Report Summary
In the second part of the COVID-19 Insights report series, we will be taking a pulse check on two sectors: Telecommunications (Media) and Banking.
These industries have been critical and essential during the total (and partial) lockdown period in Nigeria and Kenya. We will also be looking at their contributions and activities, as well as consumer chatter around these sectors.
In Nigeria and Kenya and their enforced lockdown, companies, schools, and religious organizations have adopted remote and online mediums of collaborating and transacting for work, learning, entertainment, religious activities, and even when paying for commodities. This has put the Telecommunications and Banking sectors in the spotlight to ensure smooth services this critical period. The report covers relevant news and chatter from April 1st, 2020 to date.
Disclaimer: Please note as you proceed to read this report. This report leverages our proprietary “Listen Methodology” to show how the African consumer markets are reacting to the lockdown due to the COVID-19 pandemic.
Topics
Impact News/Posts – Online news, forums and blogs. Pertinent news articles or posts with associated sentiment (based on impact/rankings) on the following:
• Telecommunication (Media)
• Banking
Sources
Statistics
Snapshot Overview
Sentiment Distribution (online news, forums & blogs) - the top high traffic sites with at least 1000 articles from each Nigerian site, and 500 from each Kenyan site.
In Nigeria, sentiment trended mostly negative (see “Key Takeaways” Section).
In Kenya, sentiment trended mostly neutral, with a high percentage of negative sentiment (see “Key Takeaways” Section).
Twitter Overview
Versus Twitter breakdown from both Nigeria and Kenya
We used the following keywords and hashtags:
🇳🇬Nigeria—Sentiment
In Nigeria, Twitter chatter trended mostly neutral, with 39% negative sentiment (see “Key Takeaways” Section).
🇰🇪Kenya—Sentiment
In Kenya, Twitter chatter sentiment trended mostly neutral, however there was a high percentage of negative sentiments (see “Key Takeaways” Section).
Note: Our Versus product’s sentiment analysis engine is producing scores using proprietary high or low probability outcomes where mentions are either positive, neutral or negative. These figures are not to be used as statistical representations as they are evolving algorithms strictly relevant to our proprietary system that is trained and learned on a continuous basis as new data (including language and source structures) is fed.
Trends Analysis
Telecommunications (Media)
Telecommunications and Internet Service Providers (ISPs) have been one of the major gainers during the lockdown in Nigeria and Kenya. For instance, in Nigeria, when the lockdown started on March 30th, 2020, there was a surge in internet usage and traffic. According to the CEO of Internet Exchange Point of Nigeria, there was a 10% increase in traffic in the first two weeks of the lockdown. More people are home and need internet data for work, school, and entertainment.
Zoom Video Communications, the video and web conferencing solution, became popular across Africa (including Nigeria and Kenya) during this period. In January, Zoom’s stock price was $68.80; by May 1, its stock increased to $138.56. Zoom has boomed in popularity as workers have been encouraged to practice social distancing to reduce the spread of COVID-19. Another beneficiary of the quarantine period is video-streaming, subscription-based media company Netflix who has also gained massive revenue and popularity. In January, Netflix’s stock was $326.10 and on May 1 it increased to $415.27.
Stock prices of the top virtual platforms (in dollars)
These are top platforms that have experienced an increase in demand during the pandemic in various countries. The need to continue working, learning and staying entertained during this period has increased the demand for these products, and by extension the increase in internet usage.
Nigerian Telecommunications Industry
Nigeria operates one of the largest telecommunication industries in Africa with few firms in the space like Airtel, MTN, Glo, and 9mobile (formerly Etisalat), as the top mobile service providers.
Sources: CBN Annual Reports, Etisalat Annual Reports
In 2008, 3G was officially launched in Nigeria by GloMobile, followed by MTN and 9mobile (formerly Etisalat) in 2011. 4G LTE — which is said to be 10 times faster than 3G — was launched in 2016 by MTN, followed by Glo Mobile and 9mobile. Airtel launched its 4G LTE in 2018, a development that led to an increase in their subscribers.
