No. 246: Monday Reads

W.E.B. DuBois

COVID-19 in Africa: Outcomes and Scenarios – Ronak Gopaldas of Signal Risk put together a nice analysis of the potential economic impact of COVID-19 on African markets. The central conclusion is that the path out of this situation is going to take years, something that is true for countries around the world. It’s frustrating to have this be the reality for African countries trying to navigate the path to sustainable economic growth and better lives for the people. Here’s to African countries figuring out that path and marching forward aggressively. Gradatim ferociter.

COVID and forced experiments – This is a good reminder from Benedict Evans that while most of the world is online, a significant number of people are not. eCommerce isn’t the answer for everyone. Telehealth doesn’t work if the patient pretty much has dial-up speeds at home. So, how do you move forward in pushing new technologies while ensuring everyone gets the services they need?

This is where the trope of “let the market handle that” sounds ridiculous. A number of companies will say that ensuring a potential customer in the middle of nowhere gets access to a product or service isn’t profitable enough to make the effort. From experience, I’ve seen them also complain about government trying to step in to fill those gaps. I’d love to see more situations where the private and public sector team up on this sort of thing more, but we’re not there yet.

What is the problem of racism has no solution? – I look forward to reading Afropessimism by Frank Wilderson. I struggle with the world view of folks like Ta-Nehisi Coates who don’t see a world in which black folks get a W. I think the world has been around for too long and civilizations have changed place for top dog position too many times for this to be true.

At the same time, my own pessimism comes out in my belief that centuries from now, if black people (If that’s even a thing at that point in time) have the capacity to be just as cruel as white folks have been in the time they’ve been dominant globally. Hopefully, folks like my cousin Kobe speak enough truth and beauty to keep us from acting on that capacity.

Our World in Flow Change – David Galbraith lays out the design of systems and what needs to happen to ensure whatever new system we have coming out of COVID-19 is a balanced one.

XTREME: A Massively Multilingual Multi-task Benchmark for Evaluating Cross-lingual Generalization – Google is working on expanding the number of languages for which natural language processing works well. Natural language processing is basically what’s happening when you are talking to Siri or your Google Assistant. Currently, English is the main language this works in bit that will change as Google makes more progress on this project. I’m getting a kick out of my Nigerian friends insulting their Google Home device in Yoruba and it giving them pepper back.

No. 124: 3 Tuesday PM Reads – Power Struggle | Renewables Rescue the Day |Startups for Demographics

  1. Jacqueline Musiitwa shares personal anecdotes on the struggle of working in Lusaka when the power is out. Lights off is a situation Africans across the continent experience, and it impacts education, bottom lines, and general quality of life – for women, especially. Jacqueline points to initiatives like the Power Africa initiative as important in alleviating unreliable power supply across the continent.

  2. Speaking of power, Jake Cusack and other players in the renewable energy space recently shared insights on the possibilities for renewable energy and power provision now that renewable energy costs are competitive with fossil fuels. Some highlights from the piece – global subsidies for coal, oil, and natural gas totaling $550b compared to $120b for renewables; 10k customers in African countries signing up for renewable energy; and global investments in renewable energy growing from $40b in 2004 to $320b in 2011.

  3. Ablorde Ashigbi wrote a really solid analysis of the prospects for venture-backed firms seeking to serve a particular demographic. He uses Walker & Company and its first brand Bevel, a shaving system targeting black men (whenever I get out of Sampson mode and shave my beard, I look forward to using the product) as a case study.

No. 79: Mother Ghana is Struggling

My neck hurts after shaking my head while reading this Economist piece on Ghana’s economic woes. Some highlights:

  • Public debt could reach 70 percent this year
  • The Ghana Cedi has lost over 99 percent of its value to the dollar (Keep in mind Ghana switched from the New Cedi to the Ghana Cedi)
  • Since 1966, Ghana has sought IMF help 16 times

Elections are coming up next year, so we will probably see more spending. President Mahama has a lot of work on his hands in the lead-up. I imagine he will cite progress made on addressing power issues and the exploding budget, and that he should be re-elected to continue righting the ship.

Elections are a lot of work. Perhaps, the better move would be to not seek re-election, double down and get reforms right over the next 18 months, and hand off an improving situation to his successor.

No. 51: Private Equity in Africa Made One Big Little Step

I may have done a fist pump when I saw that Helios Investment Partners raised $1.1 billion for its latest Africa-focused fund – a new record besting the $908 million the firm raised about three years ago. The notion of investing on the African continent is not such a novelty any longer. Sixty percent of the investors in Helios’ last fund participated in this round. Institutional investors showed up to participate in this round. So what, you ask?

There is much work to be done on the continent, and Africa-focused funds like Helios are securing the capital to ensure that work is done – that’s the hope at least. For example, one of Helios’ portfolio companies Helios Towers raised $630 million in its push for taking Africa’s cell tower infrastructure to the next level. Last year’s Ebola outbreak exposed the need for public health infrastructure in the affected countries. Africa’s agricultural potential remains largely untapped. Transportation is still very expensive within and among African countries. Millions of people are still trying to be productive with no power for light at night. The more capital that private equity firms like Helios, AFIG, ECP, and Kuramo have to deploy, I believe they will play their part in taking out larger chunks of these problems.

So we think the industry will take off in Africa, and we now think that probably the growth rate in private equity in Africa will probably be greater than it will be in any other part of the world. [But] it will take time.

David Rubenstein said this about the private equity industry in Africa during last year’s US-Africa Leaders Summit. It will be interesting to watch this prediction over the coming years. Rubenstein says we should give it 10 years. I wonder if we will see different models flourish on the continent in that time. Bob Diamond and Ashish Thakkar’s Atlas Mara made waves last year with its rapid acquisition of a few banks across Sub-Saharan Africa after raising around $725 million. During his keynote at last year’s Harvard Business School Africa Business Conference, Bob Diamond stated that he saw Atlas Mara serving as a catalyzer of copycats. We will have to see about that. Still others point to the holding company model as working better for the African context due to their not being subject to the 10 year limited partnerships of private equity firms.

Whatever model runs the day ten years from now, I am excited about Africa-focused funds securing the capital to do big things on the continent. I hope Helios’ raise opens the door for other funds to raise funds at the $1 billion plus level.