In this letter, we explore:

• Jumia faces a tough third quarter
•  Nigeria’s telecom sector push towards tariff hike
• Ethiopia mandates standard QR code for digital payments

We also curated updates on startup funding in Africa, weekend reads, and several opportunities.

The big three! 

Jumia faces a tough third quarter

Jumia’s journey to profitability remains a tough one. Africa’s leading e-commerce platform posted a challenging Q3 in 2024, with declining revenue and continued losses despite efforts to tighten its operations and focus on core markets. Revenue dropped 13% year-over-year to $36.4 million while operating losses increased to $20.1 million.

The company is grappling with major obstacles, including economic headwinds like currency devaluations in key markets such as Nigeria and Egypt. Rising logistics and marketing costs are further straining profitability, and competition from both local retailers and other e-commerce players is heating up.

To navigate these hurdles, Jumia has introduced several strategic measures. It’s doubling down on core markets while exiting underperforming regions, reducing operational costs, and optimising its logistics. Jumia is also boosting its investment in technology and customer service to improve the shopping experience.

Meanwhile, JumiaPay, the company’s mobile payment service, is growing to support overall revenue, with transactions reaching $3 million in Q3 2024—up 10% from last year. Still, achieving profitability remains challenging given current economic uncertainties.

Context: Since 2022, CEO Francis Dufay has led Jumia through major cuts, including layoffs, pulling back in low-performing markets, and closing its food delivery service. These moves yielded fast results, slashing operating losses by 71% in Q1 2024 and dropping losses by 8% year-on-year by Q2. 

In October 2024, Jumia announced plans to exit South Africa and Tunisia, which together contributed just 2% of orders and 3% of GMV (gross merchandise value) through September. 

The company is now focusing on its remaining nine markets and may sell assets in the departing regions to boost cost efficiency in its path to profitability.

Nigeria’s telecom sector push towards tariff hike

Nigeria’s telecom sector is facing a perfect storm of challenges, pushing it to the brink. The industry is grappling with rising costs, currency devaluation, and increasing regulatory burdens. These factors have significantly impacted the profitability of major players like MTN Nigeria.

The soaring cost of diesel, a crucial fuel source for powering base stations, has significantly increased operational expenses. Additionally, the devaluation of the Naira has further eroded the financial health of telecom companies. The industry is also burdened by multiple taxes and fees imposed by the government.

The Solution? To alleviate these pressures, telecom operators are calling for a much-needed tariff hike. However, any such increase must be carefully balanced with the needs of consumers. The National Association of Telecommunications Subscribers (NATCOMS) has proposed a modest 10% increase, arguing that it is essential to ensure the sustainability of the sector.

Beyond financial challenges, the telecom sector is also grappling with infrastructure issues. Frequent fibre cuts, vandalism, and theft have disrupted services and increased costs.

The future of Nigeria’s telecom sector hangs in the balance. A timely and appropriate response to the industry’s challenges is essential to maintain connectivity, drive economic growth, and ensure the well-being of millions of Nigerians.

Ethiopia mandates standard QR code for digital payments

The National Bank of Ethiopia (NBE) has announced a unified QR code system for digital payments, set to launch on December 1, 2024. With this new standard, merchants can accept payments from any bank or provider with a single QR code, making transactions easier and encouraging digital payment adoption across Ethiopia.

This initiative is part of the country’s National Digital Payment Strategy, which aims to advance Ethiopia’s transition to a cashless economy. The interoperable QR code system is expected to boost financial inclusion, offering a streamlined, accessible digital payment solution for merchants and consumers alike.

Context: Ethiopia launched its national interoperable QR payment standard in April at the first Ethiopian Digital Payments Conference. Developed by EthSwitch and overseen by the National Bank of Ethiopia (NBE), this standardised QR format allows QR codes to work smoothly across any participating payment app.

While the NBE and EthSwitch are working to ensure a smooth rollout, there are challenges, including the need for stronger internet infrastructure, particularly in rural areas. The system’s success will depend on how well these challenges are addressed, but if successful, it could position Ethiopia as a leader in Africa’s digital payments landscape.

💰 State of Funding in Africa

Here’s a roundup of African startups that secured funding this week:

• Egyptian health and wellness startup WellPal has secured an undisclosed amount of angel funding from a strategic investor.
• Beacon Power Services, a Nigerian Energy startup, has raised an undisclosed amount in a Series A funding round led by Partech.

🍿 Weekend binge

• How BlackBerry Met Its Demise In 2019
• Kenyan TikTok star Arap Uria wants content creators to embrace their originality
• How the internet changed news
• The silent career killer

💼 Opportunities

We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.

Product & Design

• Roqqu — Motion Designer & Animator, Lagos
• Synshift Technologies — Product Manager, Remote

Data & Engineering

• Moniepoint — Mobile Engineer (Flutter), Remote
• Hostaway — Data Engineer, Remote

Admin & Growth

• Float — Customer Success Specialist, Remote
• Remedial Health — Growth Manager, Lagos
• VFD Microfinance — Team Lead, Marketing and Corporate Communications, Lagos