Investment interest in African countries other than South Africa is rising with technology providing a key to progress, financial experts said at the African Venture Capital Association (AVCA) Alpha conference in Cape Town yesterday (Wednesday).
Erika van der Merwe, chief executive of the South African Venture Capital and Private Equity Association, chaired the panel discussion on whether the South African model is replicable to the rest of Africa.
The panel discussed South Africa as a gateway to the investment progress of rest of the continent.
Speaking to HumanIPO after the panel, Van der Merwe said: “Technology is the way to leapfrog the backlog of development.”
Van der Merwe referred to the possibilities of combining telecoms and financial services, as well as technological acquisition by companies to roll out its own business model as examples of the role which technology can play in investment.
“Venture capital (VC) is underdeveloped in Africa – there are few of them and it is difficult to market the opportunities it can develop,” Van der Merwe told HumanIPO.
“Capital for VC funds is still an obstacle. Capital is still a major obstacle. What lies behind it is a true diversifying of the portfolio. Then you have diversified their risk.”
Although she pointed to South Africa as possessing a more supportive ecosystem, the possibility of other countries such as Nigeria to overtake in Africa is valid.
During the panel discussion the concern of losing South Africa as the main African invested country was raised, with the opinion of a “closed” perspective, according to Thierry Dalais, chairman of Metier, being a hurdle.
Van der Merwe feels this is due to the national policies such as tax which need to be developed further to enhance access.
“We welcome these developments and look forward to further incentives, tax and otherwise, being rolled out to encourage investors to allocate capital to this asset class,” she said.
Soula Proxenous, managing partner at International Housing Solutions, feels the solution lies in not seeing the other African countries as competitors, but rather celebrating them.
“It doesn’t matter if South Africa is a gateway,” Proxenous said.
Proxenous deals frequently with international investors, mostly from North America and Europe, who are interested in Africa and its increasing need for housing.
HumanIPO reported earlier this year on the corresponding perspective of Alexandra Fraser, chairperson of Silicon Cape, who pointed to a “closed mindset” of South Africans as an obstacle in the progress to a maturing venture capital landscape.
