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Toshiba Corp. Forecast a Record $4.5 Billion Loss

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Toshiba Corp. forecast a record 550 billion yen ($4.5 billion) loss and will cut more jobs and restructure businesses that include chips, televisions, personal computers and home appliances following a long-running accounting scandal.

The projected net loss for this fiscal year includes 260 billion yen in taxes because of a reversal of deferred income-tax assets, it said in a statement Monday. The forecast doesn’t include possible impairment of goodwill and fixed assets at the company’s nuclear power systems business because Toshiba is still checking that, it said.

Toshiba, trying to recover from an accounting scandal in which it padded profits for almost seven years, is halting development and sales of TVs outside Japan, cutting costs at its PC and home appliances businesses and considering alliances with third parties.

President Masashi Muromachi told reporters Monday the group considers listing its chip business as one option, and may also sell a stake in its medical equipment unit. Toshiba has a 34 percent share of the global market for flash memory chips used in smartphones and mobile devices through its alliance with SanDisk Corp.

“Considering how bad things have gotten, this level of restructuring is the least they can do,” said Mitsushige Akino, Tokyo-based executive officer at Ichiyoshi Asset Management Co., which doesn’t hold Toshiba shares. “They need to do more, but it’s not as simple as cutting people and closing unprofitable businesses. The questions is what will the results be two years after the restructuring.”

Share Slump

Shares of the industrial conglomerate fell 9.8 percent, the most since May 11, to close at 254.8 yen in Tokyo trading before the announcement. The company has lost about $9 billion, half of its market value, over the past eight months since initially announcing an accounting probe.

The company will end consignment of design and manufacturing to outside vendors for its PC business, while concentrating on business-to-business sales and focusing the consumer portion of the segment to the Japan and U.S. markets. Product platforms will be reduced to less than one-third of the current number, the company said.

Hong Kong-listed Skyworth Digital agreed to buy Toshiba Consumer Products Indonesia for “adjusted consideration” of $30.1 million, the Chinese TV maker said in a statement Monday.

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Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Baidu and Alibaba Move to Fill OpenAI Void in China

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Baidu Inc. and Alibaba Group Holding Ltd. are stepping in to fill the void left by OpenAI’s abrupt withdrawal from the Chinese market.

This development comes as OpenAI, the creator of the widely-used AI tool ChatGPT, announced it will cut off access to its services in China, effective from July.

OpenAI’s decision to ban access has triggered a swift response from major Chinese AI companies, eager to capitalize on the opportunity to expand their influence in the burgeoning field.

In recent memos to Chinese users, OpenAI warned that it would halt access to its AI development software and tools, leading to a scramble among local companies to attract developers.

Baidu and Alibaba, along with other tech giants such as Tencent Holdings Ltd. and startups like Zhipu AI, have launched various initiatives to entice developers to transition to their platforms.

Baidu is offering free AI model fine-tuning and expert guidance on its flagship Ernie model, alongside 50 million free tokens for developers.

Alibaba and Tencent have also posted advertisements encouraging the shift, with Baichuan, backed by both Alibaba and Tencent, offering 10 million free tokens.

This move is seen as a chance for Chinese tech leaders to increase their market share and strengthen their positions in the AI sector.

“Leading Chinese large language models can benefit from the restricted access to OpenAI, and it will help to filter out smaller, less effective players from the market,” said You Chuanman, head of the Chinese University of Hong Kong-Shenzhen’s IIA Centre for Regulation and Global Governance.

However, the move also presents challenges, as it deprives smaller startups of some of the best tools available for AI development.

The impact of OpenAI’s exit extends beyond corporate maneuvering. It highlights the ongoing geopolitical tensions between China and the United States, particularly in the realm of advanced technologies.

The U.S. has been actively seeking to curb Beijing’s AI and semiconductor advancements, and OpenAI’s withdrawal is viewed as part of this broader strategy.

Chinese artificial intelligence-related stocks, including those of Alibaba and Iflytek Co., saw an uptick following the announcement.

This reflects investor confidence in the ability of local companies to seize the opportunity and drive innovation in the absence of OpenAI.

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Digital Payment Boom in Nigeria Driven by Sub-N10,000 Transactions

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Nigeria’s electronic payment landscape is undergoing a significant transformation, fueled by a surge in micro transactions, defined as transfers below N10,000.

This boom underscores the increasing adoption of digital channels in everyday life, according to a recent analysis by BusinessDay.

The prominence of these micro transactions gained momentum following the Central Bank of Nigeria (CBN)’s cashless policy initiative.

The policy, announced in October 2022 by then CBN Governor Godwin Emefiele, included a naira redesign to bolster monetary policy, promote digital alternatives like the eNaira, and enhance the currency’s integrity.

By January 2023, the scarcity of physical naira notes prompted many Nigerians to embrace digital payment channels.

Data from the Nigeria Inter-Bank Settlement System (NIBSS) revealed that cashless transactions rose by 45.41% year-on-year to N39.58 trillion in January 2023.

This upward trend continued throughout the first quarter of 2023, with cashless transactions increasing by 44.84% to N126.73 trillion compared to the same period in 2022.

By the end of 2023, total cashless transactions had surged to over N600 trillion from N395.38 trillion in 2022, as more Nigerians adopted digital payment methods.

The trend persisted into 2024, with transactions growing by 88.09% to N237 trillion in the first quarter.

