Nigeria’s Flutterwave back to Kenya, tapping Egypt while eyeing North Africa

By Herald Onyango

Posted on Monday, 13 February 2023 14:37
A man poses as he displays the Flutterwave homepage on a mobile phone screen in Abuja, Nigeria January 21, 2020. REUTERS

Kenya’s decision to withdraw a financial impropriety case against Flutterwave and unfreeze KSh6.6bn ($52.7m) funds has staged the comeback of the Nigerian payments giant in the East African country after almost seven months. More recently, the company got the all-clear to offer payments and money remittance services in Egypt, the beginning of its North Africa expansion.

Flutterwave’s anticipated return to Kenya follows an application by the Asset Recovery Agency (ARA) in December 2022 to withdraw the case before the High Court, clearing it of any laundering allegations that limited its operation in its second-biggest Kenyan market after Nigeria.

A last-minute attempt by another third party, who wanted to be enjoined in the suit on behalf of over 2,400 Nigerian investors, was dismissed on 9 February by the same court due to lack of “sufficient interest”, according to Robert Gitau, an attorney representing Flutterwave.

“I can confirm the matter brought by ARA was withdrawn. There is no case. We are waiting on the final direction,” Gitau tells The Africa Report on the phone.

The court is expected to give the last and official direction on 16 February at the latest, including issues touching on regulations by the Central Bank of Kenya (CBK).

60 accounts frozen

CBK had previously issued an embargo ordering banks to cut links with the firm, noting that it was not a licensed operator. About 60 accounts spread among top banks such as Equity and GTB that held the billions were all frozen.

In the court filing, ARA alleged that the frozen bank accounts served as “conduits for money laundering”, especially through cards, and that the lack of a CBK licence was “concealing” the nature of its transactions.

While ARA has not provided the basis for withdrawing such a sensitive case nor given any public statement regarding the action, Flutterwave remains elated by just how fast things have moved for a company that has previously faced alleged mismanagement and sexual harassment.

“We are pleased to have this matter resolved so we can resume our work with our strategic partners in Kenya, providing innovative payment solutions to companies and individuals in one of Africa’s largest and most dynamic economies,” Flutterwave Founder and CEO Olugbenga Agboola said in a statement following the withdrawal of the case.

He adds that given the new entrants and accelerated pace of growth in Africa’s fintech sector, it can attract scrutiny and at times, suspicion.

Shake off tainted image

“Given our own rapid growth and status as a first mover, we anticipate and welcome the opportunity to be transparent about our operations and cooperate with regulators,” says Agboola.

The firm maintains its operations were regularly audited and it continuously complied with regulatory policies.

The company will now be looking to erase the money laundering tag that came on the back of its ambitious expansion plans across Africa to facilitate cross-border transactions in multiple currencies for various multinationals.

It is said that in his visit to Kenya last week, the CEO was in the company of Riva Levison, a top US lobbyist and PR guru, who has worked for former presidents like Ellen Johnson Sirleaf (Liberia) and Joyce Banda (Malawi).

Egypt entry

Flutterwave has already received a regulatory nod to operate as a payments and money remittance service provider in Egypt as it raves up its expansive drive to North Africa.

“We’re excited to receive the payments services provider and facilitator licences in Egypt. This, for us, is the beginning of other strategic wins in the North Africa and Middle East regions,” said Aalaa Gamal, Regional Manager in North Africa in charge of expansion and partnerships.

The tech giant, with a reach to 34 African countries, also renewed its operational licence in Tanzania and South Africa, as well as its International Money Transfer Operators (IMTO) licence in Nigeria.

In Kenya, where it supports payments for Uber drivers, Flutterwave will be looking to control the damage as CBK tightens its hold on the entire chain of the digital payment services sector. Some 22 Digital Credit Providers (DCPs) have so far undergone the fresh licensing exercise that officially commenced in September 2022.

Flutterwave, headquartered in San Francisco, offers payment technology services for merchants, and processes payments on the Web, mobile, ATM, and points of sale globally through one application programming interface (API).

Last year, the tech firm announced it raised $250m in a Series D round that tripled its valuation to over $3bn in just 12 months. The company has plans to list Nasdaq Stock Market and enter the lucrative lending market as it gears for more growth.

It has served more than one million businesses and processed more than 400 million transactions worth over $25bn since its inception in 2016.

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