How African Diaspora can seize investment opportunities back home
By: JULIUS BIZIMUNGU
- PUBLISHED: November 21, 2017
L-R: Wilson, Bokrezion and Haile during the interview in Kigali on Friday.
For many people, especially the youth, Africa is a zone of ‘economic misery’. It is because of such mindset that many young people leave their countries and brave dangers in the North Africa desert and on the high seas in search of green pastures in countries branded as ‘lands of opportunity’. Experts say that Africa’s rapidly growing working-age population complicates a precarious labour market characterised by poor quality employment, which creates the urge among the youth to seek ‘better’ opportunities elsewhere.
Bokrezion at Chic Mall in Kigali after the interview. / Stephen Nuwagira
Dr Harnet Bokrezion, a business coach and consultant at UK-based firm, Jumpstart Africa, says attracting the continent’s Diaspora to invest in Africa would do a lot to help create new jobs and support Africa’s development initiatives.
Bokrezion is also the Africa market entry strategist at Africa Jumpstart, which helps and guides African Diaspora to invest on the continent.
“I worked with global development agencies in many African countries, but realised that the models they use are not right when it comes to supporting African entrepreneurs,” she says.
“The Africa rising narrative, which I think should be about Africa investing in Africa is what should be embraced.”
With 54 markets in Africa, Bokrezion, an Eritrean native, believes that the continent has so much potential. “It’s high time to shift focus from depending too much on international aid to helping Africans invest in their own continent and spur growth and job-creation,” she says.
Bokrezion, who last week led a delegation of about 10 African Diaspora seeking investment opportunities in Rwanda, was speaking in an interview with Business Times in Kigali on Friday.
World Bank estimates that the African continent has over 30 million people in the Diaspora. Of all the world’s regions, however, Africa’s predominant migration is the most intraregional.
Glenn Wilson, a cyber security expert based in the US and one of the Diaspora investors, sees this population presents Africa huge opportunities. He, however, adds that capacity building is key to exploit this potential to benefit the continent, and also calls for a “paradigm shift” in the way people look and do business if Africa is to realise its development goals.
“Many Diaspora people are willing to invest in their countries, but the majority make mistakes. From the technology perspective, there is a need to design customised solutions when introducing new ideas, especially from the Information and communication technology (ICT) sector perspective,” says the entrepreneur who is specialising in IT security training in the East African region.
He notes that there are many opportunities across sectors, including ICT, which the Diaspora investors can tap into and build thriving enterprises. “For instance, there is a huge need for cyber security expertise in African countries as they rapidly adopt latest technologies. Diaspora people have such expertise,” he notes.
For local exporters and Diaspora interested in export businesses, Gabrion Holmes from US and an export sector player, partnerships are key to understanding and penetrating new markets. This would help Diaspora business people build sustainable businesses back home because of those key linkages in the importing countries.
“The reason why we came to Rwanda is to be able to understand the local market, but also make partnerships. For Diaspora to have sustainable businesses, it is essential for them to create partnerships with people back home,” he says.
“We have visited several different industries and have seen that investment opportunities are vast in areas like ICT, agri-business, exports, horticulture, and construction,” he adds.
Martha Birungi (with back to camera), an agro-entrepreneur in Nyagatare, is a former UK resident. She earns over Rwf18 million per annum from growing maize and beans on a commercial basis. / File
Canada-based export sector player, Samuel Haile, says Diaspora can play a bigger role in connecting their countries to new markets, saying they understand better the markets where they stay. This way, Africa’s trade with the rest of the world will eventually increase and become sustainable and competitive.
“The Diaspora should play a critical role in helping African products penetrate markets in the United States, Europe and other countries as they already understand the market situations in those countries.”
He adds that a lot of people in Europe want to buy African products, but don’t know much about these products. So, the Diaspora can create awareness and help African products to access these markets,” he explains.
Mistakes Diaspora make when investing home
Louise Antoine Muhire, a Rwandan and owner of Mergims, says that many Africans living abroad lack the right information about their countries’ situations. Mergims is a local technology start-up that connects Diaspora people to their African counterparts by enabling them to pay for utilities, among other expenses.
“The biggest challenge that I have personally experienced is lack of information. It took me almost 10 years to understand where Rwanda was going. I was trying to go beyond what the traditional media was telling us in Canada where I was staying by then,” Muhire notes.
“We used to hear that it takes less than six hours to open a business in Rwanda, and many other innovative things that the country was doing, and thought it was political propaganda. Most of the Rwanda Diaspora had left that the country when it was totally destroyed, it was hard to understand how it would achieve that in short period,” he adds.
He challenges the Diaspora to go beyond what ‘big media’ say.
The businessman and former police intelligence agent in Canada reveals that the majority of Africans living abroad do not have the spirit of doing business, despite some of them working with big private firms.
Muhire added that some African Diaspora who decide to come to invest in Africa lack business skills.
“Their enterprises, therefore, collapse after a few months or years because they made uninformed decisions. Many others barely make a profit,” he says.
Muhire says Diaspora should look at Africa as a continent of opportunities despite the many challenges. “They should look at these challenges as business opportunities,” he notes.
The tech entrepreneur says Africa has also made significant gains in terms of political stability, “and the rest of challenges are actually opportunities, which should be exploited to benefit the continent”.
According to Bokrezion, many Diaspora businesses fail because many of the owners make “emotional decisions, while others do ‘copy and paste’ without studying the market and its dynamics or sectors where they could have a competitive edge. Many more have wrong assumptions about Africa as a market and investment destination”.
“These are some of the biggest mistakes done by several African Diaspora who are planning to invest on the continent. That’s why Diaspora, including Rwandans abroad, must have right business models that align with their circumstances, as well as carry out research to make informed decisions,” she says.
Starting small a winner
The entrepreneurship coach says, for the Diaspora investors to succeed in doing business in Africa, it is always important and advisable to start small than investing millions of money into a venture for it to collapse within a year or even months due to various factors.
“Starting small does not mean you are poor or foolish; it means you are smart because you can grow according to market dynamics which you do not know when you are starting out as a person from outside. Starting small is a risk mitigation strategy. It’s being business smart,” Bokrezion notes.
She says that starting small gives an entrepreneur time and opportunity to ‘learn on the job’ and understand market dynamics and trends that will enable them to build a strong and sustainable enterprise.
The consultant also believes that it is through entrepreneurship that Africa will be able to change the global narrative about the continent. She says many people across the world associate Africa with poverty, disease, genocide and corruption, among others.
However, all these could change if Africa (supported by its Diaspora) embarks on entrepreneurship and encourages its peoples to innovate and create new products or add value to local produce.
Such initiatives will create jobs and help improve people’s lives as well as spur growth on the continent. She adds that countries like Rwanda were slowly changing their narratives thanks to innovation, entrepreneurial spirit and resilience.
Special incentives for Diaspora investors
There has been a debate whether there is a need for African countries to put in place special incentives to lure more Diaspora investments in Africa. Some of Diaspora people are dynamic investors, others are not, Muhire says.
“It would, therefore, not be the right choice to favour a certain group of people and leave out the other investors in country.
“What could attract more Africans living abroad to invest in Africa is not incentives, but creating more awareness about the continent’s immense opportunities that they can exploit to contribute the continent’s development efforts and create more jobs,” he notes.