Ep 13: Dagmawi Ambaw: Why Investors Are Missing Africa's Biggest Opportunities

Thank you for having me, Andrew.

I would say the question everyone in different African countries is trying to ask is, one, how do we get local capital more involved? And two, how do we create this vat of information that goes out of the country and removes some of that opaqueness that you talked about? And a lot of the issues often stem from, there is different regions and different languages across Africa.

Even if you go and think about the different blocks within Africa, you have Francophone Africa, Anglophone Africa.

And a lot of the times, the information that's coming out of those countries doesn't reach the right investors or people looking to invest in those countries, don't get anything published from within the country.

So there's a lot of opaqueness that comes from the narrative being controlled around those four big countries that you always see being talked about in terms of venture capital within Africa.

One of the trends that I see in reading the Africa report and local investor reports and even international news is the rise, as I said, of Pan-Africanism.

You see, for example, Aliko Dangote from Nigeria saying he only wants to invest in Africa.

You're seeing this opening of visa-free travel to all Africans across more African countries.

And I wonder what other evidence we're seeing of this trend where successful Africans are saying, "We have to invest not overseas, but in our own economy, and particularly perhaps in the venture economy."

Mm-hmm.

Mm-hmm.

Yes.

Like over the past ten to fifteen years, there's been a movement both from, I would say, the diaspora, but as well as high net worth individuals within those countries, where there's more interest in investing in local technology startups it might be, or even traditional business.

So there's this aspect of identifying these opportunities and being able to also, not only within your own country, but when you're looking outside of your country to go to another African country, because you see a lot of these expansions, there's always this conversation of one single African country not being big enough for a lot of venture investment, and a lot of investors wanting to expand to multiple African countries.

That's also dr- some of the driving factor that's having founders and investors look beyond their own specific country and having this Pan-African view.

And so in the venture world, is that regional? So you're in Ethiopia.

Are people in and around Ethiopia saying, "Let's expand nearby"? And what is the direction of travel? Is it Burundi coming to the larger market of Ethiopia? Is it the other way around? Or are people just kind of hopscotching across the continent?

Yeah.

So within the context of Ethiopia, you see some startups, some investors moving to countries where you have a good ecosystem for investment.

So within that region, you have countries like Kenya and also now Rwanda.

That's creating a lot of good governance, making it easy to invest in businesses and also expand from one country to another when you founder trying to look to other markets.

So a lot of the times people look region- regionally, and then also you get to ask those questions of, where do I invest my money? Who makes it easy for me to invest my money, and how do I expand?

I'm gonna come back to that vis-à-vis Ethiopia and perhaps some other markets, and we'll cover perhaps the misconceptions about venture investing in some of these African countries.

But you mentioned the diaspora.

I remember reading a number of years ago, an article about even Somalia, also in East Africa-