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    HomePartner Content“Venture Capital Designed to De-Risk Africa” — Global Investors Want End to Africa’s Non-Consumption...

    “Venture Capital Designed to De-Risk Africa” — Global Investors Want End to Africa’s Non-Consumption Challenges

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    Against the backdrop of shifting global economic dynamics, Ventures Platform’s second Africa Prosperity Summit convened over 150 global and African investors in Lagos on November 15, 2024. The theme, “Funding the Next Billion: Africa’s VC Investment Landscape in a Post-ZIRP Era,” reflected the urgency to reassess venture capital ’s role in de-risking Africa ’s economy and solving its persistent non-consumption challenges.

    In his opening address, Kola Aina, Founding Partner at Ventures Platform, underscored Africa’s unique challenges in the global investment landscape. “Africa is experiencing a population boom while venture capital inflows have declined sharply,” he said. “The continent needs ten times more capital to bridge its infrastructure gaps and address the stark reality of non-consumption.”

    Non-consumption refers to the inability of large populations to access basic goods and services due to affordability and availability constraints. Aina cautioned that without intervention, the projected population growth — 1 billion more Africans by 2050 — would exacerbate this issue.

    “By funding the right innovations, we can create high-quality jobs and scale accessibility to essential products and services, ultimately driving up incomes and consumption,” Aina added. He urged attendees to leave the summit committed to shaping Africa’s economic future.

    Delivering the keynote address, Efosa Ojomo, Director of Global Prosperity at the Clayton Christensen Institute, described venture capital as pivotal in de-risking economies. “Unlike private equity or bonds, venture capital thrives on taking the highest risks,” Ojomo said. In Africa, where infrastructure financing remains a major challenge, venture capital plays a unique role by nurturing entrepreneurial ecosystems from the ground up.

    Ojomo highlighted how VC-backed startups can create entirely new markets in sectors like health, education, and energy, accelerating consumption and economic growth. “This is not just about funding businesses; it’s about building ecosystems that can sustain long-term prosperity,” he concluded.

    The summit also featured insights from Charlie Robertson, Head of Macro-Strategy at FIM Partners, who contextualized Africa’s investment potential within broader global economic trends. He pointed to positive developments, such as declining fertility rates, improved currency policies, and the proliferation of affordable solar energy, which could enable Africa to leapfrog industrialization hurdles.

    However, Robertson warned that investors must navigate challenges, including uneven infrastructure and regulatory complexities. “The opportunity is real, but so are the risks,” he noted. “This is the moment for investors to be bold but strategic.”

    As part of its commitment to innovation, Ventures Platform launched its inaugural ClimateTech White Paper, titled “Innovating for a Sustainable Future.” The paper calls for coordinated efforts from venture capitalists and startups to combat climate change through scalable, tech-driven solutions.

    Haresh Aswani, Managing Director for Africa at Tolaram Group, provided a practical example of turning Africa’s non-consumers into active market participants. Through its strategic investments, Tolaram has created new markets for essential products, transforming millions of lives.

    The summit’s panel discussions explored untapped opportunities in underinvested markets, including Francophone Africa, and highlighted gender-lens investing as a critical pathway to inclusive growth. Sessions also addressed the high-risk, high-reward nature of venture investments and the potential for partnerships between Africa and global markets like Japan.

    Closing the summit, Dotun Olowoporoku, Managing Partner at Ventures Platform, emphasized the need for sustained collaboration. “The conversations here have sparked a movement for long-term strategic investment in Africa,” he said. “We are reshaping Africa’s future, not just for the next decade but for generations to come.”

    Since its inception in 2016, Ventures Platform has invested in over 90 startups across various sectors, including fintech, healthtech, and insurtech. Its portfolio companies have become category leaders, demonstrating the transformative power of venture capital in addressing Africa’s unique challenges.

    The 2024 Africa Prosperity Summit concluded with a shared vision: leveraging venture capital to unlock Africa’s untapped economic potential. As Kola Aina aptly put it, “This is the work that will define Africa’s next chapter.”

    With bold investments and strategic partnerships, global investors have an unprecedented opportunity to transform Africa’s economies and empower its people. The challenge is significant, but the potential rewards — for both Africa and the world — are unparalleled.

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