but most countries in the subregion have their own version of jollof rice. Over the course of two months, a team of writers from Zikoko, a youth-focused African blog, is on a journey of discovery through 14 countries telling stories along the way.

ICYMI

Peace and social change fellowship. African women grassroots activists working on issues of peace and security can apply to Columbia University’s Earth Institute to work and exchange ideas with women change-makers from across diverse contexts and geographies. (Oct. 23)

University of Edinburgh postgraduate scholarships. In partnership with the Mastercard Foundation, 200 African students can apply for full scholarships to study master’s programs in programs including health policy, human rights, and innovation. (Nov. 29)

Carnegie African diaspora fellowship. African scholars living in the United States or Canada and who are employed at an accredited college or university can apply to be hosted at higher education institutions in Ghana, Kenya, Nigeria, South Africa, Tanzania, and Uganda. (Dec. 9)

KEEP YOUR EYE ON

Tunisia elections (Oct. 6). With over 7 million registered voters, the North African nation will hold parliamentary elections on Oct. 6. The jailed media magnet Nabil Karoui will also face off with retired law professor Kais Saied in a presidential run-off scheduled for Oct. 13.

*This brief was produced while listening to Jarabi by Afrocubism (Mali/Cuba). [Spotify]

Our best wishes for a productive and ideas-filled week ahead. Please send any news, comments, suggestions, ideas, and more Transsion phones to africa@qz.com. You can follow us on Twitter at @qzafrica for updates throughout the day.

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