The U.S. hosted the first Global Entrepreneurship Summit in Washington, D.C. in 2010. This past weekend, President Barack Obama attended the sixth annual gathering of entrepreneurs large and small, business leaders, mentors, and high-level government officials in Nairobi, Kenya, an event that not only underscores the importance of entrepreneurship globally, but the increased importance of Africa as a hub for new and exciting business ventures.
As an investment destination, Africa has been gaining greater prominence over the past years. Heavyweights like China and Japan have invested large amounts of FDI across the continent, and within African countries themselves, many changes are afoot that are helping, said Larry Seruma, managing principal of New York-based Nile Capital Management, to develop more formal business sectors and create an environment that will allow ventures both large and small to prosper and grow. Here are a few key points for investors looking at Africa:
Kenya: Leading Technology Ventures
That the Global Entrepreneurship Summit should have taken place in Kenya is apt because Kenya has a vibrant business sector.
In Kenya, local entrepreneurship continues to grow and the technology sector is one where Seruma believes there’s more growth to come. The Kenyan tech sector hinges on the important notion of addressing the needs of a large and rural consumer base, he said, and no venture illustrates this better than M-PESA, a mobile-phone based money transfer and micro financing service launched in 2007. The highly successful company has been moving forward with mobile banking, Seruma said, and the concept of mobile payments has also taken root in neighboring countries like Uganda, where there are ventures underway. Technology plays a part in other areas such as healthcare and tourism (Kenya generates 30% of its revenues from tourism) and it’s also made it much easier for overseas investors to be involved in local business initiatives, Seruma said.
Ethiopia: From Garments to Infrastructure, and a Possible Stock Market
Ethiopia, a country that President Obama will also visit while in Africa, has been the beneficiary of a great deal of investment coming from China, the U.S. and several European nations.
The garment business there is booming, Seruma said, and “the Chinese are using Ethiopia as a hub for shoe manufacturing.” Things are also happening in the infrastructure space and Ethiopia is embarking on a $4 billion hydro dam project that would eventually export electricity to other East African nations, he said.