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African capital markets are increasingly adopting disruption to make investing more transparent and accessible to a younger, tech-savvy generation, and see an increase in trading volumes.

Oscar Onyema was appointed the new CEO of the Nigerian Stock Exchange (NSE) in 2011, having previously been senior vice president of the American Stock Exchange. The exchange needed to change to increase transparency and make investing easier, and for this, Onyema turned to technology.

The NSE’s X-GEN trading platform was launched in 2013, offering better access to real-time data, thereby improving governance and transparency. Onyema described it as the fastest-trading platform in Africa.

Its impact was immediate. The average daily value of trade increased by around a third, to over $14 million in 2017. Other capital markets across the continent are following suit and adopting tech to make investing more transparent and accessible. The Nairobi Securities Exchange, for example, rolled out its Automated Trading System in 2014.

“Technology has enabled stock exchanges to enhance their surveillance capabilities contributing to transparency in the market,”

The Nairobi exchange followed this up with the launch of its own mobile app, which its head of brand and corporate affairs Waithera Mwai-Ireri says would “democratize” access to capital market-related information in Kenya. The app provides quick and easy information for potential investors and allows investments to be made in real-time.

Mwai-Ireri said the move was designed to make investing on capital markets accessible to a younger, tech-savvy generation.

READ MORE: Banking On Technology: New Mobile Bank Set To Launch

“The NSE app will enable investors to track market activity on a continuous basis enabling them to make real-time investment decisions. The app will spur interest in the capital market amongst the youth in the country, who make up over 75 percent of our total population,” she says.

The Nairobi exchange is a leader in Africa in terms of tech not only for its app, but its mobile-traded government M-Akiba bond. Mwai-Ireri said stock exchanges across the continent were seeing huge increases in trading volumes as a result of the use of technology.

“The use of technology has fast-tracked the development of Africa’s exchanges. Technology has enabled stock exchanges to enhance their surveillance capabilities contributing to transparency in the market,”

she says, adding she expected more exchanges across Africa to launch mobile-based applications in the coming years.

The younger, tech-savvy audience being targeted by exchanges such as those in Nigeria and Kenya may, however, have already found alternative ways of investing their money, away from traditional institutions such as exchanges and banks.

A platform tapping into a desire for alternative investments is South African company The Sun Exchange, which is also utilizing the increased uptake of cryptocurrencies. Using the platform, people use cryptocurrencies like bitcoin to buy solar panels, which The Sun Exchange then leases to businesses in Africa. Users earn income from these panels over a period of the next few years.

Founder and CEO Abraham Cambridge said improvements in efficient peer-to-peer payment systems and crowdsourcing has meant that entirely new investment models and platforms have become possible, solving problems that could previously not be solved. He said this trend will likely continue.

“Consumers are becoming increasingly skeptical of opaque and slow traditional banking. Modern day millennials will soon be the dominant investor group as they begin to inherit baby boomer wealth, and this group is used to instant gratification, transparency and a desire to change the way the world works,” Cambridge says.

“In addition, traditional financial institutions are becoming increasingly risk averse, which means that investments into startup businesses and innovative concepts, such as projects built around cryptocurrencies, find it extremely hard if not impossible to raise capital through these traditional means.”

He says the appeal of using cryptocurrencies for investments was that they are open and universal.

READ MORE: Are ICOs Relevant In Africa?

“This means that previously unbanked customers, of which there are hundreds of millions across the African continent, can now engage financially with the rest of the world. In the case of The Sun Exchange, this means we can transact with the whole world using a single currency,” he says.

Smaller, micro-investments are also possible.

“As cryptocurrency can be broken down into over eight decimal places, nano-transactions at lightning speeds can now happen. This means that an investor can choose to place very small sums into projects and earn nano-payments out, with ultimate security and transparency,” says Cambridge.

It is this kind of flexibility and transparency major capital exchanges across Africa are trying to match with their own use of tech. Time will tell if this will work or if the opportunity has passed them by.

– By Tom Jackson

Current Affairs

Morocco Looks To French As Language Of Economic Success

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Morocco’s economy is getting lost in translation.

With so many students dropping out of university because they don’t speak French, the government has proposed reintroducing it as the language for teaching science, maths and technical subjects such as computer science in high schools.

It also wants children to start learning French when they start school.

The country’s official languages are Arabic and Amazigh, or Berber. Most people speak Moroccan Arabic – a mixture of Arabic and Amazigh infused with French and Spanish influences.

In school, children are taught through Arabic although they don’t use it outside the classroom. When they get to university, lessons switch to French, the language of the urban elite and the country’s former colonial masters. Confused? Many are.

Two out of three people fail to complete their studies at public universities in Morocco, mainly because they don’t speak French.

The linguistic morass has stymied economic growth and exacerbated inequalities in the North African country, where one in four young people are unemployed and the average annual income runs at approximately $3,440 per person, according to the International Monetary Fund (IMF) – less than a third of the world average.

The plans to broaden the teaching of French go to the heart of Morocco’s national identity.

