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Jumia defends sales figures following controversial Citron report2 minutes read

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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Heavy rains threaten Uganda’s coffee crop quality

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Uganda’s coffee crop quality could see a decline in the coming months as heavy rains across the country have reduced the amount of sunshine necessary for bean drying.

Uganda is Africa’s largest exporter of coffee followed by Ethiopia and grows mostly robusta variety.

The country has been pounded by unusually heavy rains that started in August resulting in deaths, displacement and extensive damage to roads and other infrastructure.

Western Uganda, including the foothills of the Rwenzori mountains , some of the biggest coffee growing areas, has received some of the most intense rains.

Uganda Coffee Development Authority (UCDA), the state-run regulator, forecasts Uganda’s bean exports will climb 16 percent to 5.1 million 60-kg (132-pound) bags in the current crop year ending September.

The country’s coffee output has surged in recent years, the fruition of a government programme that has been distributing free seedlings to farmers to expand acreage and replace aging trees.

Authorities say their target is to help boost annual production to 20 million bags by 2025.

The beans have traditionally been Uganda’s biggest commodity export but were recently overtaken by gold which now annually earns the country over $1 billion.

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Business rescue team rule out mid-June return for SAA flights

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South African Airways business rescue practitioners have rejected an “unvetted” statement released by the state-owned airline indicating plans to resume domestic flights from mid-June.

The national carrier had on Tuesday, announced that its planes will be back in the skies between Johannesburg and Cape Town.

But Les Matuson and Siviwe Dongwana, the business rescue administrators, say the airline had breached communications protocol by issuing a statement which “created an unfair expectation on our relevant stakeholders, including SAA’s customers, as well as employees who are on unpaid absence as a result of the travel ban which led to the halting of the company’s operations, compounding its financial distress.”

SAA’s media statement had gone out without the approval of the practitioners as demanded by the business rescue procedure.

With the government of South Africa announcing that the country will enter into lockdown alert level 3 from June 1, domestic air travel will be permitted but only for business purposes.

The business rescue practitioners said SAA planes will remain grounded until a better understanding of what the level 3 regulations entail.

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Tanzania, France sign water supply loan agreement

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Tanzania has signed a loan agreement with France to finance water supply projects that will benefit about 770,000 people in the country’s Morogoro municipality.

The French government will extend the loan worth about $76 million to Tanzania through its French Development Agency (AFD), according to Dotto James, the Permanent Secretary in the Ministry of Finance and Planning who signed the agreement on behalf of Tanzania.

“Upon completion, the water supply in the Morogoro municipality will increase from the current 37,000 cubic meters a day to 108,000 cubic meters a day,” James told a press conference following a signing ceremony in Morogoro.

AFD Country Representative for Tanzania, Stephanie Mouen says the project will improve the well-being of the people in the municipality and it will also improve the environment.

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