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Technology Startups to Enjoy Tax Holiday – FG

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Information Communications and Technology (ICT) industry across the country are to enjoy tax holidays and special intervention funds from the federal government.

This is to enable them to meaningfully help government to realize the creation of three million jobs targeted by 2018.

The Minister of Communications, Adebayo Shittu, and Afolabi Imoukhuede, Senior Special Adviser, SSA to the President on Job Creation/Youth Empowerment office of the Vice President, gave this hint when the Minister visited Yaba Technology Ecosystem Hubs in Lagos.

The minister expressed satisfaction at the infrastructures on the ground and said: “As you all know, the ICT innovations is powering economies across the globe, creating employments and wealth. It is impacting on the way we live and the way we do businesses; the Buhari administration is at the forefront of diversifying our economy and he is resolved to develop the ICT sector through Local Content initiative. Government will support Yaba and all ICT hubs across the country because it is a veritable platform to achieve our ICT and job creations objective.

“We are going to replicate what is happening here in Yaba in other parts of the country in partnership with stakeholders. We are going to start in Ibadan and Katsina state in the next three months. Both the governors of Oyo and Katsina have agreed to provide facilities for the establishment of these hubs.”

The minister further noted that countries like Singapore, India, have set up special interventions to support the high growth ICT industry; so, we will be supportive of whatever initiative that you have. Through National Technology Development Agency, NITDA, we are going to introduce ICT Innovation fund to cater for early startups and ICT incubation scheme to support establishment of more high growth incubators across the country. We believe with these incentives, the sector will witness tremendous growth and generate employment and massive wealth for our people. We are also going to monitor the hubs across Nigeria in order to ensure standards and to mold them for global competitiveness. Our aim is to make Nigeria the ICT hub for Africa.”

He charged entrepreneurs in the sector to articulate some of the challenges they are facing and the sorts of intervention they want from government to sustain the existing hubs and more importantly Government has always been the driving catalyst for funding startups. Imokhuede, added that government is really going to help entrepreneurs in the sector especially startups by giving them tax incentives, in the form of tax holidays.

“We are working on the details. We have a million jobs to be created this year and we have a target to create three million jobs over the next three years-2016-19. What is keen for me as the SSA on job creation is for us to be able to look at which sectors we can create jobs, and ICT, for us is a key area for job creations.

For two reasons- you can create jobs within the sector, and you can use ICT as an enabler to also create a lot of jobs. And that is why we are focusing on ICT and digital world for jobs creation; it is therefore important that we visit places like Co-Creation, where you have an organic growth.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

E-commerce

Jumia’s Gross Merchandise Value Drops 13 Percent in Q1 2021 Despite Lockdown

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Jumia, Africa’s leading online marketplace, recorded a 13 percent decline in Gross Merchandise Value (GMV) from €189.6 million in the first quarter (Q1) of 2020 to €165.0 million in the first quarter of 2021.

This was despite Amazon, Alibaba and other global e-commerce companies posting high GMV due to the surge in online orders because of ongoing movement restrictions in most nations.

Annual Active Consumers rose by 6.9 percent to 6.9 million in the quarter under review, up from 6.4 million in the same quarter of 2020, the leading e-commerce stated in its financial statements.

Orders grew by 3 percent year on year to 6.6 million from 6.4 million posted in the corresponding quarter of 2021.

Gross profit expanded by 10.9 percent from €18.4 million in Q1 2020 to €20.4 million in Q1 2021. While gross profit after fulfillment expense rose by 149.5 percent to €6.2 million, up from €2.5 million achieved in Q1 2021.

Sales and advertising expense moderated to €8.1 million in the quarter under review, representing a decline of 9.1 percent from €8.9 million posted in Q1 2020.

Technology and content expense stood at €6.9 million in Q1 2021, below €7.2 million in Q1 2020. G&A expense, excluding SBC improved from €24.4 million decline posted in Q1 2020 to €20.3 million decline in Q1 2021.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) also improved by 24.2 percent to a €27 million decline in Q1 2021 from €35.6 million.

Similarly, operating loss improved by 23 percent from €43.7 million posted in Q1 2020 to €33.7 million in Q1 2021.

Commenting on the company’s performance Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia, said “Our first quarter results reflect solid progress towards profitability. The drivers remain consistent: selective and disciplined usage growth, gradual monetization and continued cost discipline. The first quarter of 2021 was the sixth consecutive quarter of positive gross profit after fulfillment expense, which reached €6.2 million, more than doubling year-over-year, while Adjusted EBITDA loss contracted by 24% year-over-year, reaching €27.0 million”.

“Our strategy to increase our exposure to everyday product categories continues to yield positive results, enhancing the relevance of our marketplace for consumers. We are making further inroads in payment and fintech with 37% of Orders in the first quarter of 2021 completed using JumiaPay. Last but not least, we have raised over $570 million over the past six months, strengthening our balance sheet and increasing our strategic flexibility.

“We are confident we have all the right ingredients to continue to build a growing business across both our e-commerce and fintech activities.”

