• AfDB’s $618m tech start-up investment, Adeleke creates support desk for Osun innovators
• US Vice President Harris promises greater investment for Africa
With the rise of many startups in the technology and creative industries in Nigeria and the continent, Africans have been urged to work more on creating solutions to problems rather than rely solely on remittances and grants from the diaspora.
Speaking at the weekend at the African Diaspora Investment Summit (ADIS) organized by the African Diaspora Network (ADN) in Silicon Valley, California in the United States, CEO and General Partner of Fund for Africa’s Future (Future Africa), Iyinoluwa Aboyeji, said over-reliance on remittances from diaspora without adequate scale-up in human capital would limit Africa’s progress into development.
According to him, diasporans have three Ts – Time, Talent and Treasure, but there is too much attention on the treasure. Making reference to the logistics challenges that have characterized the demonetization policy of the Central Bank of Nigeria (CBN) for weeks, he said “I recall when India set up its demonetisation policy some years back, it engaged the talents of its diaspora community. Nigeria is a much smaller country than India. As a giant of Africa, we shouldn’t be going through the hassles the CBN policy has caused in weeks now if the infrastructure end of the cash policy had been sorted before implantation and roll out.
As head of Future Africa, which is Africa’s largest seed-stage investor, Aboyeji has invested millions of dollars into over 100 startups across Africa. This was after co-founding Flutterwave, a billion-dollar global payments platform connecting African businesses and individuals to the global economy.
Speaking to The Guardian, he said: “Africa is on a journey, but we are not going to get there by copying models from other places or throwing money at the problem. It is going to require intellectual investment. There should be a mindset shift that you don’t need diaspora money as much as you need the knowledge transfer.
“What we need in Africa is skills to solve problems and human capital development to scale up on their ideas. When they say it is better to teach people how to fish than keep giving out fish, that fish is not investment, it is a skill. You can’t teach a man to hold money, anybody can spend it. When you teach them how to earn money, they too can earn dollars on their own and you don’t have to give them remittances.
“For me, the big thing is investing in solutions to problems. I don’t invest in technology, I invest in problems and solutions to the problems. Many times people are so big on the technology, but really it is about the outcome. Will this solution reduce cost, make money and bring about breakthrough in terms of efficiency. As long as you answer those three or one of the three questions, you are in technology for digital transformation. I will tell our young ones, keep working on solving problems and don’t believe the lie that if it is not technology, it is not the solution to a problem.”
Aboyeji added: “There is a lot of money in Africa, we raised $10 million fund at the wake of COVID in the last two years and 60 per cent of the capital came from Africa. What it tells us is that a lot of resources and opportunities are in Africa but unfortunately, a lot of government’s borrowing or policies tend to crowd out these investments and startups.
“Despite the odds, you still have a lot of African investing their personal savings in innovative solutions to help Africans while a lot of pension funds, money sitting in the banks and public funding are crowded out by government bonds and borrowings.”
Board Chairman of African Diaspora Network (ADN) and Founder/Managing Partner, Ignite Venture Studio, Josh Ghaim, said the ADN through its annual symposium, ADIS and other programmes, is seeking to connect the bridge between diaspora funding and investment to startups in Africa seeking to develop the continent with their innovative solutions to problems.
“I don’t want to simplify it and say money is easy to find but the most important criteria is the human capital. We have a large community of diasporans in America and the West who are high up in corporations, government and the academia and who understand the business and what it takes to thrive, but how do we harness this resources and make these people available to help entrepreneurs in Africa.
“Entrepreneurs don’t have to repeat all mistakes or go through the hassles that could be avoided. The number one priority of ADN is to deploy and engage these resources available to everyone through mentorships. And its not just Africans, but African Americans and friends of Africa. We want to help their businesses scale to the next level with investible funds. Through Builder of Africa project, we are giving them $25,000 and the technical skills to scale up their businesses.
“This is why beyond remittances is important. Unless we create awareness, we are not going to engage fully into the resources of the diaspora community.”
