One of the big trends to watch, which was evident at Intel Capital’s Global Summit, is African growth fuelled by the mobile revolution.
Marcin Hejka, Intel Capital managing director for eastern Europe, the Middle East and Africa, said in an interview ahead of the summit: “The situation can be compared to eastern Europe roughly 15 years ago, shortly after the Russia crisis. Leading African countries like Nigeria and Kenya are roughly comparable in gross domestic product per capita to eastern Europe 15 years ago. We are going to see tremendous growth in the technology ecosystem across Africa.”
This potential is resulting in a more hopeful vision among official sources about the future of the continent.
The United Nation’s Economic Commission for Africa said in a report this year: “African countries have a real opportunity to capitalise on their resource endowments and high international commodity prices, as well as on opportunities from changes in the global economy to promote economic transformation through commoditybased industrialisation and to address poverty, inequality and unemployment.
“If grasped, these opportunities will help Africa promote competitiveness, reduce its dependence on primary commodity exports and associated vulnerability to shocks, and emerge as a new global growth pole.”
Intel is clearly placing a big emphasis on Africa, as the world’s second most populous continent begins to develop the potential to be the next exciting business destination.
It gave the stage to Masai Ujiri, the Nigerian-born general manager of basketball team Toronto Raptors and director of the US-based National Basketball Association’s Basketball Without Borders Africa programme, who told summit delegates: “The next frontier is Africa in every form of business.”
Intel Capital also hosted an interview with Ashish Thakkar, a Uganda-born entrepreneur and founder of Mara Group, a pan-African business headquartered in the United Arab Emirates, and the Mara Foundation, which promotes emerging African entrepreneurs, who said: “Now is the African Lion’s turn,” comparing it with the emergence of the Indian tiger and Chinese dragon economies.
Intel Capital’s Hejka explained why the continent was so promising from an investment perspective. “I am spending quite a lot of time in Aftica this year,” he said.
“The region offers huge growth potential on basic metrics for the usage of technology. First of all, almost everyone has a phone, yet the broadband ecosystem in Africa until a couple of years ago did not exist. Yet in the past two to three years everything has changed.”
Hejka pointed to advances in undersea cables providing internet access to the continent as a major reason for this change.
He added: “I am pretty confident a substantial technology ecosystem will develop. I am uncertain how fast this will be in the next quarter, but any investor who wants to wait until the moment evidence is available will be too late. We want to invest now.”
Others are also looking to Africa. IBM Venture Capital’s Claudia Fan Munce said she had been excited by the “shifting paradigm” in Africa, illustrated by the rapid uptake of mobile phones.
MTN Group, a South Africa-based telecoms group and the largest mobile operator on the continent, this year made a big push into venturing, becoming a cornerstone investor in the Amadeus IV Digital Prosperity Fund, which is the latest fund raised by venture capital firm Amadeus Capital Partners, taking it to a $75m first close.
Such early corporate venturing interest could snowball soon if Hejka is right. Keep your eyes peeled for the emergence of an African boom. The continent could soon be a big investment story if the prestigious corporate investors betting on this are right.