They would overturn decades of Arabisation after independence from France in 1956 and have triggered a furor in parliament, where members of the Islamist PJD party, the senior partner in the coalition government, and the conservative Istiqlal party view them as a betrayal.

The disagreement has delayed a vote on the changes.

“Openness to the world should not be used as an excuse to impose the primacy of French,” said Hassan Adili, a PJD lawmaker.

Proponents say the changes reflect the reality that French reigns supreme in business, government and higher education, giving those who can afford to be privately schooled through French a huge advantage over the majority of the country’s students.

“In the Moroccan job market, mastery of French is indispensable. Those who do not have command of French are considered illiterate,” said Hamid El Otmani, head of talent and training at the Confederation of Moroccan Employers.

Even before parliament votes on the changes, Education Minister Said Amzazi has okayed the roll-out of French in some schools, declaring its use in teaching scientific subjects as an “irreversible choice”.

Like many Moroccan politicians, his children received a private education.

“When decision-makers start sending their children to public schools, only then can we say that we have a successful education system,” said Jamal Karimi Benchekroun of the co-ruling socialist PPS party.

Amzazi did not respond to a request for comment.

Frustration over jobs and poverty has fueled periodic protests in Morocco, but the country has avoided the sort of instability suffered by other North African states, where pent-up anger has triggered uprisings and provided fertile ground for Islamist extremism.

King Mohammed VI, the ultimate power in Morocco, has proven adept at introducing limited reforms in response to popular protest. He has spoken publicly about the need to teach foreign languages to students to reduce unemployment and has made the economy a top priority.

Last year, he sacked the minister for finance after calling on the government to do more to boost investment.

C’EST LA VIE

Problems with language are not unique to Morocco. In neighboring Algeria, another former French colony, students are also schooled in Arabic only to be greeted “en francais” in university and the workplace.

French’s pre-eminence reflects Paris’ continuing influence in the region. France is the biggest foreign direct investor in Morocco and large companies such as carmakers Renault and Peugeot employ tens of thousands of people.

Privately-run universities such as the International University of Rabat (UIR) have courses geared toward high-growth industries such as aerospace and renewable energy and offer tuition in French and English.

But a year at UIR can cost up to $10,000 in fees, way beyond the budget of most Moroccans. They go instead to non-fee paying public universities, where the abrupt transition to studying in French is frequently a burden for students and their lecturers.

“Sometimes we find ourselves giving French language courses during economy classes,” said Amine Dafir, economy professor at Hassan II University, a public institution in Mohamedia, near Casablanca.

Hamid Farricha, 37, dropped out of his applied physics and computer science degree at Hassan II University during the first year. He dreamed of becoming an engineer but the language barrier meant he struggled to keep up.

Trying to find Arabic translations for French scientific words was a drain on his time.

He switched instead to studying mechanics at a vocational school. He still had to master French to get hired.

“The biggest challenge after earning my diploma was writing a CV and sitting for job interviews in French,” Farricha said.

He got a job as a technician at a plant repairing car frames, paid below Morocco’s minimum monthly salary of 2570 dirhams, or $270.

Farricha was one of the lucky ones. Morocco’s economy cannot absorb all the young people looking for work. Around 280,000 graduates entered the labor force last year but only 112,000 jobs were created.

The unemployment rate for graduates is 17 percent, above the national rate of 9.8 percent, according to data from Morocco’s planning agency.

Morocco’s reliance on small and medium-sized companies which do not typically employ graduates, and austerity drives which have cut public sector jobs are part of the reason for the high rate of graduate unemployment.

The education system is also failing to prepare students for work.

In addition to high dropout rates, Moroccan students score badly compared to peers on international tests, and at university level, students oversubscribe to social science fields at the expense of technical subjects, according to an IMF report in late 2017. That means many don’t have the skills employers are looking for when they graduate.

Even for roles not requiring a degree, French is a must. On the French website of Morocco’s job promotion agency, almost all employers were looking for French speakers, including for jobs as guards, waiters, cooks and drivers.

Determined to get ahead, Farricha worked on his French while employed at the plant. He read newspapers and books in his spare time and gave himself a daily list of new expressions and vocabulary to learn.

He went back to university in 2014 for a degree in French law and is studying for a masters in diplomacy and international arbitration.

To meet his living costs, he teaches French to other students. -Reuters

Ahmed Eljechtimi

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Focus

Software Pirates Use Apple Tech To Put Hacked Apps On iPhones

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Software pirates have hijacked technology designed by Apple Inc to distribute hacked versions of Spotify, Angry Birds, Pokemon Go, Minecraft and other popular apps on iPhones.

Illicit software distributors such as TutuApp, Panda Helper, AppValley and TweakBox have found ways to use digital certificates to get access to a program Apple introduced to let corporations distribute business apps to their employees without going through Apple’s tightly controlled App Store.

Using so-called enterprise developer certificates, these pirate operations are providing modified versions of popular apps to consumers, enabling them to stream music without ads and to circumvent fees and rules in games, depriving Apple and legitimate app makers of revenue.

