African Banks: 1920 vs. 2018

I’m working through “Negro With a Hat: The Rise and Fall of Marcus Garvey,” and it’s fascinating to learn more about life in Jamaica during colonial times and Garvey’s experience trekking to Europe. While living in London, Garvey got a job at The African Times and Orient Reviewa paper published by Dusé Mohamed Ali. The paper carved out a reputation as unabashedly African nationalistic.

Ali was ambitious and launched a number of other initiatives outside of the paper. One of those in 1920 was an attempt to set up an independent bank in Ghana that would compete against European banks in West Africa. The venture wasn’t successful and got me thinking about Nigeria’s United Bank for Africa (UBA). This year, they got approval from Britain’s Prudential Regulation Authority to operate as a wholesale bank in Britain. The bank plans to use this approval facilitate trade finance deals in African markets. In 2018, UBA is the only African bank with this approval. That shouldn’t be the case and is a reminder of how much work there is still to do.

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?

Atlas Mara Still Trying to Gain Footing

Last year, I brought up Atlas Mara management getting dressed down in an investor conference call due to the lack of confidence the market had in the firm. Well, their Q1 2016 results can’t be too much more encouraging considering the $2M loss the bank posted.

Apparently, management plans to implement some cost reductions and new plans for generating revenue. We’ll see how that goes. One of the early questions about the firm was how much it was paying the management team. Will they take a pay cut?

Further, is the management team still based in Dubai? If so, perhaps they should consider making a move to the continent. Hanging around Jo’burg or Nairobi on a daily basis may strike up new observations for revenue opportunities.

Then again, I’m no expert on these things. I’ll be checking with some bankers to see what they think about Atlas Mara’s performance.

Anthony Scaramucci and Henry Blodget on Failure

For the righteous falls seven times and rises again, but the wicked stumble in times of adversity. Psalm 24:16

I discovered a new podcast earlier this week, Masters in Business, with Barry Ritholtz. Two of his recent interviews were with Anthony Scaramucci, head of Skybridge Capital, a hedge fund and host of the SALT Conference, probably the biggest conference for the hedge fund industry. I have found him to be fascinating for the past several years just because he seems to be everywhere – raising money for presidential candidates, running his firm, putting together this massive conference, hosting television shows. So, here was a great opportunity to learn more about the man. He talks a lot about failure in his interview with Ritholtz, beginning with getting fired from Goldman Sachs about 18 months after joining the firm.

Henry Blodget is co-founder and CEO of Businessinsider.com is wired into my finger tips. It is literally the first thing I type when I open my browser. Their coverage of business, technology, finance, and other news is fast and accessible, though I have been critical of their Africa coverage. Henry Blodget was formerly a star technology analyst on Wall Street. His claim to fame was making a predicting that Amazon’s one-year price target was $400. Amazon surpassed that not long after his call. During the tech bust, Blodget got caught up in an SEC investigation for civil securities fraud, coughing up a total of $4 million and accepting a lifetime ban from Wall Street. His conversation with Ritholtz covers his recovery from that failure.

Both Blodget and Scaramucci failed at various points in their careers. Both got up. Helpful stories to hear.