All in

Nowhere in the world you can have that return of investment as in Africa

I just read a Wall Street Journal  interview with Mo Ibrahim, founder of Celtel and the Ibrahim prize for African leadership.

Mo Ibrahim

He’s very upbeat on investment opportunities in Africa:

Secondly, Africa had a bad reputation in business circles. Of course some African countries have issues but the vast numbers of countries are actually okay. So the perception of Africa is much worse than the reality. And whenever there is gap between perception and reality there’s a fantastic business opportunity.

That last line was one of the main themes of this blog before the whole Ivorian crisis started. I’m thinking perceptions and reality could be more out of whack than ever in the Ivory Coast at the moment, and if Ouattara manages to sort out things  – which I am cautiously optimistic about – this should be the time to go all in.

WSJ: What were the challenges with getting funding for Celtel?

Mr. Ibrahim: It was extremely difficult because the banks wouldn’t lend us money. Again banks were ruled by the same misconceptions about Africa. We had to fund the company through equity. It is a very strange way to fund a telecom company.

And even stranger way to fund a real estate company, but it was pretty good to not have any debts to service when rent payments dried up during the crisis.

WSJ: You also back a private-equity firm called Satya Capital—what are the returns like?

Mr. Ibrahim: It’s a $200 million fund. It was started about three years ago and so far we’ve probably doubled our investment—nowhere in the world you can have that return of investment as in Africa.

WSJ: Where are you putting your money?

Mr. Ibrahim: We have invested in a telecommunications satellite company called O3B focusing on the other three billion people without broadband [primarily] in Africa and we think it’s going to be a great success.

We have [also] invested in retail, financial institutions, private health, mining food, and production. This is an emerging market with a huge growth potential. It’s a place to go and make money but you need to make it honestly.


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