That’s the word that comes to mind when we think of 2022. The world expected a train ride, but instead it was met with a roller coaster. After the launch of the covid-19 vaccine and a gradual rebound in oil prices in late 2021, the expectation was that 2022 would usher in a global economic boom. We were wrong. It has been a failure.
A war began between Russia and Ukraine, shaking the whole world. Now, fears of a global recession are even greater than during the lockdowns.
At the height of the covid pandemic, the technology industry was one of the best performing sectors. But this time, the opposite is happening. Technology is the poster child for this economic downturn. From legal troubles to stock sell-offs to mass layoffs and even closures, we’ve seen a lot of unexpected events this year. And some of these events have happened in or affected Africa. Here’s a roundup of some of the most controversial events to rock Africa this year.
The Russia-Ukraine War
The first event of the year to shake Africa, and probably the most crucial, did not happen in Africa, but in faraway Ukraine. On February 24, Russia invaded Ukraine’s borders on a large scale from Belarus to the north, the Russian-annexed Crimean peninsula to the south, and the territory to the east.
While both countries were fighting, several countries, including African ones, were debating which side to take. Votes at the United Nations (UN) on the war revealed strong divisions between countries of the continent.
However, the war became the moment of truth for African economies, as everyone saw how dependent the continent had been about these countries. For example, before the war began, Africans made up more than 20 percent of Ukraine’s international students, including more than 8,000 Moroccans, 4,000 Nigerians and more than 3,500 Egyptians. Since then, he has opened Africa to several other vulnerabilitiesas imported inflation and spikes Interest rates. African countries have also had opportunities, some of which did not explode properly.
Bento and the #HorribleBosses trend
In March, employees of Nigerian startups had a shocking #MeToo moment over workplace abuse on social media. It was “shocking” because before that, the only narrative about the Nigerian startup ecosystem was its impressive growth.
But this time it was different. The #HorribleBosses hashtag trended on Twitter for nearly a week, garnering more than 100,000 tweets on the first day, as several workers denounced employers for their toxic work culture.
The conversation was sparked by a story published on March 21 by TechCabal detailing allegations of workplace abuse in Bentoattributing the toxic culture at the Lagos-based payroll startup to CEO Ebun Okubanjo.
That story fired Nigerians so much that they a Twitter space on the subject lasted almost eight hours, extending until Tuesday morning with more than 91,000 listeners. Many others came to realize how many industry loves like Kuda, GoKada, ULesson, Prospa, LifeBank and WalletAfrica had been underpaying and mistreating their staff. But somehow, this wasn’t the biggest startup controversy we witnessed this year.
flutterwave in a storm
The biggest controversy in Africa’s startup ecosystem came from the fintech poster child. On April 4, Clara Wanjiku Odero, a former Nairobi-based executive at Nigerian fintech unicorn Flutterwave, posted an explosive article on Medium, claiming that she had been intimidated and harassed by the company’s current CEO, Olugbenga “GB” Agboola.
Then, on April 12, David Hundeyin, a Nigerian investigative journalist, published a piece alleging that Agboola had a history of misconduct. According to Hundeyin, Agboola had created a ‘co-founder’ ghost identity to grant himself more shares in the company’s early days and offered share prices below the company’s valuation to employees who wanted to cash in on their vested options. The story alleged that these employee share sales went to an investment vehicle controlled by Agboola.
Flutterwave quickly became a hot topic, with many fearing that it could have a ripple effect throughout the ecosystem. This was because Flutterwave had raised $250 million in February, bringing its valuation to over $3 billion and making it the most valuable unicorn in the industry.
Earth and the lunar eclipse
Over the past two years, cryptocurrency adoption has grown faster in Africa than in any other region. The need to hedge against inflation, create new wealth, and make payments without borders has led many Africans to store their money in cryptocurrencies and stablecoins.
However, 2022 was not kind to the crypto markets. It was one of the most devastating bear markets that wiped out around $2 trillion in digital asset wealth. One of the triggers for this sell-off was the crash of Terra, one of the largest crypto networks.
