How Does Africa’s Innovation Economy Tap Into Africa’s Wealth?

Yesterday, I had lunch with a friend who is raising a fund for her Lagos-based startup. At one point in our conversation, she shared the effort she has had to go through to get people she has met with in Silicon Valley up to speed on what is happening in Nigeria’s tech space.

This has been a refrain from a number of entrepreneurs and investors who are already tuned in on what is happening in Africa’s innovation economy. Fortunately, the tide seems to be trending towards Silicon Valley getting more hip to what is happening in Nigeria, Kenya, and to a lesser extent South Africa (Cape Town-based Naspers has led some massive investments that I am sure Silicon Valley investors have noticed.)

While we chatted, my mind went to some research I saw this weekend on Africa’s high net worth individuals. Capgemini’s annual World Wealth Report pegs the wealth of the 150,000 high net worth individuals across Africa at $1.4 trillion for 2016. These are people who have at least $1 million in investable assets, excluding primary residence, collectibles, non-durable goods like sweet potato pie, and durable goods like automobiles.

This is serious capital. I wonder what percentage of this wealth has gone into Africa’s innovation economy since 2009. The Capgemini report highlights three industries that are going to drive wealth accumulation globally through 2025 – financial services, technology, and healthcare. There are startups across Africa doing interesting things in all three of these areas, yet the challenges of getting Africa’s wealthy to invest in the continent’s startups has been a conversation for several years now. I think we’re trending to those conversations being fewer and fewer.

There are several people working to build a critical mass of wealthy investors across Africa committed to investing in Africa’s innovation economy, and these initiatives are gaining real traction. Further, some African governments have developed initiatives to support innovation economies within their borders. Two years ago, I watched Something Ventured, and it really got me thinking about how African governments could level up their involvement in Africa’s innovation economy. I’ll share where I’m at on that at some point.

In the meantime, what is your assessment of Africa’s wealthy investing in Africa’s innovation economy?

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Kwame Som-Pimpong

My name is Kwame Som-Pimpong. This is my blog. You can email me at kwame (at) afaraglobal (dot) co.

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