South Africa ends 100-year Eskom monopoly with new bill

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May 17, 2024
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5 min read
electricity

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Hola,

Victoria from Techpoint here,

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

  • South Africa ends 100-year Eskom monopoly
  • Flutterwave allegedly lost $7.2m to security breach
  • CBN gives green light to 14 new IMTOs

South Africa ends 100-year Eskom monopoly

electricity

The National Council of Provinces (NCOP) of Parliament passed the Electricity Regulation Amendment (ERA) Bill, effectively ending Eskom's century-long monopoly in South Africa.

So, what’s the deal? Establishing an open market for competitive electricity trading is the goal of the ERA Bill. Eskom will no longer be the only player in the game: they’ll have to share the stage with other electricity generators. 

The bill also introduces the Transmission Systems Operator (TSO), which will take over some key duties from Eskom’s System Operator. 

Eskom's System Operator used to call the shots on load-shedding (those dreaded power cuts), but now the TSO will take over. They’ll keep the grid stable and ensure fair play in the electricity market.

The bill also beefs up the role of the National Energy Regulator of South Africa (Nersa). Nersa will now license entities for the competitive market and oversee the transition, but they’ll step back from regulating prices directly. 

Instead, they’ll set and approve tariffs that allow providers to cover costs and make a fair profit. Then, energy providers can compete on pricing for end-users.

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This bill has been through the wringer, including public consultations, and now the National Assembly (NA) and the NCOP have given it the thumbs up.


Flutterwave allegedly lost $7.2m to security breach

Flutterwave

Have you heard the latest buzz about Flutterwave? It's not exactly good news. 

News flying around is that the fintech has hit a rough patch with yet another security breach. Word on the street is they've allegedly lost a whopping ₦11 billion  ($7.2 million) to some sneaky cyber crooks in April 2024!

According to TechCabal, these shady characters made off with the loot by transferring small chunks of cash that wouldn't set off any alarm bells. 

But Flutterwave's not waving the white flag just yet. They've come out swinging, insisting that despite the breach, customer funds are safe and sound. 

In a statement to Techpoint Africa, Flutterwave played it cool, saying these kinds of shenanigans are par for the course in the wild world of finance. They admitted to spotting some funny business on their platform but assured everyone that no data or cash got pinched. 

Well, it’s not Flutterwave's first rodeo with breaches. They've been down this road before, with three other incidents since March 2023. 

In one particularly juicy case, over ₦2.9 billion went walkabout from Flutterwave accounts, landing in over a hundred other accounts across various banks. The courts even got involved, freezing and unfreezing accounts, but it seems the saga is far from over.

However, it's not all doom and gloom. Flutterwave planned to claw back $24 million of the lost cash and reckon the whole payment industry needs to tighten its security game.


CBN gives green light to 14 new IMTOs

CBN building
The Central Bank of Nigeria, CBN. [PHOTO CREDIT: Ehud Kaduna]

The Central Bank of Nigeria (CBN) has given preliminary approval to 14 new International Money Transfer Operators (IMTOs) to help boost foreign-currency remittance inflows through official channels. 

This move comes after direct foreign exchange (FX) remittances dropped by 6.28% in the first quarter of 2024, falling to $282.61 million from $301.57 million in Q1 2023.

Moreover, in February 2024, the CBN hiked the IMTOs' licence application fee from ₦500,000 to ₦10 million. It also set a new minimum operating capital requirement of $1 million for foreign companies. 

In January 2023, the CBN updated the rules for IMTOs, limiting them to inbound transfers in naira and scrapping the exchange rate cap. 

But here's the kicker: almost half of all remittances to Nigeria are still going through informal channels because of the big difference between official and unofficial exchange rates. 

Consequently, CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, says the new move will “spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX),” making it easier to find a fair market value for the naira.

Meanwhile, CBN Governor Olayemi Cardoso is on a mission to clear any roadblocks that keep money from flowing through the official channels. More competition among IMTOs should lower remittance costs and boost financial inclusion. 

In other news, the government’s been cracking down on crypto to stabilise the naira. In February 2024, it blocked Binance and other crypto platforms to curb what they see as forex market manipulation and shady fund movements.


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Have a fun weekend!

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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