Putting ‘Africa ris­ing’ un­der the mi­cro­scope

Finweek English Edition - - IN BRIEF -

We al l hear so much a bout t he ‘ Afr i c a ris­ing’ nar­ra­tive and the grow­ing mid­dle class of coun­tries like Nige­ria that have fast-in­creas­ing and young pop­u­la­tions. They like stuff! They need stuff! In­vest in the stuff they want to buy and make mil­lions! The grow­ing mid­dle class will drive higher con­sump­tion of ev­ery­thing from pet food to white goods, so the story goes.

Up to a point, it’s true: if you’re the owner of a stake in a com­pany that has a fried chicken fran­chise in La­gos, I am sure you won’t ar­gue too much. And from the queues this week at the counter of Abuja’s new and only Domino’s Pizza on its f irst day of trad­ing, any trav­el­ling busi­ness per­son would have had rea­son to go back to Lon­don or New York con­fi­dent that ‘Africa ris­ing’ is def­i­nitely hap­pen­ing and the mid­dle class is ab­so­lutely grow­ing.

But Africa ris­ing de­mands con­stant in­ter­ro­ga­tion. Firstly, it’s never as sim­ple as ‘peo­ple + things = a re­turn on your in­vest­ment’, yet that’s so of­ten the case made by the ped­dlers of the the­sis. Just ask Nestlé. One of its se­nior ex­ec­u­tives told the Fi­nan­cial Times in June that the com­pany was cut­ting its work­force in 21 African coun­tries be­cause it had over­es­ti­mated the growth of the mid­dle class.

Se­condly, fo­cus­ing on what peo­ple are us­ing and buy­ing (in Nige­ria’s case largely from out­side its borders) can over­shadow what they are them­selves work­ing on in be­tween us­ing their wash­ing ma­chines or hav­ing din­ner at Domino’s.

I have spent some time re­cently re­search­ing tech and so­cial en­ter­prise en­trepreneurs, mainly those based in La­gos’s Yaba dis­trict, which is fast be­com­ing the megac­ity’s more mod­est but equally am­bi­tious an­swer to Sil­i­con Val­ley. Granted that it doesn’t look like much at the mo­ment and it faces daily chal­lenges that would drive any San Fran­cis­can mad, but this is where it’s at in terms of ex­cit­ing, in­no­va­tive in­vest­ment in Nige­ria.

Here you’ l l f i nd young peo­ple build­ing apps that do ev­ery­thing from pro­mot­ing ride-shar­ing to en­cour­ag­ing the cel­e­bra­tion of Nige­ria’s rich cul­ture. Then there’s BudgIT, which is help­ing Nige­ri­ans un­der­stand how their money is spent by the gov­ern­ment; no one would ar­gue that’s a ser­vice that wasn’t needed.

In­vest­ment in start-ups like these may need more at­ten­tion and care from the in­vestor than if you just chucked a bun­dle of cash at an in­dus­try sec­tor you reckon Nige­ri­ans might like, but it’s also a more in­ter­est­ing way to in­vest. It’s one that ben­e­fits not just you and fried chicken de­mand, but also Nige­ri­ans in parts of so­ci­ety other than the much­vaunted mid­dle class. A scheme that pro­motes r ub­bish col­lec­tion – see We­cy­clers for de­tails – is a scheme that ben­e­fits the health and hy­giene of Lagosians as much as it ben­e­fits stake­hold­ers.

So yes, Africa is ris­ing and yes, Nige­ri­ans do seem to like pizza, but ask your­self whether that’s re­ally the best, the bright­est and the most ben­e­fi­cial way you could be in­vest­ing in the trend. Per­haps in­stead of what Nige­ria con­sumes, it’s time more of us started look­ing at what young peo­ple in Nige­ria are work­ing so hard to pro­duce.

Nige­ri­ans are seen at the ‘Com­puter Vil­lage’, the bazaar where elec­tronic prod­ucts such as mo­bile phones, com­puter hard­ware and ac­ces­sories are sold, in the Ikeja sub­urb of La­gos, Nige­ria ear­lier this year. This ‘Com­puter vil­lage’, which is one of Africa’s big­gest com­puter mar­kets, at­tracts lo­cals and for­eign tourists from as far afield as Ghana, Sene­gal and the Congo.

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