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Jumia defends sales figures following controversial Citron report

Citron Research’s report alleges that the company is fraudulent, claiming that its equity is “worthless”

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Jumia is trying to encourage more prepayment to discourage returns or cancellations, the head of its Nigerian business says, following a report by Citron Research, which questioned some of Jumia’s sales figures, last week.

First quarterly earnings call after the initial public offering has provided a chance for Jumia executives to push back against the claims.

Jumia became the first African tech stock to list on Wall Street on April 12 with initial soaring shares which fell sharply on Friday after the publication of the report by Citron Research, run by short-seller, Andrew Left. 

Sacha Poignonnec, Jumia CEO, says the company is transparent and declined direct response to the report’s claims, saying “We don’t necessarily want to feed those types of organisations or people”.

Citron Research’s report alleges that the company is fraudulent, claiming that its equity is “worthless”. The report was particularly centred on “material discrepancies” in Jumia’s S1 filing with the United States Securities and Exchange Commission (SEC) in March and a confidential investor presentation Jumia had made six months earlier.

News of the report further triggered a decline in stock price last week in comparison to an impressive run after the IPO’s initial launch.

“We stand by what we disclosed… the way GMV (gross merchandise value) is calculated in the industry is gross of cancellations and returns,” Juliet Anammah, chief executive of Jumia Nigeria, says

According to Anammah, many customers in Nigeria, Jumia’s biggest market, still only pay by cash when they receive their orders, but Jumia is trying to move customers to its Jumia Pay solution to pay in advance when they check out online. 

It plans to make its marketing spending more efficient, charge merchants for storing their goods in its warehouses, boost sales of advertising on is site and charge sellers to create content, such as images of their products, she said. 

“We are going to monetize value-added services such as Jumia Express and add on more advertising”, she said. 

Investors seem to be satisfied with Jumia’s response as the shares have rebounded over the last day. The stock closed up 8% at the end of business on Monday (May 13) and was set to continue an upward trajectory on Tuesday.

As the company looks to regain investor appetite however, Jumia will hope other numbers in its earnings results inspires some confidence. The company touted strong year on year growth in gross merchandise volume (GMV) growth 58% to £240 million ($270 million)

* GMV is a non-standard accounting metric Jumia uses to show the “total value of orders including shipping fees, value added tax and before discount deductions, irrespective of cancellations or returns.

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Angola awards fuel tender to Total, Trafigura

Angola was hit hard by the 2014 oil price crash, which pushed its economy into recession

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Angola awards fuel tender to Total, Trafigura

Sonangol, Angola’s state-run oil firm says it had awarded contracts for its refined products for the next 12 months to Total and Trafigura. In the arrangement, Total will supply Angola with petrol or gasoline while Trafigura will supply diesel and marine diesel.

This came due to the longest run of fuel shortages that hit Angola in years, which led to the sacking of Sonangol chair, Carlos Saturnino earlier this month.

According to Sonagol, the shortage was blamed on difficulties accessing hard currency as well as unpaid debts owed to the energy company by industrial clients.

Heavily reliant on oil sales for government income, Angola was hit hard by the 2014 oil price crash, which pushed its economy into recession and created foreign currency shortages that crippled business.

In the statement on Tuesday, Sonangol reported that it had issued the tender in February with nine companies bidding for the supply contracts.

The tender result marks a return to Angola for Trafigura, which for many years, enjoyed an effective monopoly on lucrative fuel supply deals with OPEC member Angola.

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Nigeria’s central bank holds benchmark interest rate

This reduction is the first since November 2015.

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Nigeria's central bank holds benchmark interest rate
A photo of the Nigerian Central Bank in Abuja, Nigeria. (Photo by Pius Utomi EKPEI / AFP)

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has maintained the interest rate at 13.5 per cent. From the last Monetary Policy Committee(MPC) meeting in March, a 0.5 per cent cut was made in the interest rate.

The decision comes a day after Nigeria’s bureau of statistics reported that economic growth had slowed in the first quarter of 2019, dropping to 2.01% from 2.38% in the previous quarter as the country’s dominant oil sector shrank.

This reduction is the first since November 2015. The rate had been held at 14% since July 2016 to support the naira and curb inflation.

Earlier this month, Emefiele, became the first Nigerian Central Bank governor since the return to democracy in 1999 to be given a second term. The CBN had predicted that growth this year would come in at 2.38 per cent.

Nigeria emerged from its first recession in 25 years in 2017. Higher oil prices and recent debt sales have helped it accrue billions of dollars in foreign reserves, but growth remains fragile with inflation edging up in April to 11.37% from 11.25% a month earlier.

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MTN pays off bulk of $1.5 billion Nigeria fine

MTN, which began operation in Nigeria in 2001, is the country’s largest operator with 53 million subscribers.

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MTN pays off bulk of $1.5 billion Nigeria fine

South African telecoms giant MTN has paid more than three-quarters of a record $1.5 billion dollar fine levelled by Nigeria for failing to disconnect unregistered subscribers, the government said late Tuesday.

Africa’s biggest wireless operator was initially fined $3.9 billion in October 2015, after failing to disconnect 5.1 million subscribers -amid concerns the lines were being used by Boko Haram insurgents.

After series of negotiations, the fine was reduced to $1.5 billion, or 330 billion naira.

“MTN has so far paid 275 billion naira to the federal government,” the Nigerian Communications Commission (NCC) said in a statement.

With more than 80 per cent paid, the agency said MTN has until the end of May to pay the rest.

MTN, which began operation in Nigeria in 2001, is the country’s largest operator with 53 million subscribers.

It generates almost half of its revenue in the oil-rich west African nation, and last week floated on the Nigerian Stock Exchange (NSE).

The $6 billion flotations on the Nigerian bourse was part of the agreement to resolve its disputes with the Nigerian authorities over some infractions. 

Last December, MTN agreed to pay a separate $53 million fine after being accused of illegally repatriating $8.13 billion to South Africa.

The decision to impose fines shocked MTN and its foreign investors, with four commercial banks involved in the transfer also sanctioned.

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