However, this substantial increase in e-payment transactions has not translated into higher government revenue through the Electronic Money Transfer Levy (EMTL).

In the first quarter of 2024, the government collected N66.35 billion from EMTL, the same amount as in the corresponding period of 2023.

This stagnation is primarily because most transactions were less than N10,000 and thus not subject to the tax.

The EMTL, introduced in the Finance Act 2020 as an amendment to the Stamp Duty Act, is a single, one-off charge on electronic receipts or transfers of money deposited in any bank or financial institution on any account for sums of N10,000 and above.

Despite higher e-payment volumes, the government’s expected increase in revenue has not materialized due to the prevalence of micro transactions.

“Payment methods have become easier, faster, and better, and people are using them for everyday things,” said Adedeji Olowe, founder of Lendsqr. “Everyone from small kiosks to supermarkets now accepts transfers. If I go downstairs where I live, I can buy something worth N1,000 and pay with transfers.”

This shift signifies a maturing payment space where real-time transfers are becoming more acceptable in an economy striving to reduce reliance on physical cash.

Africa had the highest real-time share of electronic payments in 2023 at 40%, with Nigeria leading the region, according to ACI Worldwide.

Experts in the payment space note that most transactions in the country are below N10,000.

“The range below N6,000 makes up about 45% of transfer transactions. Some in the range of N10,000 is around 25%,” an industry source commented.

“The boom in micro transactions began when the cashless policy was implemented. People started moving away from cards and focusing more on transfers as a means of payment,” said Nosa Oyegun, VP of product and innovation at Kuda.

This shift has led to the rise of new fintech companies like PalmPay, Opay, and Moniepoint, with point-of-sale withdrawals increasingly conducted via transfers rather than cards.

The micro transaction growth is also enhancing financial inclusion by drawing more individuals into the digital financial system.

“It is good for them because there is now more access to financial services,” an industry source noted.

While it may not result in higher tax revenue for the government, experts argue that the boom in micro transactions supports the government’s digital inclusion and economic growth plans.

“It is fostering a national policy… I don’t think it is lost revenue for the government because it is like the gold. I don’t think you can tax it,” an industry expert said.

The growth of micro transactions also reflects the general economic downturn, with Nigerians grappling with double-digit inflation.

“People are struggling today due to economic downturn. Incomes have been strained and most people go for things that are affordable, which are usually cheaper than N10,000,” said Ike Ibeabuchi, a macro economy analyst.

The Federal Government has outlined plans to generate N483.73 billion from EMTL over three years in the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper.

However, the significant increase in micro transactions suggests a shift in Nigeria’s digital payment landscape, highlighting the role of small-scale transfers in driving the e-payment boom.

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Flutterwave Teams Up with EFCC to Launch Cybercrime Research Hub in Nigeria

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Flutterwave has partnered with the Economic and Financial Crimes Commission (EFCC) to establish a cutting-edge cybercrime research center in Nigeria.

This initiative comes in response to recent significant financial losses suffered by the payment technology company due to fraud.

Flutterwave, a leading payment technology company in Africa, has faced substantial financial setbacks due to cybercrime.

Recently, the company obtained a court order to recover $24 million lost to unauthorized Point of Sale (POS) transactions.

Also, Flutterwave reportedly lost N11 billion ($7 million) to fraudulent accounts in April 2024. These incidents have underscored the urgent need for enhanced cybersecurity measures.

The partnership was formalized through a memorandum of understanding (MoU) signed on June 14 in Abuja by Flutterwave’s CEO, Olugbenga Agboola, and EFCC Secretary, Mohammadu Hammajoda.

The signing ceremony also saw the presence of EFCC Chair, Ola Olukoyede, and Christopher Gray representing the FBI, among other notable figures.

Agboola emphasized Flutterwave’s expertise in combating internet fraud, particularly the tactics employed by notorious fraudsters known as Yahoo Boys.

He highlighted that the new cybercrime research center would equip anti-corruption agents with advanced technological tools and techniques to detect and prevent cybercrimes.

“The state-of-the-art center, to be built at the EFCC academy, will focus on seven key areas: advanced fraud detection and prevention, collaborative research and policy development, youth empowerment and capacity building, technological advancement, and resource enablement,” Agboola stated.

The establishment of the cybercrime research hub is a proactive step to address the rampant internet fraud that threatens the stability and trust in Nigeria’s financial systems.

The collaboration aims to enhance the capabilities of EFCC operatives in preventing, detecting, and prosecuting financial crimes.

Ola Olukoyede, the EFCC Chair, praised the initiative as a significant leap forward in the fight against financial crimes.

“The cybercrime research center will significantly enhance our capabilities to prevent, detect, and prosecute financial crimes,” Olukoyede remarked. “The EFCC is impressed with Flutterwave’s strides across Africa, and this partnership marks a crucial step towards ensuring a secure financial landscape for Nigerians.”

The partnership between Flutterwave and the EFCC signifies a robust commitment to cybersecurity, aiming to create a safer and more secure financial environment in Nigeria.

This initiative not only addresses immediate financial threats but also aims to build a resilient framework to combat future cybercrimes effectively.

With the launch of the cybercrime research hub, Flutterwave and the EFCC are set to lead the charge against financial fraud, ensuring that the Nigerian financial sector remains secure and trustworthy for all stakeholders.

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