Africa needs to act on investors’ concerns
Foreign investment and/or partnership is inherently a tale of two countries. Usually, one is focused on physical development and the other is motivated by financial yield. Balancing these two forces is a formidable challenge. The intricacies of this relationship may never be fully understood. In fact, the historical contexts, distributions or power, and expectations for both parties could be debated for years. Still, in the 21st century, a successful business venture needs two willing partners.
Unfortunately, in the realm of investment in African ICT, Africans have a lot on their plates. Not only do businesses and leaders have to worry about stability and progress in their own countries, but they additionally have to worry about the wary eye of foreigners. The problem here is that foreign investors have fewer long-term losses at stake in the partnership; most investors diversify their spending and have established governments. Plus, investors often have tried-and-true laws that will prevent major financial catastrophe. For better or worse, Africa has less of a safety net. As a result, Africa must cater to the investor slightly more often than not. Essentially, it’s all a matter of earning and maintaining trust. Mutual faith must exist in order to survive the somewhat uncharted journey of technological process.
However, Africa need not be trampled by foreign bankers or businesses. Instead, Africa’s “give” should be one that proactively addresses the fears of investors. If these fears are controlled early in the process, then both parties will have a stronger sense of trust and commitment. The result will be more efficient and sustainable progress.
It is known that China, India, and much of the Middle East are more aggressive investors than Europe or the Americas. However, Chinese and Middle Eastern business practices are sometimes criticized for being overbearing. Safety lies in tapping into investments from Western nations, but here it takes additional effort to convince investors to lend a hand. As a common ground, therefore, Africa should want an array of investors, just as the investors diversify their portfolios to limit potential loss. If Chinese or Indian money is available, then go for it, but be sure to add some Western funds into the mix.
What, then, are typical fears expressed by Westerners?
- political instability
- inadequate long-term capital
- unpredictable policy/regulatory environment
- difficulty in repatriating capital
- small-disaggregated markets
- non-liquid capital markets
- difficulties in finding trustworthy partners
- inadequate knowledge of the continent
- shortage of skills
- foreign currency risks