There are four startups that allow Nigerians to invest in shares of public companies on US exchanges. But unlike Trove, Bamboo, and Chaka, Risevest’s app is not for users who want to trade stocks; instead the company itself invests on users’ behalf. On July 22, Risevest said its stock portfolio and real estate plan had made 12% and 9.04% returns respectively since the beginning of the year.
A week after announcing those returns, Eleanya Eke, the startup’s CEO, tweeted: “All your funds on Risevest are parked in the US, completely immune to Nigeria’s issues. And can be sent to any bank account in 140 countries. That’s freedom,” with a rocket emoji at the end.
Perhaps he spoke too soon, because 19 days later, on Aug. 17, a court in Abuja granted an order to the Central Bank of Nigeria (CBN) to freeze 15 bank accounts belonging to Risevest and the other three companies for 180 days.
The allegations against each company differ in some aspects: Risevest is accused of trading cryptocurrency against Nigeria’s ban in February, but the main complaint is that using dollars from Nigeria’s forex market to buy foreign stocks for users falls foul of a July 2015 directive, which placed purchases of Eurobonds and foreign currency shares on a list of banned items.
All four firms say that users’ investments are safe, that they can fund and withdraw from their accounts as usual. But a week after the order, an existential question remains: how will Risevest and co resolve the fundamental issues between them and Nigeria’s monetary sovereign?
Fighting Nigeria’s inflation since 2014
Even if “Robinhood for Africa” is how these startups are described, they did not start off with a mission to provide commission-free trading to amateur retailers.
Instead, they set out to give Nigerians a means to hedge against rising inflation—from 8.2% at peak oil prices in June 2014 to 17.4% this July. “If you are making returns in naira, no matter how high those returns are, eventually devaluation will take those returns away,” Eke, the Risevest founder, said in a 2020 interview.