Africa has proven to be an attractive spot for investment because of the numerous challenges faced by Africans in each nation. However, some companies that should attract these investments seem incapable.
The Managing Director of Melsons Group, Satesh Melwani, explained at the Digital Nigeria Conference 2022 that leadership, access to tech infrastructure, legalities, and mentorship are some of the challenges these businesses face.
Q2 stats of investment in Africa is down by 53%, Melwani said. Apart from Africa, the world at large is going through a hard time with inflation increasing, firms laying off staff, and investors finding the best exit from their investments.
This hard time has hit us due to the effects of cheap money, excess liquidity, and COVID, the MD shared. Hence, the reality of the true value of our decisions and ideas stares us in the face.
While this situation presents an opportunity to invest in Africa, the speaker said that investors are scared to invest in local economies like Africa because of dollarization. However, he gave some recommendations that can help attract investors to Africa.
Population is power
One of the solutions Satesh shared was that investors could decide to borrow locally to reduce the negative impact of foreign currencies like the dollar on their investments. He also highlighted that investors could focus on solutions that truly affect the people who live in Africa, like electricity and education.
Government should provide incentives and regulations that will make a nation like Nigeria attractive to investors, Satesh stated. It will create a win-win scenario for both parties. Thanks to the Startup Bill, Satesh added.
Talent retention and corporate governance are two other elements he mentioned as tools to attract investment into Nigeria and Africa at large. Instead of losing your talent to global and local competitors, Satech recommended that start-ups consider sharing equity with talents as a strategy for retention.
The entrepreneur explained that the population of Africa is powerful and will be significant in driving the available global workforce in the coming future.