At its peak, Terra was the fourth largest blockchain network after Bitcoin, Ethereum, and Binance Chain, and Luna, its native token, was trading for around $116.
Many of Terra’s users staked their UST holdings on the Anchor lending platform for a 20% annual return. But on May 7th, over $2 billion in UST, Terra’s native stablecoin, was withdrawn (pulled out of the Anchor Protocol) and hundreds of millions were quickly liquidated. There is some debate as to whether this happened in response to rising interest rates (no thanks, Putin) or whether it was a malicious attack on the Terra blockchain. The sell-offs brought the price of the UST down to $0.91 from $1. After this happened, traders began selling Luna, Terra’s native token, and its value fell below $1.
This streak of events wiped out billions of dollars from the entire crypto market, and everyone who gambled on the Terra blockchain lost all their money. Today, there is an arrest warrant for Do Kwon, the founder of Terra.
Nigerian Fintechs vs Kenya
In July, Nigeria’s fintech ecosystem returned to the controversial spotlight. The Kenya Asset Recovery Agency (ARA) had been investigating transactions made by at least ten Nigerian companies and in June froze many bank accounts linked to them.
One of these companies was Flutterwave, which at the time was still struggling to stabilize its ship after a previous storm. The Kenyan high court froze 52 bank accounts owned by Flutterwave with a total balance of $45 million and ten other bank accounts linked to the company but operated by other entities, including Boxtrip Travel and Tours, Bagtrip Travel, Elivalat Fintech, Adguru Technology, Hupesi Solutions. , Cruz Ride Auto, and one individual, Simon Ngige.
Two other notable names that became entangled in the ARA web were Korapay and Kandon technologyis. Both are TechStars-backed fintechs, founded in 2017 and 2019, respectively. All three companies denied the allegations, claiming they had verifiable evidence.
The FTX scandal
The crypto space had its biggest success in November of this year when FTX, one of the largest exchanges, filed for bankruptcy. The firm was once heralded as the Goldman Sachs of cryptocurrency, and its chief executive, Sam Bankman-Fried, was seen as a heroic figure in the space. This was partly because the firm had such a mainstream presence that they bought the rights to name the Miami Heat Arena “FTX Arena” and had endorsements from prominent figures like Tom Brady, Stephen Curry, Shaquille O’Neal and Larry David.
But all those dreamy eyes came back when people lost billions of dollars from the company implosion. FTX went from being worth $32 billion to having nothing in the bank. However, the real scandal was not that the company lost money, but that it embezzled funds. Sam Bankman-Fried went from being called the Warren Buffet of cryptocurrency to being labeled the “Jordan Belfort of the cryptocurrency age.”
Faced with its imminent collapse, Binance, the largest crypto exchange, offered to buy FTX to save the company. But Binance did a U-turn on that decision after finding out that FTX had mishandled client funds.
Today, Sam Bankman-Fried has been arrested and will stand trial. But the effects of his scandal caused several irreparable losses. In Africa, the platform had gained so much penetration that it was processing billions of dollars a month on the continent. After it collapsed, several startups, including Nestcoin and Chipper Cash, had to lay off employees and cut wages to stay afloat.
The takeover of Twitter
This was possibly the most dramatic event of the year. It’s definitely not as outrageous as FTX ruining people’s life savings. But one could almost write a sitcom out of the entire series of events. Ever since Elon Musk bought Twitter for $44 billion, there has been one episode of controversy after another. From laying off thousands of employees, including the entire African team, to selling verified check marks, each episode had a new drama.
But while people are either amused or disgusted by all the drama, many are wondering what the future holds for Twitter. And it’s not just because of his fast-moving management style. Following his controversial posting of the controversial Twitter files in collaboration with Matt Taibi and a few others, many have pointed out that Musk’s leadership on the social platform is politically motivated. Would this be the end of an empire or a new beginning for a dying social platform? We’ll have to cross our fingers.