In­fra­struc­ture is not glitzy but in­vest­ment is nec­es­sary

Dan­gote avoids fancy tech in­vest­ments but he still lays a ground­work

African Independent - - BUSINESS - ANDILE MA­SUKU

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 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.

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