In this episode, Ally Mwakaneno talks to African Private Equity and Venture Capital Association (AVCA) CEO Abi Mustapha-Maduakor on why global investors should invest in Africa, detailing the opportunities, gaps, and challenges in the continent. Abi talks about bridging the funding gap by providing data on different markets in the continent through providing data that allows investors and fund managers to make informed investment decisions. Abi and Ally close the episode by discussing investment trends in Africa for the past five years and some of the things AVCA looks forward to in 2021.
- Investors should consider Africa because seven out of the world’s ten fast-growing economies are in Africa, a testimony of the continent’s elasticity and opportunity. Africa is has a growing youthful population set to double by 2050, with many young people turning to entrepreneurship, presenting an opportunity to invest in them and their ideas.
- Data on the funding ecosystem in the market, thriving sectors, and deals guide investment pathways into new jurisdictions.
- Africa’s young ecosystem offers challenges developing infrastructure, varying regulations across the continent and currency devaluations. Investors respond to currency volatility by investing in businesses that are generating revenue in foreign currency. There are gaps in regulation across the continents. However, governments are increasing their commitment to creating a more enabling environment for both business and investment through fiscal policy, among other measures to attract FDI.
- Businesses in Africa could position themselves to be more investable by giving investors more confidence in how their finances would be used through separating personal and business finances and aligning back end operations through proper tracking of expenses.