This tweet exposed the work Axios has to do to improve the diversity of its news room. It was jarring to see how few people of color the startup had working there at the time. Alexi McCammond, one of their top reporters, wasn’t in the shot, but that’s not much help.
If you click into the tweet, you’ll see folks going in on the lack of diversity at the startup. So, I was glad to see Axios partner with Howard to host one of their excellent Axios360 events. They recently hired a black journalist and I look forward to them making a concerted effort to adding more underrepresented journalists – of which I imagine this event is part of the strategy.
Building a newsroom is one of the things I’m most excited about in building CultureBanx. It’s been fantastic having Kori on board and I’ve got my eye on some other really talented business journalists. If we can execute on the vision for this thing, I’ll be able to recruit one of the most special news rooms out there.
When Aubrey Hruby and finance ministers from several African countries waited for the globe at Google headquarters to rotate to the African continent so that they could see how many hits the continent was getting at the time, they were stunned to see just a couple dots compared to completely outlined countries for the rest of the world.
That story from some years ago was just one of the interesting stories Aubrey and Jake Bright shared during their DC launch of their first book, The Next Africa. Since that time, Google hits for terms like “Africa and tech” are up 1000 percent, according to Aubrey. Goes to show how things are changing in terms of the conversation around Africa.
I’m a big fan of Aubrey and Jake, and was thrilled when Aubrey first mentioned that she was working on a book covering business investment in Africa. Their book focuses on the growth the continent is experiencing with a careful eye to some of the risks that could jeopardize this growth.
I love their approach of talking to folks doing interesting things on the continent. Data points have been thrown around for some time now. Seven of the ten fastest growing economies globally. Average five percent GDP growth. $880 billion potential agriculture productivity. The list goes on. Who are the people driving this growth? What is on their mind? What drives them? I think Aubrey and Jake get at this.
With the hundreds of interviews Aubrey and Jake did for this book, we are still just scratching the surface on really interesting people and companies that are killing it across the continent right under everyone’s nose. I look forward to seeing 100 books coming out over the next several years covering various nuances of the business environment across the African continent. At least one other book comes to mind that does a nice job teasing out stories from business leaders across the continent: Success in Africa by Jonathan Berman.
What are some other books that are telling interesting stories about Africa’s growth? Help me grow my backlog of books to read and leave the titles in the comments.
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.
Is the right next step for promoting American business investment in African markets a tax credit that encourage American companies to repatriate their investments on the continent? The Africa Report ran an interview in November with Rosa Whitaker, head of the Whitaker Group. She argues that this tax credit is the right investment response for US-Africa business policy. Initially, I thought this was a great idea, and then questions started coming up. I’ll lay them out here, will do my homework over the next few days and come back with another post and hopefully, a few answers.
The US’ international corporate tax law has gained increased attention with the likes of Burger King moving their headquarters to Canada in order to benefit from a more favorable corporate tax structure. Currently, multinationals pay taxes to the country in which they operate, and also pay taxes to the US. Companies like Apple go to great lengths to avoid paying these taxes while remaining within the law. President Obama took executive action to counter inversions like that implemented by Burger King, and has talked about ways to encourage companies like Apple to bring their profits back to the US. Ms. Whitaker’s argument for a tax credit for US company investments in African markets fits within this debate.
A tax credit could be an attractive investment incentive for American companies, but what could be the impact on African countries? A number of African countries with the support of the African Development Bank are working to improve their ability to negotiate deals with multinationals. Furthermore, African countries are under pressure to not become tax havens, though the appeal of multinationals parking hundreds of millions of dollars in the country is tough to say no to.
I would be interested to see available data on tax compliance among US companies operating in African countries. I wonder if Morten Jerven has any of that in his book on Africa’s data problem. During the U.S.-Africa Leaders Summit, Mo Ibrahim pointedly called out companies doing business on the continent for not paying their taxes. The rise of the big private equity firms – KKR, Blackstone, and Carlyle – has brought questions about how much of the returns from their investments will remain on the continent once an attractive exit opportunity presents itself.
