East Africa suffers from new subsea Internet cable cuts

May 14, 2024
7 min read
subsea cables

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Victoria from Techpoint here,

Here's what I've got for you today:

  • Bank of Tanzania cracks down on unlicensed digital lenders
  • A look at earned wage access in Nigeria
  • Kenya proposes a 1.5% digital tax on local platforms 
  • East Africa suffers from new subsea Internet cable cuts

Bank of Tanzania cracks down on unlicensed digital lenders

Bank of Tanzania
Image source: Business Insider

Tanzania's central bank, the  Bank of Tanzania, is cracking down on unlicensed digital lenders, putting the kibosh on their operations. They're telling folks to be smart and check for valid licences before borrowing money from loan companies.

Why the sudden change? Well, it appears that these digital lenders have been doing some questionable things, such as shaming people who can’t repay their loans and charging sky-high interest rates.

This new rule is going to hit hard. There are over 100 of these unregistered loan apps out there, serving about 30% of mobile phone users who don't have steady incomes or relationships with traditional banks.

Tanzania’s central bank is dropping the hammer, reminding everyone that it's illegal to lend money without the proper paperwork. And that includes these digital loan platforms.

But it's not all bad news. The licenced lenders will have to step up their game too. They'll need to start giving out proper loan agreements, spelling out all the terms and conditions, like fees, interest rates, and what happens if you're late with payments. Right now, it's all too easy to get a loan with just a tap on your phone.

So, if you're thinking of borrowing some cash, make sure you read the fine print and check that the lender has the stamp of approval from the Bank of Tanzania. 

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And it looks like Tanzania isn't the only one tightening the screws. Kenya's been cracking down on unlicensed digital lenders too, trimming their numbers down to just 50 authorised loan apps.

A look at earned wage access in Nigeria


So, remember last Friday when I was ranting about bills almost choking me? Well, now my salary's in the red and it's only the second week. How am I going to make it to another payday? Loans? Nah, not my thing. Maybe earned wage access? Perhaps, but let's chat about that instead.

So, earned wage access, also known as on-demand pay, is like a lifeline for employees who need some cash before payday. Let's say you work at a digital marketing agency and usually get your paycheck at the end of the month. With earned wage access, you can dip into your earnings mid-month, say on the 15th, and grab some cash to tide you over.

Now, unlike payday loans or advances, earned wage access doesn't get you money you haven't earned yet. It's more like a sneak peek at what's coming your way. Companies team up with employers or other providers to make this happen, so you can get your hard-earned cash right when you need it.

This concept isn't brand new, but it's starting to catch fire in Nigeria, especially after the chaos of the COVID-19 pandemic. Companies are realising it's a great way to keep their employees happy and sticking around. But that's not the only reason for its popularity.

A survey from December 2022 showed that a whopping 63% of Nigerians don't bring home enough bacon to cover all their needs, let alone support their families. And things have only gone downhill since then. Nigeria's inflation rate hit a crazy 33.3% in March 2024, up from 22.04% just a year before.

So, it's no wonder folks are clamouring for more flexible payment options. Want to learn more? Read Chimgozirim’s latest insights here.

Kenya proposes a 1.5% digital tax on local platforms

Source: kenyanews.go.ke

Kenya's national treasury is eyeing a new tax scheme. They want to slap a 1.5% digital tax on local platforms offering online services like jobs, rentals, food delivery, and ride-hailing. 

If Parliament gives the nod, foreign companies operating in Kenya will also have to fork out a Digital Service Tax.

But wait, there's more. Big digital players like Amazon, Alibaba, and Netflix, which don't have a physical presence in Kenya, might need to cough up 20% of their total income as the Economic Significant Presence Tax.

And that's not all. The government wants to up the ante on mobile airtime and data rates, jacking up the tax from 15% to 20%. Plus, they're eyeing a similar hike in the excise duty on mobile money transfers and bank transactions.

Telcos might hike their transfer and withdrawal fees to cope with the extra tax load, which could push folks back to using cash instead of digital transactions, despite forecasts of a booming digital banking market.

But hey, not everyone's feeling the pinch. Kenyans running online platforms for buying and selling stuff are off the hook from the digital tax, as they're already paying a hefty 30% corporate income tax.

This digital tax journey in Kenya started in 2021, covering things like e-books, music, and games. The Kenya Revenue Authority hoped to rake in about $106 million from it within three years.

Meanwhile, the tax talk isn't just happening in Kenya. Ghana and Nigeria are also shaking up their tax game in the digital sector, with plans to tax foreign incomes and reintroduce telecom taxes, respectively.

East Africa suffers from new subsea Internet cable cuts

subsea cables
Google's Submarine Cable ship

There's some trouble brewing in the digital seas between South Africa and Kenya. Two submarine Internet cables, Eassy and Seacom, stopped working since Sunday, leading to Internet service disruptions in East African countries like Kenya and Tanzania.

Reports say the outage caused Internet chaos in Kenya and Tanzania, with folks struggling to get online. 

Tanzania's Minister of Information, Communication, and Information Technology, Nape Nnauye, spilled the beans, saying telecom giants had flagged the issue, but fixing it would take some time. Translation: brace yourselves for slow Internet and wonky international calls.

Locals weren't happy campers either. People in Kenya and Tanzania were grumbling about their Internet being MIA, and some even went as far as calling it a blackout on social media. 

But wait, there's more drama. Tanzania and the French Island of Mayotte got hit hard by the outage, while Malawi and Mozambique got off relatively easy.

Over in Kenya, subscribers to big networks like Safaricom and Telkom were airing their grievances on social media. Safaricom tried to calm the storm, assuring customers they were on it and had backup plans to keep things running as smoothly as possible.

Luckily, South Africa dodged this digital bullet, mainly because they route most of their Internet traffic through other cables along Africa's west coast, like Equiano and Wacs.

But this outage isn't the first in recent memory. Just a few months ago, a slew of other undersea cables near the Ivory Coast were severed, causing similar chaos. 

And remember the Red Sea incident, where rebels cut three other cables connecting Africa and Southeast Asia to Europe. 

It's like the Internet's playing a game of dominoes, and Africa keeps getting hit. Here's hoping they can fix things soon and get everyone back online without any further surprises!

In case you missed it

What I'm watching


  • If you have a small business in Nigeria, Kenya, or South Africa, apply for the Google Hustle Academy here.
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  • Apply for Visa Everywhere Initiative (VEI) by May 6, 2024, here
  • Explore this website to find multiple job opportunities in Data that align with your preferences.
  • If you are a software engineer, creative designer, product manager, design researcher, or a techie looking for an internship role, please, check out this website.

Have a superb Tuesday!

Victoria Fakiya for Techpoint Africa.

She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.

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