As the DEMO Africa 2015 closed in Lagos, the organizers reminded investors that Africa is “the next frontier”. It was their not-so-subtle cue to them to consider investing in a number of the 30 odd startups that pitched at the event.
You only have to type “Africa is …” into Google before it completes it with, “the next frontier”. That search on Google returned more than 15, 000 hits for the phrase; “Africa is the next frontier”.
It’s the favourite media trope and investments into the continent is reacting accordingly. In 2013, the continent saw FDI rise 4% to $57 billion, according to the United Nations Conference on Trade and Development’s World Investment Report.
FDI reduced in 2014, however, with a 3% drop. Investors, according to a report by the consulting firm A.T. Kearney, cited nagging uncertainties about the future health of African economies as a result of the drop in FDI.
The outlook however remains generally bullish with 73% of established investors holding that Africa has improved its attractiveness compared to the year before (2013).
“From a business standpoint this is the time,” General Electric’s Chief Executive Jeff Immelt said in 2014. “The growth is real. Challenges remain but they can be solved through innovation. To play, you have to show up.”
And this is true. Some local solutions are beginning to solve for problems that extend beyond Africa. For example, BRCK in Kenya which recently started producing BRCK Kio, an e-learning tablet for pre-schoolers. Its first product was the all-terrain internet router, BRCK, that can be used in the remotest part of the world for connectivity. Solutions like these are highly scalable and promise high returns for investors.
Being the next frontier is not a tag to be proud of. It probably was in 2011. But it’s time Africa became more than a railway town, and transform into a city center.
A frontier is by definition a land with nothing to build upon. It’s a field with endless possibilities and Africa is very much like that, but that’s quite a ways off from the destination.