- When it comes to attracting capital, Namibia is pursuing a strategy that welcomes both traditional and non-traditional capital without restrictions on geography. According to James Mnyupe, Namibia is looking to set up green, blue, and transition bonds as well as launch a central securities depository on its stock exchange to allow for the electronic settlement of bonds.
“It’s not just access to capital that SMEs need. The visibility, market access, network—all of these are elements we need to bring to the table,” James Mnyupe
- For Aubrey Hruby, a major challenge for the African continent is its fragmentation and the landlockedness of certain African countries, which contributes to the high cost of conducting business. The African Continental Free Trade Agreement seeks to reduce barriers to doing business on the continent and enable freer intra-continental movement of people, goods, and capital.
- Aubrey explained that U.S. investors seeking to enter the African market face four major obstacles: lack of data (especially early-stage data), lack of network and trust, low visibility, and lack of financial innovation when it comes to structuring.
- Fostering entrepreneurship remains a priority for Namibia. Mnyupe revealed that the country is planning to join forces with a professional small and medium-sized enterprise (SME) developer that would manage Namibia’s institutional savings pool of roughly 200 billion Namibian dollars. Moreover, Namibia is planning a significant push into renewables: the country’s sizable land mass, coupled with its fairly small population, allows for the cost-effective deployment of large solar and wind farms.
“The U.S. government and others need to be much more cognizant and deliberative about the depth of their engagement in the [African] continent—the tools they provide to their companies, the way they help to de-risk these transactions,” Grant Harris
- According to Grant Harris, China’s engagement in Africa is deep, deliberate, and multifaceted. To remain on par with China, the U.S. government needs to be much more cognizant and intentional about the depth of its engagement in Africa, the tools it provides to companies seeking to enter the African market, and the strategies it is pursuing to help de-risk U.S.-African transactions. Josh Sandler reinforced this, highlighting the challenges his company (Lori Systems) has faced securing capital from the U.S. and saying it’s increasingly looking to China as well as African investment, citing a new investment from South Africa.
- Aubrey explained that while foreign direct investment on the continent is down by 30%, the African venture space has proved notably resilient and has significantly benefited from the COVID-induced fast-tracking of digitization.
- The current investment environment does offer rewards for those that can navigate the complexities, and some ‘savvy’ investors are seeing outsized returns. Paystack (recently acquired by Stripe) and Sendwave (purchased by WorldRemit) are two recent examples. Lori Systems’ investors have seen 8x returns in the past three years.
“You can’t invest in things you don’t see. The reason this Stripe acquisition of Paystack is so important is that it injects enormous visibility into the region,” Aubrey Hruby