Thursday, January 28, 2021

AVCA conference to leave positive impressions

Organisers of the forthcoming 7th African Venture Capital Association (AVCA) conference are living no stone unturned to ensure that the event leaves a lasting impression.

Senior officials from platinum sponsors of the event ÔÇô billed for the 16th to 18th of next month in Gaborone ÔÇô FMO and AVCA, jetted into the country last week to engage in a series of preparatory meetings with the hosts. The event is being co-hosted by Venture Partners Botswana (VPB) and the Botswana International Financial Services Centre (IFSC).

In an interview with The Sunday Standard, the Managing Director of
AVCA, John Mawuli Ababio, emphasized the importance of hosting the conference, saying that “this event is of a lot of importance to VPB, IFSC and Africa in general”.

For the IFSC and VPB, he said, the event is timely in view of the fact that both entities are still at the infancy stage and are ear-marked to play a leading role in the development and diversity of the economy.

The event would afford attendants an opportunity to network with over 300 delegates, who control over US$5.7 billion (P35 billion).
“This is a very good opportunity to showcase your country to the delegates,” he stated.

He is optimistic that his association, which boasts of close to 100 members, has some of the best money managers.
“If you look at 2006, we managed to raise about US$2.3 billion (P14 billion), mostly from emerging fund markets and within Africa. We expected that figure to continue growing steadily but it increased phenomenally in 2007 to the US$5.7 billion (P35 billion) mark,” explained the Ghanaian Ababio.
This is good news to local pension fund managers, insurance companies and other capital markets players.

For fund managers, he said, they would be able to diversify their risk portfolio by considering other investment instruments with equally higher yields. Because of the small capital markets in the country, fund managers are allowed by law to invest up to 70 percent of their portfolio offshore. Ababio said AVCA is driving forward a Pan African movement and that would be beneficial to African investors as they would be able to have a stake in developments across the continent.
In the past, he said, a lot of finance was raised from overseas development financial institutions, which implies that interest and dividends accruing from financed projects in the continent benefited institutions outside the continent.

“This is a really good time for African investors to consider domiciling their funds in Africa. The continent has experienced marked improvement in the
last 10 to 15 years; amongst others, we have had debt relief, public sector transformation, political stability and recently record increase in commodity
prices. To add the cherry on top, debt instrument in other parts of the world, the US for example, are yielding lower return on investment,” he explained.
Ababio is of the view that if Africa were to heed to Pan African philosophy, the continent would experience higher employment rates, more wealth creation, enhanced local entrepreneurship and deepened capital markets. It is not only those capable of raising millions that would benefit from the conference ÔÇô even the micro and medium businesses would have something to smile about.
“If we take venture capital for instance, it encapsulates partnership with SMEs. This is the first stage of investment offering that is provided before going into private equity investment,” he explained.
Senior Investment Officer of FMO, Ben Zwinkels, concurred with his co-sponsor about Africa’s potential.

“If you want to see what has happened in Africa, then come to the conference. No one can easily believe that there are good banks, say in Nigeria or Cameroon, for instance, but that is where there is a good side of Africa,” he said.

With vast experience in investing in Africa, Zwinkels, who has invested in over 35 firms across the continent said there is no better time to consider investing in the continent than now.
“When we first invested in Benin, there was no functional bank because of the collapse of the government but we persevered. Sometimes you really have to be optimistic,” he said.

Some of the blue chip investments he hails as an epitome of African success by African investors is the setting up of shop by the South African mobile giant MTN in Nigeria.

“You see, if Nigeria was so protectionist, the telecommunication industry would have not developed to what it is today. There Nigerians have benefited in the form of improved telecommunications infrastructure ÔÇô which also has other trickle down benefits. The South African government is equally benefiting in the form of taxation. There is no such thing as taking our money and investing it in other countries or that outsiders are taking over our business. So don’t keep your money only in Gaborone, diversify your opportunities and risk,” he explained.

He is hopeful that the Gaborone administration would do better by relaxing its stringent bureaucracy.
“Right now we encountered a lot of difficulty with allowing participants from about 30 countries due to stringent VISA requirements, majority of whom are from the continent. We had to do a lot of lobbying and on wonders why it is so difficult to issue visas to fellow Africans. That is one area that might not be attractive to some of the investors. Of course, I personally understand the need for good regulatory framework, but it should not be that difficult,” he advised.

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