Did You Know Investment is better for Africa then Charity?

Africa is synonymous around the world as a continent that is struggling with poverty, security concerns, and health emergencies (whether diseases like malaria and ebola, or droughts). Even before the Live Aid fundraising event for drought ridden Ethiopia in the 1980’s there were many events, and charities asking for people to donate money for causes in Africa. Whether to assist in malaria prevention and cure, to build schools and other important infrastructure, or help more children get an education, charities, and big TV telethon events have been allocating funds across the African continent for a huge variety of projects. Add to this the foreign aid pledged by governments, there is a huge amount of aid reaching the African continent each year. (In 2013 over $55 billion were given to Africa in aid alone)

But is this an effective way of using these funds? Some would say that developmentally, little has changed, at least not proportionally to the funds flying into the continent. Whether that is because of corruption, mismanagement of funds or bad leadership, it is hard to say, but in certain instances it is clear to see that little has changed. I have been going to the same village in Ghana for 15 years, and even though there has been substantial investment in school infrastructure in the village, the fortunes of the village are much the same, with subsistence farming as the major employer. Having said that, the water supply to the village has made a tremendous difference, with water no longer having to be fetched from kilometres away from rivers.

It is wonderful that so many people give to charity out of pure care for others that are worse off than themselves, but is it the right way to do it. Recently, there have been a lot of websites that enable individuals to loan money to people for their small businesses. This “charity” goes directly to individuals that need it to develop their businesses, who then pay the money back of a period of time. It can then be put back into another individual or business. Websites such as Zidisha are helping both those that want to give money as charity, and also those that need investment into their small businesses. Win Win.

It is not only these small investments that are important for the African continent. As you would have hopefully seen throughout this blog, Africa is innately innovative. People across the continent have had to create solutions for a plethora of problems that simply do not, and in some cases never have, existed outside of Africa. With the continent’s ability to leapfrog to the most up to date technologies (eg 5G is soon coming to South Africa) and with the most youthful population in the world, it is well placed for a technology boom. In fact, some would say it has already started, with African mobile money  leading the world, and the Uber model finding its way creatively into many different industries, from food delivery or emergency health care to the job market. Mobile solutions and crowdfunding models are also encouraging for a market open to new things.

And this is where we come back to aid and charity. Certainly in many circumstances it is necessary, but the massive marketing machine that is necessary to receive pledges of donations is counter productive. The negative images and stories, which persist throughout the media and online only succeed to make the continent look like a very uncertain bet for potential investors.

Despite this, there are a number of companies and individuals who are betting, and betting big, on Africa. Tech giants Microsoft are investing heavily in Africa. Their initiative 4Afrika is developing affordable access, skills and innovation across Africa, bringing over 500,000 SMEs online, training over 800,000 Africans and helping nearly 100 local start-ups grow and develop their businesses. Of course, Microsoft will benefit from this investment, with a skilled labour force to tap into, and a market for their products. But, their investment also enables people across Africa to develop their lives.

Whilst tech is the “sexy” African industry to invest in at the moment, it is not the only sector that external investors are interested in. Big firms like Syngenta, the Swiss global agribusiness that produces agrochemicals and seeds, are investing heavily in the agricultural sector across Africa. Again, this investment is of course made partly for their own gains, but they have recognised that agricultural development is vital for the continued development of the continent.

Just because it is agriculturally based, doesn’t mean it isn’t tech oriented. They use innovative solutions to maximise yields, enhancing quality and limiting post harvest losses. Their new seeds, some of which are potentially drought resistant, and contemporary techniques, are driving forward a sector that is in desperate need. From the agricultural tech that has appeared throughout Inventive Africa, it is clear to see that it is an industry with huge potential and extensive creativity. This is a positive sign. Africa needs to rely less on food imports from oversees, and can only do this with a big boost to the agricultural sector.

These are not the only big organisations to be investing heavily in Africa. IBM, Facebook, Google and many more also see the potential and are trying to take advantage of it. And, it is not just the huge companies that see the potential of Africa. Philanthropic individuals with entrepreneurial spirit also see the potential of investing their time, effort and capital into the exciting African domain. One such example, Jean-Claude Bastos de Morais, a Swiss Angolan whose investments have featured on a number of occasions here. Bastos is passionate about making a change in Africa and has done so by setting up the African Innovation Foundation, and in turn the Innovation Prize for Africa, one of the most exciting platforms for African innovation. So many of the innovations that feature in the IPA become successful, in part through the support of Bastos and the AIF. With offices in various locations across the continent, they help to shape innovation across the continent and enable people to grow.

There also other major investments that are being made by the entrepreneur, including into a major port in Angola, one which will give great potential to Angola’s import export sector,  a tech hub/maker space called the soap factory in the heart of a slum in Luanda, an African Law library, and ZuaHub, a portal for African Innovators with a great idea!. It is these kind of investments that develop entire communities, create a huge amount of jobs, and boost economies by diversifying them away from a reliance on mineral wealth.

Africa needs these enthusiastic businesses and individuals who have the means to invest, passion and trust in the continent. In the case of Mr Bastos de Morais, it is wonderful to see someone with African heritage putting back into his country and continent as a whole. It is these success stories that need to be spread through the media, proving to the world that Africa is an economic environment for lucrative environment. The continent doesn’t need hand outs, it needs capacity building, technical support and sound business investment.

We would love to hear your thoughts on charity, aid and investment in Africa and what you believe to the most beneficial for the continent. Please get in contact!

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