What alternatives are there to a tax credit? Who are the smartest people on this topic? I look forward to working on these questions and getting my observations out in a post a little later on.
Entrepreneurs across the African continent are developing highly innovative technologies that are meeting real needs and improving the ease of life for people from all walks of life. At this year’s MIT Venture Capital (VC) Conference, I sat in on a panel that covered Brazil’s VC space. Two things struck me as very different from how entrepreneurship is developing on the African continent and present a case for investors to pay more attention to entrepreneurship in Africa.
I was surprised to learn that Brazil’s entrepreneurs are more active in meeting the needs of the middle class by providing some of the technologies already available in the US like Groupon copycat, Peixe Urbano. In a year and a half, the company has expanded from Brazil to Argentina, Chile, and Mexico. Another Brazilian company, Vostu, is locked in lawsuits with Zynga which is arguing that the company is committing copyright infringement of its games including Farmville, a Facebook favorite.
In Africa, we are not seeing a lot of “copycat” or “geographic innovation” technologies as one of the panelists preferred to call them. We are seeing technologies like Paga in Nigeria that enables mobile bankers to use any bank they choose. We see Sproxil, a company that has developed technology which uses text messaging to confirm that the drugs you are taking are not counterfeit. These creative innovations are exciting developments and ones that increase the fundability of entrepreneurs across the continent from investors both inside and outside the Africa
The second observation that struck me was the presence of VCs encouraging entrepreneurs to try new things in bringing various technologies to Brazil – providing entrepreneurs with mentorship that can help them increase their success rates in the country. Earlier this year, Ndubuisi Ekekwe, an entrepreneur and scholar wrote a nice article on African entrepreneurs’ need for nurturing. Mentoring fell under this bucket. As entrepreneurs learn from the mistakes of their mentors to avoid those same pitfalls, stronger products enter the market. I am extremely happy for Tayo Oviosu, CEO of Paga and the access he has to a mentor like Tim Draper. I think we will see more mentorship as time elapses but the involvement of Brazil VCs in the growth of their companies bolstered my understanding of the importance of mentoring.
Two takeaways came from the panel – the African entrepreneurial market is more disruptive than the current Brazilian entrepreneurial market, while more African entrepreneurs are going it alone as Brazilian entrepreneurs more readily have access to mentorship. Both are interesting phenomena and ones whose evolution I look forward to tracking over the next few years as I believe the presence of venture capitalists and mentors will grow rapidly over the next two or three years.
The following are recent CNBC Africa conversations on entrepreneurship in South Africa and Africa as a whole:
While reading an article on David Cameron’s visit to Africa, I just couldn’t help but see an image of British ships exploring the new world, landing on the African continent and thinking – “we’ve got free labor”.
The author follows Prime Minister Cameron on his trip to South Africa and Nigeria, highlighted by the fact that the Prime Minister brought with him the heads of several heavy hitters already doing business on the African continent – Vodacom, Barclays, and Diageo to name a few. Mr. Cameron’s theme throughout the trip was that Britain sees Africa in a new light – a trading partner, not just an aid recipient. Business leaders touted the economic opportunities on the continent, and expressed their wishlists of improved regulations to enable business to thrive.
The African continent’s countries are really making moves in growing their economies and improving governance. Those improvements are drawing increasing attention from Asia and the West, and it is increasingly important that African countries protect their interests. My recent trip to Uganda revealed the downside of China’s investment on the continent – socks that had holes after a week of wear. Again, it is increasingly important that African countries protect their interests.
Those of us in the Diaspora have an incredible opportunity to seize in serving our countries. Tons of us have studied the way the Asian, European, and American players work the markets, run governments, etc. We can work with Africans on the continent in serving as gatekeepers to ensure that non-African penetration of African countries is healthy.
I look forward to working with you in some fashion. I’m sitting here with goosebumps as I watch childhood daydreams morph into reality.