The founder of Konga, Sim Shagaya has reignited a 7-year old war with his reaction to the Jumia scandal of $17.5 million improper orders, inflated figures and U.S class action for false statement claimed to have been used to deceive investors.
Shagaya was the Chief Executive Officer of Konga before stepping down in 2016. His position is occupied by Shola Adekoya. Konga is the closest rival of Jumia in Africa. Both e-commerce companies started operation in Nigeria before branching out to other Neighbouring countries.
In a series of tweets on his social media handle, Twitter (@SimShagaya), Shagaya condemned the false statement Jumia was accused to have given their investors. According to Shagaya, such act has a detrimental ripple effect on other players and customers.
What Jumia did: Nairametrics had reported that Jumia is battling several issues like improper orders by some of its employees, several class-action lawsuits for misinforming investors, as well as the increasing losses which grew 59.2% in one year.
We made many operational mistakes in the companies I founded but one thing we never did was mislead investors. Never. @JasonNjoku was prescient several years ago (paraphrasing): the actions of players who do this not only hurt themselves & their investors but entire ecosystems
— Sim Shagaya (@SimShagaya) August 22, 2019
While admitting that he and his partners in Konga made mistakes during his time at the helm of affairs at Konga, he said they never deceived investors like Jumia is being accused of.
In his assertion, engaging in such activity hurts the whole e-commerce chain, “We made many operational mistakes in the companies I founded but one thing we never did was mislead investors. Never. @JasonNjoku (Founder of IrokoTV) was prescient several years ago (paraphrasing): the actions of players who do this not only hurt themselves & their investors but entire ecosystems.”
Jumia management knows: While he didn’t name Jumia, Shagaya said there was no way Jumia’s employees engaged in fraud of $17 million without support from the management of the company.
“For someone who has built a large-scale e-commerce business, I can confidently tell you that there is no way that a $10m+ fraud can happen without the complicity or, at the minimum, the tacit consent of management. It’s impossible.”
Jumia hurting Konga: Shagaya in his Twitter thread, said Konga is being hurt by the activities Jumia has been accused of and the figure inflation by Jumia workers.
He said investors are constantly comparing Konga’s growth with that of Jumia whenever they had a meeting and this usually pained him. According to Shagaya, Jumia’s ‘make-believe’ figures were often rubbed on his face, with investors asking why they struggle to meet Jumia’s growth numbers.
Why Shogaya is pissed: “What annoys me is that this action of my competitor directly hurt my business. At every meeting with my investors, I was constantly peppered with questions about the ability of my competitor to grow at what seemed at a faster rate than I. We know now that this growth was a lie.” Shagaya tweeted.
Adding that, “What annoys me is that this action of my competitor directly hurt my business. At every meeting with my investors, I was constantly peppered with questions about the ability of my competitor to grow at what seemed at a faster rate than I. We know now that this growth was a lie.” Shagaya tweeted.
He added that, “This is how ecosystems are hurt and credibility of entire environments damaged. They achieved what they wanted. But ultimately they were shortsighted. The market, consumers and investors, always win.”
Meanwhile, Jason Njoku reacted to Shagaya’s comment on Twitter with an article he wrote about Jumia last year, “Is Jumia using jazz?” In the article he wrote last year (2018) April, Njoku was stunned by Jumia’s figures and how they are able to attract so many funds from investors that make them superior to Konga despite both e-commerce companies launching the same year.
Just a year ago https://t.co/ENAfZXbSnz
— JasonNjoku (@JasonNjoku) August 22, 2019
Jumia vs Konga: Aside from the extra-curricular activities attached to Jumia, which led to Shagaya’s outburst, Jumia and Konga had also been at each other’s jugular for years.
In order to secure the e-commerce marketplace beyond Nigeria, Jumia’s parent company, Rocket Internet, bought and registered Konga-related domain names in ten countries.
This move by Jumia infuriated Konga, and the latter threatened to take Rocket Internet to court, stating that registering all Konga-related domain name will handicap the company, affecting its expansion plans when the decision to embark comes.
The domain names Jumia bought;
- Konga.cd for Cote D’Ivoire
- Konga.cm for Cameroun
- Konga.ly for Libya
- Konga.mu for Mauritius
- Konga.ma for Morocco
- Konga.mw for Malawi
- Konga.sc for Seychelles
- Konga.sh for Saint Helena
- Konga.co.ke for Kenya
- Konga.co.za for South Africa.
Shagaya in a letter in 2014, described the German’s decision as a “Destructive foreign competition in the internet industry.” According to Shagaya in the letter, Rocket Internet has been trying to take down other local startups that operate in the same market where its (Rocket Internet) subsidiaries are operating.
Rocket Internet owns Camido, Jovago (now JumiaTravels), Kaymu, Vamido, EasyTaxi and HelloFood.