By doing so, the pirate app distributors are violating the rules of Apple’s developer programs, which only allow apps to be distributed to the general public through the App Store. Downloading modified versions violates the terms of service of almost all major apps.

TutuApp, Panda Helper, AppValley and TweakBox did not respond to multiple requests for comment.

Apple has no way of tracking the real-time distribution of these certificates, or the spread of improperly modified apps on its phones, but it can cancel the certificates if it finds misuse.

“Developers that abuse our enterprise certificates are in violation of the Apple Developer Enterprise Program Agreement and will have their certificates terminated, and if appropriate, they will be removed from our Developer Program completely,” an Apple spokesperson told Reuters. “We are continuously evaluating the cases of misuse and are prepared to take immediate action.”

After Reuters initially contacted Apple for comment last week, some of the pirates were banned from the system, but within days they were using different certificates and were operational again.

“There’s nothing stopping these companies from doing this again from another team, another developer account,” said Amine Hambaba, head of security at software firm Shape Security.

Apple confirmed a media report on Wednesday that it would require two-factor authentication – using a code sent to a phone as well as a password – to log into all developer accounts by the end of this month, which could help prevent certificate misuse.

Major app makers Spotify Technology SA, Rovio Entertainment Oyj and Niantic Inc have begun to fight back.

Spotify declined to comment on the matter of modified apps, but the streaming music provider did say earlier this month that its new terms of service would crack down on users who are “creating or distributing tools designed to block advertisements” on its service.

Rovio, the maker of Angry Birds mobile games, said it actively works with partners to address infringement “for the benefit of both our player community and Rovio as a business.”

Niantic, which makes Pokemon Go, said players who use pirated apps that enable cheating on its game are regularly banned for violating its terms of service. Microsoft Corp, which owns the creative building game Minecraft, declined to comment.

SIPHONING OFF REVENUE

It is unclear how much revenue the pirate distributors are siphoning away from Apple and legitimate app makers.

TutuApp offers a free version of Minecraft, which costs $6.99 in Apple’s App Store. AppValley offers a version of Spotify’s free streaming music service with the advertisements stripped away.

The distributors make money by charging $13 or more per year for subscriptions to what they calls “VIP” versions of their services, which they say are more stable than the free versions. It is impossible to know how many users buy such subscriptions, but the pirate distributors combined have more than 600,000 followers on Twitter.

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Security researchers have long warned about the misuse of enterprise developer certificates, which act as digital keys that tell an iPhone a piece of software downloaded from the internet can be trusted and opened. They are the centerpiece of Apple’s program for corporate apps and enable consumers to install apps onto iPhones without Apple’s knowledge.

Apple last month briefly banned Facebook Inc and Alphabet Inc from using enterprise certificates after they used them to distribute data-gathering apps to consumers.

The distributors of pirated apps seen by Reuters are using certificates obtained in the name of legitimate businesses, although it is unclear how. Several pirates have impersonated a subsidiary of China Mobile Ltd. China Mobile did not respond to requests for comment.

Tech news website TechCrunch earlier this week reported that certificate abuse also enabled the distribution of apps for pornography and gambling, both of which are banned from the App Store.

Since the App Store debuted in 2008, Apple has sought to portray the iPhone as safer than rival Android devices because Apple reviews and approves all apps distributed to the devices.

Early on, hackers “jailbroke” iPhones by modifying their software to evade Apple’s controls, but that process voided the iPhone’s warranty and scared off many casual users. The misuse of the enterprise certificates seen by Reuters does not rely on jailbreaking and can be used on unmodified iPhones. -Reuters

-Stephen Nellis and Paresh Dave

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Economy

Fintech Companies Raised a Record $39.6 Billion in 2018: Research

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Venture capital-backed financial technology companies raised a record $39.57 billion from investors globally in 2018, up 120 percent from the previous year, according to research by data provider CB Insights published on Tuesday.

Funding was raised through 1,707 deals, up from 1,480 in 2017, the research said.

The surge in funding was due in large part to 52 mega-rounds, or investments larger than $100 million, which were worth $24.88 billion combined, the research said.

A $14 billion investment in Ant Financial, the payment affiliate of Chinese e-commerce giant Alibaba Group Holding Ltd, accounted for 35 percent of total fintech funding alone last year, the research said.

In the last three months of the year, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These include credit card provider Brex, digital bank Monzo and data aggregator Plaid.

Venture capital investors have been pouring billions of dollars into fintech companies, in the hopes that they can gain market share from incumbent financial institutions by offering easier to use and cheaper digital financial services.

Fintechs have emerged globally across all sectors of finance, including lending, banking and wealth management.

While the large rounds minted new unicorns and led funding to hit a record high in 2018, CB Insights estimates these will likely delay initial public offerings.

“IPO activity is likely to remain lackluster in 2019,” the research reads.

Asia saw the biggest jump in number of deals in 2018, growing 38 percent from the previous year and accounting for a record $22.65 billion, according to the study.

In the United States, fintechs raised a record $11.89 billion through 659 investments, while the number of deals dropped in Europe, but funding reached a record $3.53 billion. -Reuters

-Anna Irrera

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