I almost didn’t write this post. Because let’s face it, finding the energy to reflect when your to-do list is giving “never-ending scroll” is a feat. But every time I push past that feeling and show up anyway, I’m reminded: it’s worth it. So here I am, showing up again.
If you know me, even a little, you know how deeply passionate I am about Africa. I truly hope to witness remarkable progress across the continent in my lifetime.
What does “remarkable progress” look like to me? It’s every citizen having access to the basics: reliable electricity, clean water, solid infrastructure, functional hospitals, and education for every child; at least up to secondary level. That’s my baseline.
But if I’m being honest, I also dream bigger- you can call them pipe dreams, if you will. I imagine a world where people actively want to learn Yoruba, Xhosa, or Swahili (insert any other African Language). The same way I once struggled through French lessons because I thought it gave me an edge (I am still in the struggle by the way- thanks to Duolingo, 731 day streak presently). Or how millions are now learning Mandarin due to China’s rising global clout. That’s the power of perception and positioning.
Anyway, all of this brings me to what’s been on my mind.
A few weeks ago, a LinkedIn post went viral Read here. A founder shared a celebratory moment, he and a group of peers had collectively raised a significant sum. A harmless post, really. But some of the comments lit up with something deeper: where was Africa at that table?
It sparked the old, recurring debate- can Africa finance itself?
According to the African Development Bank (AfDB), the continent will require $170 billion annually for infrastructure financing by 2025. Now, let’s be clear: I don’t believe Africa can fully finance itself just yet. But here’s the thing- I do believe we’re not maximizing our current capacity.
Why, you may ask? One of the reasons that comes to mind is we’re fighting an uphill battle against perception. Specifically, the perception of risk.
Let me break it down. An economy’s interest rates are partially driven by risk premiums, i.e. Interest rates in an economy partly reflect its risk profile. In many African countries, high perceived risk contributes to expensive borrowing, both for governments and the private sector. During global shocks, central banks like the CBN often adopt contractionary policies (e.g., raising rates) to stabilize currencies and curb inflation. But this response also pushes domestic interest rates even higher, further tightening capital access. So, here’s the kicker: if investors are earning 26% on local government bonds, they’re doubling their money in under three years. Why then would they choose private markets, which carry more volatility and less liquidity?
This is the dilemma.
Calls for increased local capital participation in Africa’s private markets are valid, I’ve written about that before read here. But we can’t ignore the broader picture. From 2008 to 2022, interest rates in developed economies sat at rock-bottom levels 0% to 2%, pushing capital into alternatives (Money managers had to seek higher returns to meet client return objectives). Africa hasn’t had that luxury. Yet.
So maybe, just maybe, Africa’s moment will come when macro conditions align. Until then, let’s be clear: Africa is unique. Our challenges aren’t just economic- they’re structural, psychological, deep. But they’re not insurmountable.
What do you think?
Have you ever had to weigh passion for Africa against financial logic?
Do you believe local capital is the future of African investing?
And for my fellow dreamers- do you think we’ll see the day Swahili classes trend in London?
Let’s talk.👇🏽 I’d love to hear your thoughts.