Infrastructure is not glitzy but investment is necessary
Dangote avoids fancy tech investments but he still lays a groundwork
Like many others who are bullish on tech investment prospects on the continent, I initially felt a little let down by Dangote’s global diversification blueprint. However, upon reflection, I have to admit that if I were in his position, I might have a similar outlook.
There is, after all, only so much uncertainty one can comfortably take on when managing substantial wealth amassed in a single generation. The stakes in legacy terms are fairly high.
It is tempting to buy into the glitzy notion that all Africa needs to escape the poverty cycle is the internet, mobile phones and clever software applications.
Some even believe that Africa might do well to harness the mobile adoption wave in order to “leapfrog” other technologies. However, in a think-piece titled “Leapfrogging Progress: The Misplaced Promise of Africa’s Mobile Revolution”, recently published by Calestous Juma, professor of Practice of International Development at Harvard Kennedy School, he asserts that while there is some basis for embracing the growing adoption of mobile devices by Africans as a “symbol of leapfrogging”, it would be unwise to discount the role of infrastructure in enabling the much-lauded mobile-related progress currently sweeping Africa.
Juma considers infrastructure to be foundational to economic growth, describing it as “the motherboard of technological innovation”.
Let’s face it, Dangote has already done more than most to invest in pragmatic plays that I believe will give Africa the necessary infrastructural backbone to assert itself more confidently on the global stage.
While I’m not sold on his reasons for not investing in African tech start-ups, I appreciate the fundamental role the infrastructure investments he’s made have played in moving the needle in terms of sustained economic growth for the continent.
In his article, Juma points out that upon close inspection, infrastructure ventures are technological in nature.
It’s not difficult to see how much scientific and technical expertise is required to successfully execute on cement production, sugar processing or even petroleum refining, regardless of whether or not Dangote actually views such enterprise as tech plays.
While my Pan-African spirit is a bit sore at the prospect of more and more of Dangote’s wealth being deployed off-shore in the coming years, I must acknowledge how such a move might signal that Africa is coming into its own as a global economic power.
At Afrobytes Conference 2017 hosted in Paris in June, Pierre Gattaz, president of Medef, France’s most powerful business association, kept it 100 in his opening address when he said that, given Africa’s growth prospects, his organisation couldn’t afford to ignore the fact that Africa is not only poised to deliver inestimable value in terms of being a lucrative consumer market for French goods and services, but also that the continent would undoubtedly become a source of finance for French businesses.
Dangote appears committed to making such a future a reality by normalising the significant flow of African wealth over the world in pursuit of global diversification.
I’m not letting Dangote off the hook, mind.
It would be awesome to see him bet on some more overtly cuttingedge tech investments on offer within the continent’s tech industry.
How cool would it be for him to lead a high-profile investment drive in a tech genre that’s popping off right now? Committing one or two hundred million dollars to a couple of promising start-ups within fintech, agritech, renewable energy or broadband fibre infrastructure might do the trick.
Or maybe he could go big and buy Dimension Data’s African operations from Nippon Telegraph & Telephone Corporation, which is rumoured to be looking to unbundle that business. Come on, Mr Dangote, give this tech commentator something juicy to write about.
Meanwhile, in South Africa, AlphaCode is flexing its international muscles.
The fintech investment arm of Rand Merchant Investment Holdings recently announced its participation in Prodigy Finance’s $40.4 million Series C equity round.
Prodigy is an international fintech platform whose claim to fame is having developed “the world’s first borderless credit model”. The investment was led by venture capital firm Index Ventures, which then roped in Balderton Capital, AlphaCode, as well as a global investment bank to finance a R202.2 million debt facility.
Prodigy Finance offers loans to postgraduate students accepted into business, engineering, law and public policy degrees at the world’s top universities.
The UK-headquartered company is celebrating its 10th anniversary, and the raise will help expand operations in its subsidiary locations – Cape Town and New York.
So far, the company has provided more than 7 100 students with over $328.5 million in funding and expects to lend to 20 000 customers by the end of next year.
Like it or not, it does appear this trend towards global diversification is here to stay.
It would be unwise to discount the role of infrastructure in enabling the muchlauded mobile-related progress
Andile Masuku is a broadcaster and entrepreneur based in Johannesburg, South Africa. He is executive producer at AfricanTechRoundup.com. Follow him on Twitter @MasukuAndile and The African Tech Round-up @africanroundup
HIGH LEVEL: Nigerian businessman and Africa’s richest man Aliko Dangote leaves the Elysee Presidential Palace following a meeting between the French president and French and African businessmen in Paris.