In May 2017, Nigeria’s Aliko Dangote announced plans to invest in what he promised would be West Africa’s largest sugar plantation and processing facility, set to cover 60 000 hectares in Nasarawa State, Nigeria.
The plant, which is expected to become operational in roughly two-and a half years, will reportedly produce 480 000 tonnes of sugar and generate up to 30 000 jobs.
Dangote now lords over a growing empire worth an estimated $12.3 billion (R162.45bn), spanning investments in cement, infrastructural development, freight, agriculture, and more recently, petroleum refining. Rarely do declarations he makes regarding his investment strategy go without igniting widespread debate within the continent’s tech scene. Why? Well, many tech entrepreneurs feel that Africa’s wealthiest man ought to be doing more to spur growth in the continent’s emerging tech ecosystem.
It’s no surprise, then, that Dangote’s intent to invest 60 percent of his business outside Africa as of 2020 – as declared in an interview he granted Bloomberg recently – has annoyed many people within and without the continent’s tech and innovation circles.
While African English Premier League fans may perhaps be intrigued by his long-standing itch to acquire the Arsenal Football Club, Dangote’s seemingly non-progressive pronouncement has rubbed some pro-African investment proponents up the wrong way.
Conversely, he has long been described by leading financial publications around the world as a bold visionary, willing to take risks that many of his more conservative counterparts around the world would shy away from.
He did, after all, reportedly lose $6bn in a single year. But when asked point-blank why he’s opted not to fund tech start-ups, he stated that his personal passion, preference and strength is working in the “industrialisation” space.
Like many others who are bullish on tech investment prospects on the continent – I initially felt a little let down by Dangote’s global diversification blueprint.
However, upon reflection, I have to admit that if I were in his position, I might likely sport a similar outlook. There is, after all, only so much uncertainty that one can comfortably take on when managing substantial wealth amassed in a single generation. The stakes in legacy terms are fairly high. Also, it is tempting to buy into the wizzy notion that all Africa needs to escape the poverty cycle is the internet, mobile phones and clever software applications. Some even believe that Africa might do well to harness the mobile adoption wave in order to “leapfrog” in other technologies.
However, in a think piece entitled Leapfrogging Progress: The Misplaced Promise of Africa’s Mobile Revolution recently published by Calestous Juma, a professor of the practice of international development at Harvard Kennedy School, he asserts that while there is some basis for embracing the growing adoption of mobile devices by Africans as a “symbol of leapfrogging”, it would be unwise to discount the role of infrastructure in enabling the much-lauded mobile-related progress currently sweeping Africa.
Juma considers infrastructure to be foundational to economic growth, describing it as “the motherboard of technological innovation”.
Let’s face it, Dangote has already done more than most to invest in pragmatic plays that I believe will give Africa the necessary infrastructural backbone to assert itself more confidently on the global stage.
While I’m not sold on his reasons for not investing in African tech start-ups, I do appreciate the fundamental role that the infrastructure investments he has so far made have played in moving the needle in terms of sustained economic growth for the continent.
In his article, Juma further points out that upon close inspection, infrastructure ventures are in fact technological in nature. Regardless of whether or not Dangote actually views such enterprises as tech plays, fact is, a ton of scientific and technical expertise is required to successfully execute on large-scale cement production, sugar processing or even petroleum refining.
Now, while my Pan-African spirit is a wee-bit sore at the prospect of more and more of Dangote’s wealth being deployed off-shore in the coming years, I must acknowledge how such a move might signal that Africa is indeed coming into its own as a global economic power.
At Afrobytes Conference 2017 hosted in Paris this past June, Pierre Gattaz, president of MEDEF – France’s most powerful business association – kept it 100 in his opening address when he said that given Africa’s growth prospects, his organisation couldn’t afford to ignore the fact that Africa is not only poised to deliver inestimable value in terms of being a lucrative consumer market for French goods and services, but also that the continent would undoubtedly become a source of finance for French businesses.
Dangote appears committed to making such a future a reality, by normalising the significant flow of African wealth all over the world in pursuit of global diversification. I’m not letting Dangote off the hook, mind. It would be awesome to see him bet on some of the more overtly cutting-edge tech start-ups vying for prominence within the continent’s tech industry.
How cool would it be for him to lead a high-profile investment drive in a tech genre that’s popping off right now? Committing just one or maybe even two hundred million bucks to a handful of promising start-ups within fintech, agritech, renewable energy or broadband fibre infrastructure might do the trick.
Or maybe he could go big and buy Dimension Data’s African operations from Nippon Telegraph & Telephone Corporation, who are rumoured to be keen on unbundling that business. Come on, Mr Dangote. Give this tech commentator something juicy to write about.
Meanwhile, in South Africa, AlphaCode is also flexing its international intent. The fintech investment arm of Rand Merchant Investment Holdings has just announced their participation in Prodigy Finance’s $40.4 million Series C equity round.
Prodigy is an international fintech platform whose claim to fame is having developed “the world’s first borderless credit model”. The investment was led by venture capital firm Index Ventures, which then roped in Balderton Capital, AlphaCode, as well as a global investment bank to finance a $202.2 millionm debt facility.
Prodigy Finance offers loans to postgraduate students accepted into business, engineering, law and public policy degrees at the world’s top universities. The UK-headquartered company is celebrating its tenth anniversary, and the raise will help the firm expand operations in its subsidiary locations – Cape Town and New York.
So far, the company has reportedly provided more than 7 100 students overin excess of $328.5 millionm in funding and expects to lend to 20 000 customers by the end of 2018. Like it or not, it does appear this trend towards global diversification is here to stay.
Andile Masuku is a broadcaster and entrepreneur based in Johannesburg, South Africa. He is the Executive Producer at AfricanTechRoundup.com. Follow him on Twitter @MasukuAndile and The African Tech Round-up @africanroundup.