GSM Market Share (January 2020)
MTN currently has the highest number of subscribers in the Nigerian telecommunications market, and they are the first telecommunications company to be listed in the Nigerian Stock Exchange.
Telecommunications in Kenya
The Kenyan telecommunications sector began with the establishment of Safaricom Ltd and Airtel Networks Kenya in 1999. In 2008, two other operators joined the industry: Essar Telecom Kenya Ltd (YuMobile) and Telkom Kenya Ltd (TKL-Orange). They have seen a steady increase in the number of subscribers, with Safaricom holding the largest share of subscribers in the country to date.
Telecommunications/Media Chatter
insert telco sentiment graph for Nigeria here...
Key Topics (Nigeria)
Cost of Data
The Telecommunications sector chatter in Nigeria had 89% negative sentiment due to complaints by consumers on the lack of sensitization on cost of data services especially since their spending increased along with their mandatory online activities.
#MoneyHeist
During the quarantine, Nigerians have turned to entertainment streaming platforms such as Netflix, hence increasing the demand for internet data. This topic (a popular show on Netflix), while serving as a good distraction away from the turmoils of COVID-19, trended mostly neutral, mainly from varying conversations and opinions based on the show.
5G Network
Despite the continuous scientifically-backed assurance that the 5G network has nothing to do with the Coronavirus, sentiments around this topic trended negatively on Twitter. Nigerians spoke against the 5G network with a number of them attributing the lockdown to telecommunications companies wanting to lay down the structure for 5G. This was hugely championed by twitter user @felix_ninelives whose handle has since been suspended for violating Twitter rules.
insert telco sentiment graph for Kenya here...
Sentiment
Percentage
Negative
18%
Neutral
27%
Positive
55%
Insert Pie Chart
Sentiment around the Kenyan telecommunications sector was mostly positive during this period, largely due to the measures being put in place by companies to help cushion the effect of the partial lockdown due to the Coronavirus in the country.
Key Topics (Kenya)
E-Learning
Despite the huge technology gap amongst students in Kenya, e-learning has been adopted in cushioning the effect of restrictions placed on schools, and students are in a race against time to find the right tools to join their counterparts. Airtel Kenya partnered with Longhorn to ensure continuous access to the platform through free internet for subscribers.
Safaricom
Safaricom seems to be living up to its reputation as the top telecommunications provider in the country by committing towards helping the government provide for Kenyans. The various initiatives have been laudable, generally attracting positive sentiment. This topic trended 88% positive despite attracting negative sentiments from consumers due to service downtime.
Banking Sector
Since the lockdown started, online banking platforms (including mobile applications and Unstructured Supplementary Service Data - USSD) have become more popular. Cash transactions are not as popular in these times due to directives from health agencies to avoid it as much as possible and also people not wanting to touch physical notes for fear of contracting the virus.
Nigeria
Stock prices (in Naira) of the five Tier-1 banks in Nigeria in the past year
Source: Investing.com
In general, the stock prices of the Tier-1 banks have declined in the past year, especially since the Coronavirus pandemic. There was also a general decline in stock prices for a lot of industries across the world.
Kenya
Stock prices (in shillings) of five Tier-1 banks in Kenya in the past year
Source: Investing.com
Stock prices of Tier-1 banks in Kenya also experienced a dip. However, the decline has not been too drastic, and so far it is looking promising, with various loans being granted to help in stabilizing the Kenyan economy.
Banking Chatter
Key Topics (Nigeria)
Economic Stimulus Bill 2020
The Nigerian government introduced an Emergency Economic Stimulus Bill which seeks to protect companies and alleviate the financial burden on citizens due to the economic imbalance that may arise from the COVID-19 outbreak. The bill, effective from March 1st to December 2020, will grant registered companies 50% income tax rebate under the personal income tax.
