Africa provides incredible investment opportunity however there are significant challenges that investors and businesses on the continent have to grapple with. From June 13 – 16, the Hub participated in the 11th Corporate Council on Africa (CCA) U.S.-Africa Business Summit in Washington, DC to discuss the challenges of doing business in Africa and to proffer actionable solutions for seizing opportunities.
The Hub’s Investment Director participated in a women in business panel discussion focusing on the importance of capital, venture support and the role of blended finance in supporting female owned businesses. Rahama Wright, Founder and CEO, Shea Yeleen Health and Beauty, LLC a social enterprise that sources raw Shea from Ghanian village women one of the panelists described her start-up journey and the key requirements that she had to fulfill to successfully raise her first round of funding and was able to access private equity investment in her third year of operation. Other panelists included Karen Henken, Vice President, Business Development at Kountable, Inc; Selena Cuffe, Co-Founder, President and CEO of Heritage Link Brands; Nena Stoiljkovic, Vice President Blended Finance & Partnerships International Finance Corporation.
According to a report by the International Finance Corporation, women-owned businesses require about $300 billion in financing. However, 70% of women-owned SMEs, can’t access appropriate funding and even when this is available, capital cost is an impediment. The panelists discussed how this gap can be bridged to provide access to non-prohibitive rates to women-owned SMEs, ensure sustainability, expand their businesses and grow the economy. The Hub’s Investment Director discussed about our work with Open Capital Advisors in identifying and supporting 15 high-potential, export-focused businesses with the goal of raising $8 million in capital and enabling long-term growth over a 2 year period.
The Hub also held an investment facilitation meeting on the sidelines of the CCA Forum that brought together speakers from the International Finance Cooperation, Millennium Challenge Corporation, South Africa Trade and Investment Hub and Cross Boundary LLC. The meeting was attended by more than 35 private sector representatives, Cooperate Council on Africa Officials, Senior Government officials and investment promotion agencies.
Key highlights from the side event included:
- The role of investment facilitation intermediaries in supporting development finance institutions to mitigate their risks in analyzing and funding projects was discussed. One of the Hub debt deals for a large textile manufacturer in Madagascar was highlighted as an example of a deal where the Hub's work on deal preparation with the company accelerated the IFC process considerably and saved both time and costs for the company and the funders.
- The role of investment intermediaries in reducing the risks for portfolio investors in Sub-Saharan Africa was discussed. In addition, the Hub's work on investment facilitation was discussed and our role in 'supporting the deal to reach the finish line was highlighted. There is a significant interest in this work and questions were raised on transaction lead times and specifics on the venture support given to investees in east and southern Africa to increase their investment attractiveness.
- The role of government as an intermediary for attracting investment was discussed, and Kenya's Cabinet Secretary, Information Technology and Communications Mr. Joseph Mucheru discussed his views on the role government plays in encouraging innovation as well as creating an enabling environment to attract and maintain new investment.
Since May 2015, the Hub has offered transaction support services to attract and accelerate U.S./EAC investment and technology adoption. To date, the Hub has successfully facilitated $51.1 million worth of investment transactions for eight firms in the mobile technology, financial services, logistics, dairy, and poultry sectors.
The Hub has a goal of facilitating $100 Million in investments and creating 10,000 jobs by 2019. The Hub’s investment component works in four priority sectors: ICT, agribusiness, financial services, and cotton, textile and apparel, within the EAC, Ethiopia, and Madagascar.