Tech and creative industries have grown recently in Nigeria and have made it a ground for start-ups in these sectors. Propelled by a higher density of youth population and amount of internet penetration, the country has produced successful tech companies like Flutterwave and Paystack, as well as intense growth in the music and movie industries.
Last week, the African Development Bank (AfDB) launched the Investment in Digital and Creative Enterprise (i-DICE) program which is a coalition between the French Government through the Agence Française de Développement, the Federal Government of Nigeria, through the Bank of Industry and other private and public sponsors totaling $618 million in funds to be invested.
Nigeria’s economy stands to gain a great deal from the involvement of i-DCIE, as the tech and creative industries have the potential to bolster economic development and provide employment opportunities for the country’s large population. Therefore, i-DCIE’s intervention is timely
According to Jobberman, jobs in Nigeria can be increased by the creative sector as it could create additional 2.7 million employments for individuals by 2025. By providing access to economical finance, training, and advice, start-ups can now overcome the frequent issues that have usually prevented their advancement. Thus, encouraging the growth and progress of the creative and technology industry.
Governor of Osun State, Senator Ademola Adeleke has directed the immediate establishment of a support desk for Osun tech innovators and entrepreneurs to access the recently launched $618m tech fund.
In response to the tech fund which was a collaboration between the AfDB and the Federal Government of Nigeria, Governor Adeleke expressed the readiness of his government to tap into the opportunities in furtherance of the digital economy agenda of his administration.
Governor Adeleke who was full of praises for the AFDB president, Dr Akinwumi Adesina said his administration has created enabling environment for the Osun tech ecosystem, citing the recently unfolded state ICT Policy, State Tech Innovation Policy, domestication of Nigeria’s Startup Act, the flag off of the state’s broadband fiber optic project and the establishment of a Digital
Advisory Board, adding ” My state is in a hurry to be a tech hub for South West.
“As the Governor of Osun State, I am pleased to announce that the Ministry of Innovation, Science, and Technology has been instructed to set up a desk to assist all technology and creative sector entrepreneurs in Osun State to apply and access this fund. The desk will provide comprehensive guidance and support to all interested applicants, ensuring that the application process is seamless and efficient.
“We are also exploring partnerships with the African Development Bank to support programs in the technology and creative sector in our state. We will be reaching out to the bank soon to discuss how we can collaborate and leverage this fund and other opportunities to create a vibrant and innovative ecosystem in Osun State.
“I encourage all technology and creative sector entrepreneurs in Osun State to engage directly with the Ministry and register as a stakeholder operating within the state. This is a significant opportunity for our entrepreneurs to grow their businesses, while also contributing to the growth and development of our state”, the State Governor stated.
Meanwhile, U.S. Vice President Kamala Harris said on Sunday that the United States will increase investment in Africa and help spur economic growth as she began a week-long tour of the continent aimed at offering a counter to the influence of rival China.
China has invested heavily in Africa in recent decades, including in infrastructure and resource development, while Russian influence has also grown, including through the deployment of troops from Russia’s private military contractor Wagner Group to aid governments in several countries.
“On this trip, I intend to do work that is focused on increasing investments here on the continent and facilitating economic growth and opportunity,” Harris said shortly after touching down in Ghana, the first destination in a trip that will include visits to Tanzania and Zambia.
The administration of U.S. President Joe Biden has sought to strengthen ties with Africa, in part to offer an alternative to rival powers.
In December, ahead of a U.S.-Africa summit, the U.S. committed $55 billion to the continent over the next three years. Secretary of State Antony Blinken announced $150 million in new humanitarian aid for Africa’s Sahel region during a visit to Niger this month.
Biden is yet to visit Africa as president.
On this trip, Harris will also discuss China’s engagement in technology and economic issues in Africa that concern the United States, as well as China’s involvement in debt restructuring, senior U.S. officials said last week.
Harris will meet Ghana President Nana Akufo-Addo this week and will visit a former slave castle from which slaves were sent to America during the slave trade era.
Harris will be in Ghana from March 26-29, then in Tanzania from March 29-31. Her final stop is Zambia, on March 31 and April 1. She will meet with the three countries’ presidents and plans to announce public- and private-sector investments.