Physical Banking Activities
There was an overflow of customers at some Nigerian banks that opened on May 4th when the lockdown was eased in Lagos and Abuja. Reasons for this could be attributed to poor internet banking services, failed transactions during the lockdown, expired ATM cards that need to be renewed, account holders with fixed deposit accounts or retirees who can only access their account using bank tellers. Even though there has been an increase in the use of digital payments, there is still a major challenge for the banks to improve on their dispute resolution and customer service. Users also shared images and footage of the long queues from various bank locations across the country.
Dangote Cement Plc Bond Issuance
Africa’s leading cement manufacturer, Dangote Cement Plc issued the first of its Fixed Rate Unsecured Bonds with an amount of N100 billion (about $222 million). Despite the uncertainty in the financial markets caused by COVID-19, this bond issuance has been oversubscribed by a wide range of investors like asset managers, insurance companies and banks proving to be a pseudo-stimulus for these financial institutions.
Key Topics (Kenya)
Loan Restructuring
This topic attributed to most of the positive feedback from Kenyans largely receptive to the news of the Central Bank of Kenya ensuring commercial banks issue loan restructuring options and extension of loan payment dates.
Tax Waiver
Despite the recent 2% reduction in VAT to 14%, some counties have also gone ahead to approve tax waivers for their local businesses and traders, to help cushion the effect of the Coronavirus. However, the implementation of 14% VAT on power consumption still attracted negative sentiments around this topic.
Key Takeaways
The Nigerian news sources we covered during the date range of this report, had mostly negative news reported, largely attributed to a steady increase in the number of confirmed cases of Coronavirus in the country. Companies have continuously championed the fight against the Coronavirus through large donations and grassroots sensitization, which helped balance out the sentiment towards the positive. The Twitter sample chatter we covered for Nigeria consisted of a lot of opinions retweeted or analyzed further with locals sharing different perspectives on lingering topics around COVID-19. Most of these were attributed to the neutral overall sentiment scoring by Versus. From the negative side of chatter, it consisted mainly of locals expressing their displeasure with the lack of tailored ‘solutioning’ from their government, as well as soaring prices from essential industries taking advantage of their pole positions during the pandemic.
The high neutral sentiment recorded from the Kenyan news sources is a result of sensitization of the public and general government announcements on next steps in fighting the coronavirus. However, the challenges faced by the citizens attracted a number of negative chatter, mainly around the issues of heightened racial tensions with the Chinese following viral content that circulated about the racist comments made by a Chinese man and the apparent lack of proper government reprimand to send a stern message against it.
With the world in lockdown the past few weeks (Nigeria and Kenya included), there has been a continuous demand for virtual meeting rooms for work, as well as an increased demand in entertainment streaming platforms and e-learning sites, which has led to an increase in some media companies’ stock prices, despite the stock market suffering a dip. In general, similar internet-related businesses in these countries are in an opportunistic position to attract viable investments.
From what we highlighted in the spike in demand for online tools for either work (Zoom, Microsoft Teams, etc), learning or entertainment (Netflix), telecommunication providers in both Nigeria and Kenya are benefitting from the consumer behavior that has now made internet data a necessity. As we covered in our last report during the beginning of the lockdown in these countries, internet data is officially a Grade A Commodity. As companies are experiencing a more cost-effective approach in continuing remote work, it will likely be a common norm adopted by a majority (both individuals and companies) going forward.
Following the decline in banking stock prices of Tier-1 banks in Nigeria and Kenya, banks need to be more strategic in positioning themselves post-pandemic. With huge crowds of people wanting to gain access into banking halls upon the ease of the lockdown in Nigeria, this is the perfect time for an overhaul in areas like customer literacy and access to alternative banking operations.
In Nigeria, following the announcement of easing the lockdown from May 4th, and the crowded lines outside the banks, it is very clear that digital banking is still at a very nascent stage without adequate adoption representation in the country.