The scandal at Nigerian unicorn Flutterwave is the tip of a toxic iceberg
Muyiwa used to dread going to the office at the Nigeria-based software development company where he worked as a social media consultant. “My former CEO used to come to the office sometimes and berate people till they started crying,” he told Rest of World. “One time, he got angry and fired all of us; people had to go beg for their jobs back, one by one.”
This kind of experience is startlingly common in Nigeria’s booming tech economy, according to startup employees who spoke with Rest of World. In April, the Nigerian tech sector was rocked by allegations of mismanagement, harassment, negligence, and bullying at Flutterwave, a $3 billion fintech company and an emblem of Nigeria’s tech sector. Flutterwave has denied the allegations, which included questions over the financial practices of the company’s CEO, Olugbenga Agboola, and the behavior of senior executives.
In March, the hashtag #HorribleBosses trended on Twitter in Nigeria, as tech workers unloaded allegations of toxic work culture, sexual harassment, and bullying at startups in the country’s booming tech sector. The outpouring was prompted by a report in the pan-African technology publication TechCabal, which alleged that Ebun Okubanjo, the CEO of the fintech startup Bento Africa, had subjected staff to verbal abuse and arbitrarily fired employees. Bento Africa declined to comment for this story. The company’s board suspended Okubanjo and launched an internal investigation.
Rest of World has spoken with industry experts, analysts, and staff at tech companies, who said that the accusations of toxic workplace behavior, bullying, and harassment are indicative of a widespread problem with work culture in Nigerian tech: one which holds back the sector’s development and poses a serious risk for the international investors who have poured billions of dollars into the industry — even though some of those investors are refusing to acknowledge the issue.
“I think that [the revelations across the industry] are consistent with the status quo,” said Adefunke Onafuye, founder of CV Loft, a Nigeria-based recruitment company. “The work culture in Nigeria is not exactly the healthiest.”
Employment in Nigeria can be precarious. Nationwide, the unemployment rate has hit 33%, with some estimates as high as 35%, and many working adults barely earn above the minimum wage of 30,000 naira ($72) per month. Even in white-collar jobs, workers are often on contract rather than being permanent employees. The country is in the midst of an economic slowdown that has hit employment and earnings further.
However, the technology sector is booming. Competition for tech talent is fierce and international, as Nigerian workers are able to sell their skills on the global market, either by emigrating or working remotely for overseas companies. In recent years, the globalization of Silicon Valley culture has also reshaped Nigerian tech workers’ perspectives about compensation and work culture, and they often closely follow pay and working conditions in other countries.
While this should translate into better conditions for workers, employers still hold — and exercise — undue power over their employees. “On some level, it’s a talent’s market,” said Onafuye. But, she said, that only applies for a small number of more experienced people. “For everyone else, especially young job seekers, power is skewed in favor of employers.”
U.S.-based incubators and investors have invested in the ecosystem, and some companies and CEOs have superficially adopted a more Silicon Valley–inflected work culture. But employees of venture-backed companies told Rest of World that the presence of a U.S. investor on a company’s cap table is no guarantee that the work culture will reflect Silicon Valley norms.
On Twitter, three employees at Wallets Africa, another company, like Flutterwave, that is Y Combinator–backed, posted allegations of unpredictable behavior by the CEO, John Oke, on Twitter. “He sacks people randomly for so many funny reasons, and you can wake up and find yourself out of the company’s Slack group,” said one former employee who spoke to Rest of World. Wallets Africa did not respond to requests for comment.
Six Nigeria-based tech workers who spoke to Rest of World claim this kind of experience was typical. Long hours and extra, unpaid responsibilities are commonplace, they said.
Workers told Rest of World that these kinds of experiences aren’t discussed too openly, as people fear repercussions. They spoke on condition of anonymity. Even senior managers at tech companies said that they are worried about the consequences of speaking up against the toxic work culture in the local market, for fear that it will affect their future prospects. When the Flutterwave allegations surfaced, people in the industry told Rest of World that they worried about being caught criticizing the company because of the power and influence of CEO Agboola, who is also a serial investor in startups. Flutterwave didn’t respond to a request for comment.
Techpoint AfricaEven though tech workers have said they feel the sector is due a reckoning for its entrenched toxic practices, it isn’t clear that the companies, or their investors, are overly concerned.
Industry insiders told Rest of World that they believe Flutterwave simply expects the controversy to blow over.
Investment bankers and lawyers who spoke to Rest of World in recent weeks have tried to downplay the significance of allegations and said that they expect the company to continue moving toward a stock market listing, albeit not imminently. “I’ve spoken with [Flutterwave CEO Agboola] and most of these stories have been previously reported,” one investment banker told Rest of World. The banker, who spoke on condition of anonymity, acknowledged he hoped to play a role in Flutterwave’s eventual IPO listing.
Some investors said that Flutterwave’s problems are an isolated issue and shouldn’t be used to undermine the African tech sector as a whole. “Any attempts to tar the entire African founder ecosystem are or will be unfair,” said Eghosa Omoigui, managing general partner at EchoVC Partners in Lagos. “In the evolution of any thriving entrepreneurial ecosystem, there will be occasional turbulence, and we need to be transparently honest about this possibility, humble and open to advice and course correction.”
However, others said that investors need to pay much more attention to company culture in their portfolios. To not do so would risk more scandals, which would undermine confidence in the sector as a whole, and could set back the nascent African tech ecosystem years.
“Africa lacks the latitude and goodwill to afford troubled unicorns like Fast and Theranos,” Barbara Iyayi, founding managing partner of Unicorn Growth Capital, a frontier market VC fund, told Rest of World, referring to two large U.S. startups that collapsed. She added that international investors should work more closely with local fund managers in Africa, who can help them “conduct deeper and contextual diligence” before investing.
“Ultimately, VC money will still flow into Africa, but we have to ask ourselves: What type of ecosystem are we building?” she said. “If we don’t address these fundamental issues, we’re going to have bigger problems with bad actors fostering awful company cultures and unsustainable businesses.”
Source: Rest Of World
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