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Google Wins Cloud Deal From Elon Musk’s SpaceX for Starlink Internet Connectivity

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Google announced on Thursday its cloud unit has won a deal to supply computing and networking resources to SpaceX, Elon Musk’s privately held space-development company, to help deliver internet service through its Starlink satellites.

SpaceX will install ground stations at Google data centers that connect to SpaceX’s Starlink satellites, with an eye toward providing fast internet service to enterprises in the second half of this year.

The deal represents a victory for Google as it works to take share from Amazon and Microsoft in the fast-growing cloud computing market.

Investors are counting on Google’s nascent cloud business to boost growth in the event that its advertising business slows down. While Google’s cloud business delivered only 7 percent of parent company Alphabet’s total revenue in the first quarter, it grew almost 46 percent year over year, compared with growth of 32 percent for Google’s advertising services.

It’s also an unusual type of deal for Google — or any other cloud provider — as it relies heavily on Google’s internal network that connects data centers, rather than simply outsourcing functions like computing power or data storage to these data centers.

“This is one of a kind. I don’t believe something like this has been done before,” said Bikash Koley, Google’s head of global networking. “The real potential of this technology became very obvious. The power of combining cloud with universal secure connectivity, it’s a very powerful combination.”

“They chose us because of the quality of our network and the distribution and reach of our network,” said Thomas Kurian, CEO of Google’s cloud group.

In SpaceX’s case, there is no need for cell towers. Instead, customers’ devices will communicate to satellites, and then the satellites will link up to Google data centers. Inside those data centers, customers can run applications quickly using Google’s cloud services, or they can send the information on to other companies’ services that are geographically nearby, enabling low latency so there’s minimal lag. Data then comes right back through the Google data centers to satellites, and then down to end users.

The deal could last seven years, according to a person who declined to be named discussing confidential terms.

Starlink’s service might be valuable for consumers living in places with limited internet access, as well as businesses and government organizations running projects in remote areas, Kurian said. He anticipates that having Starlink draw on Google’s cloud network will lead organizations to deploy applications inside Google’s cloud to take advantage of high speeds.

Under the partnership, SpaceX will place its Starlink ground stations within Google data center properties, which can help the service support businesses requiring cloud-based applications.

Starlink is in the process of launching its satellite broadband internet service, which can reach customers without ground-based connections and is one of several space-based systems.

“Combining Starlink’s high-speed, low-latency broadband with Google’s infrastructure and capabilities provides global organizations with the secure and fast connection that modern organizations expect,” said SpaceX president and chief operating officer Gwynne Shotwell.

“We are proud to work with Google to deliver this access to businesses, public sector organizations, and many other groups operating around the world.”

Urs Hoelzle, senior vice president at Google Cloud, said the tie-up would help ensure “that organizations with distributed footprints have seamless, secure, and fast access to the critical applications and services they need to keep their teams up and running.”

This new capability for enterprise customers is expected to be available in the second half of 2021, the companies said in a joint statement.

SpaceX is seeking regulatory approval for broadband service for both consumers and businesses around the world from thousands of satellites.

Google is not the only cloud provider to be working with Starlink. In October, Microsoft said it was working with SpaceX to bring Starlink internet connectivity to modular Azure cloud data centers that customers can deploy anywhere. SpaceX would still rely on Google data centers in that scenario, a person familiar with the matter said. (Data would travel from the customer’s Azure modular data center through the Starlink satellite to Google’s data center and then out to other cloud services — and return in the opposite direction. Microsoft didn’t immediately respond to a request for comment.)

Initially, SpaceX will deploy the ground stations at Google data centers in the U.S., but the company wants to expand internationally, the person said.

SpaceX is one of the world’s most valuable privately held start-ups, having raised money at a $74 billion valuation in February, CNBC reported. Google invested $900 million in SpaceX in 2015. SpaceX has launched over 1,500 Starlink satellites into orbit, and last week the company said more than 500,000 people have ordered or made a deposit for the internet service.

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Chinese Smartphone Giant Xiaomi Shares Gains Over 6 Percent After U.S. Agrees to Remove it From Blacklist

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The U.S. has agreed to remove Xiaomi from a blacklist that would have barred Americans from investing in the Chinese smartphone maker.

Shares of Chinese tech giant Xiaomi rallied as much as 6.5 percent after the news, before paring some gains.

In January, the administration under former President Donald Trump designated Xiaomi as one of several “Communist Chinese military companies” or CCMC.

This meant the world’s third-largest smartphone maker was subject to a November executive order restricting American investors from buying shares or related securities of any companies given this designation by the U.S. Department of Defense (DOD).

Xiaomi brought a legal challenge against the U.S. Department of Defense.

In March, a U.S. court granted Xiaomi a preliminary injunction against the Trump-era order, saying the company would “suffer irreparable harm in the form of serious reputational and unrecoverable economic injuries.”

And on Tuesday, the DOD agreed that a “final order vacating” Xiaomi’s designation as a CCMC “would be appropriate,” according to a court filing.

Xiaomi and the DOD will “negotiate over the specific terms of the order” and provide the court with a “joint proposed order” on or before May 20.

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