Africa is not Complicated!Dec 22, 2022
It was the autumn of 2017 and I had just finished chairing a panel discussion in London on investing in Africa. Afterwards, I engaged the Principal of a well-known family office on how his firm is investing in Africa. His response shocked me, he said: ‘Evans, we would invest in Africa but we do not know where to start’.
This is a familiar remark I have heard again and again from investors large and small in Europe, the Middle East and the United States.
In the minds of investors, Africa has the unfortunate tags of being a complicated and unsafe investment destination. Neither of this is particularly true especially when juxtaposed against other regions.
I can count some of the countries in which I have been engaged in business of some kind over the years such as the UK, US, Ukraine, Russia, Kazakhstan, Uzbekistan, Georgia, Azerbaijan, Iran, Bahrain, Kuwait Latvia, Estonia, Lithuania, Sweden, Saudi Arabia, UAE, China, Bulgaria, Belgium, Mongolia, Romania, Germany, Netherlands, Nigeria, India, Pakistan, Sri Lanka, Egypt, Mali, Tanzania, South Africa, Singapore, Taiwan and Japan to name a few.
In all of these countries with a few exceptions; I have had some headaches in terms of securing our investments and the ease of doing business. Therefore, having complications en route to investing or doing business is a fact in most parts of the world and is not restricted to Africa alone. In fact, Europe is rapidly becoming a difficult place to do business and invest because of a lot of the unnecessary regulations.
A lot of what is termed ’complications’ is simply down to a misunderstanding of the culture and mind set.
Most investors that invest in a new region or country only focus on the financial aspects of the transaction but not understanding the culture and social framework into which they are investing. This is a fatal mistake. In any venture, the cultural considerations must be paramount because culture drives behaviour. If this is true for mergers and acquisitions in the same city, how much more, nations hundreds or thousands of miles apart.
I remember when I started going to Africa for business and was shocked at how slow things were in some countries; having grown up in the London, where everything is very fast and efficient, I had to learn to exercise patience. There were also occasions when I will try to do a deal remotely (pre pandemic of course) only to be told that I had to fly in for a face to face meeting, as this is the only way I can be trusted.
Having said that, I will also say that I detest some local norms, like bribery, which I always flatly refuse to partake, in primarily because even though it may have been beneficial to me personally, it increases inefficiency and the cost of doing business in these countries.
By the way, bribery and corruption is not restricted to African, South American and Asian countries, it is unfortunately a global phenomenon, but in developed countries, it is much subtler because of the legal penalties.
However, the overall message my readers must take away from this blog is - Africa is not a complicated and dangerous place to do business or invest, it is just different, both - as a continent and as individual countries.
A business person or an investor just needs to take the cautious approach like they would take in any market to know who they are doing business with and the prevailing culture and norms.
Africa is a vast and indescribably rich continent, even now and the benefits of being in the continent far outweighs any potential risks.
Just like in any field of endeavour, at the beginning, one needs a guide, a door opener, a teacher to show the fundamentals and hold your hands as you take the first steps into a completely different world from the one you have previously known.
This is why we have created Africa Investment Academy, to remove the mystery out of investing on the continent of Africa. It is designed to fully incubate potential investors in Africa. We will teach you, guide you in your first investments, provide you with curated investment opportunities, give you an opportunity to influence policy making and bring you in to our community of investors that are investing in Africa.
The scale and potential of the continent of Africa is extraordinary, so join me and let us industrialize Africa together.
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