Shagaya claimed Rocket Internet was gunning for the likes of Cheki, Private Property, BuyAm, Tranzit, and CityChops. He said in the letter, that this ‘destructive’ business model is intended to drown indigenous innovation.
Nigeria only hit 56% of its target revenue in first five of months of 2020
Nigeria’s earnings in the period were N1.48 trillion which is 56% off its main target.
Nigeria’s Minister of Finance, Zainab Ahmed revealed that Nigeria was only able to meet 56% of its target revenue from January to May as the global oil price crash affected government revenue due to the COVID-19 pandemic.
Nigeria’s earnings in the period were N1.48 trillion which is 56% off its main target, crude oil revenues accounted for half of Nigeria’s revenues, while non-oil revenues made up the rest in the first 5 months of the year.
On Friday, President Muhammadu Buhari signed the new 2020 revised budget of N10.8 trillion with the crude oil benchmark reduced from $57 per barrels in the earlier budget to $25 in the new budget.
The Minister said the budget had to be revised because of the effects of the COVID-19 pandemic on Nigeria’s economy. She added that Nigeria’s crude oil production would be an average of 1.86 million barrels per day next year and rise to 2.09 million the following year.
“Although Nigeria’s total production capacity is 2.5 million barrels per day, current crude production is about 1.4 million barrels per day — in compliance with the Organization of the Petroleum Exporting Countries’ production quota – and an additional 300,000 barrels per day of condensates, totaling about 1.7 million barrels per day,” she said.
African Union begins COVID-19 vaccine trial group
CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest.
The African Union Commission just recently facilitated a program called the new Africa Centres for Disease Control and Prevention (Africa CDC) Consortium for COVID-19 Vaccine Clinical Trial (CONCVACT).
The program is part of the Africa Joint Continental Strategy for stopping the deadly COVID-19 onslaught that has disrupted human activities. The goal is to prevent severe COVID-19 infections and deaths in African countries, reduce the economic damage caused by the pandemic, and help minimize the general disruption to everyday life.
Quick fact about COVID-19: Although for some individuals, the COVID-19 virus causes only mild illness, it can make other individuals seriously ill. The disease can be very fatal, especially among older individuals, and those with compromised immunities (such as diabetes, high blood pressure, or heart problems) appear to be more susceptible.
South Africa’s leader, Cyril Ramaphosa, said, “Success in developing and providing access to a safe vaccine requires an innovative and collaborative approach, with significant local manufacturing in Africa.
“We need to support the contribution of African scientists and healthcare professionals. We need to act with urgency.”
CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest, via collaborations with global vaccine developers, sponsors, and African businesses that enable clinical studies.
The African group also hopes to secure the safety and efficacy data of promising vaccine candidates for the African population in order to validate their launch after approval.
2021 Budget: FG projects spending plan of N11.86 trillion and deficit of N5.16 trillion
This tops 2020 budgeted expenditure of N10.8 trillion.
The Federal Government is projecting to spend N11.86 trillion for 2021. This was disclosed by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed at a virtual presentation of the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) held on Friday.
According to the finance minister, the government is planning to spend N11.86 trillion against revenue of N6.98 trillion meaning the government will have to grapple with a fiscal deficit of N5.16 trillion.
“The 2021-2023 MTEF&FSP is the pre-budget statement that provides the framework for the development of the 2021 budget. It is being framed against the backdrop of challenging global macroeconomic environment as well as domestic factors.
“We aim to keep the deficit within the three percent ceiling over the medium term and are therefore working on identifying new revenue sources and or cost of reduction.”
The minister noted that the 2021-2023 draft had been prepared against the backdrop of heightened global economic uncertainty.
Earlier today President Buhari signed the revised 2020 national budget of N10.8 trillion, which was passed by the National Assembly in June. The National Assembly passed a revised budget of N10.8 trillion on the 11th of June after the Federal Executive Council (FEC) approved a revised budget of N10.523trillion in May. 2020 Budget is based on a revised oil benchmark of $25 per barrel as against $57 while crude production was reduced from 2.18 million to 1.94 million barrels per day Budget deficit for 2020 is estimated at N5.365 trillion.
As of March 2020, the FG was running a 52% shortfall in the first quarter of the year with actual revenue collected of N950 trillion compared to budgeted revenue N1.96 trillion.
What this means: Nigeria is facing an unprecedented revenue crisis exacerbated by the Covid-19 pandemic and the crash in oil prices. At N5.16 trillion, Nigeria’s projected budget deficit will be 43% of spending and about 3.6% of GDP if the budget is passed. A budget deficit means the government will have to borrow heavily next year to fund its expenditure programs.
The government received a $3.4 billion funding from the IMF in April and expects another $3.5 billion from the World Bank in August 2020. The government also revealed it has no plans to access the commercial market for foreign debts as it takes advantage of lower interest rates in the domestic market.