<figure class="image"><img src="/uploads/ag_forum_logo_2_49cb82a1d9.png"></figure><h1 style="text-align:center;">MNCs: You Can Be Angels Too...</h1>Last week in Addis Ababa the Corporate Council on Africa, in partnership with USAID and several international agriculture companies, hosted the U.S.-Africa Agribusiness Investment Forum at the beautiful Sheraton Hotel. The forum provided an excellent meeting place for multinational companies, investors and development organizations to discuss the opportunities and challenges of investing in Africa's lush and untapped agriculture sector. I met so many interesting people working on great projects. The Ethiopia Commodity Exchange, Agriculture Transformation Agency, Overseas Private Investment Corporation, Africa Development Bank and a host of other important players participated in the forum. The panel discussions showcased new models for starting, growing and investing in agriculture business in Africa. However, I observed that there were only a handful of African-owned businesses in attendance. Granted, that may not have been the target market for the forum, but it made me wonder about one particular way our (the West’s) model for entering Africa could evolve. Here’s my reasoning:One of the common stories I hear about “Africa” is how challenging it is to do agriculture here. The list is long - including issues with land rights, climate, supply chains, local unrest, limited willingness to trade with neighboring countries, etc. The predominant model for entering Africa it through joint ventures with large local companies, greenfield expansions, acquiring privatized government companies, or acquiring a majority stake in a large local companies. "Go big or go home" is the main way the West enters – because that’s how the economics of agriculture typically work.I wonder if there’s a different approach for how the West can enter Africa’s agriculture market. MNCs usually have a CSR department, and for Africa that often means a fund to support the local community where the MNC is working - building school, drilling water wells, building a clinic, etc. In this way, the MNC begins providing what the local government cannot. Sometimes these programs work; sometimes they don't. But what if two years before entering an area in Africa in a big way, the company's CSR team took a different approach? The MNC could identify local companies (likely SMEs) along their supply chain. They could then use their CSR budgets to make strategic investments in the local companies, with the goal of building up capacity and quality to meet the MNC's standards. If successful, when the MNC is ready to enter the market, their brand would already be strong with the local community because of the investments they had made in the local economy and the jobs that were created. The returns they receive from these investments could be pooled in a fund, and perhaps matched by foundations and development organizations, to finance more “social” programs such as schools, wells, etc. Could this become a fully sustained system that grows together off successful business ventures? If I were the MNC, I would feel more secure about doing a big project, because over those two years of investing I would have learned a whole lot about the economy, working with the government, and I would have built strong relationships with the national, regional and local governments. The business community would know my name as it is associated with “MNC Ventures.” My MNC would have become an “impact angel” investor!In light of this strategy, it would be interesting at next year's Forum to have a breakout session with an MNC, a co-investor and a portfolio of pre-selected companies along the MNC’s supply chain. The local businesses would pitch their company’s products and services, their investment needs and their projected returns to the MNC and investors. The MNC, as the future customer and the investor, would select the most promising companies that align with their future business needs, and then have another meeting with local partners and co-investors to develop an investment plan that would build the capacity of these local businesses to meet the MNC’s future needs. As a result, the MNC would be committed, because they are investing their money instead of donating it (and may be less likely to back out on year two), the development community would have a clear business focus to support, the co-investors can share the risk, and the local businesses... well, let’s ask them.<figure class="image"><img src="/uploads/dsc_0413_0_352c80ea3f.jpg"></figure>

Is there a different approach for how MNCs can enter Africa’s agriculture market?

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MNCs: You Can Be Angels Too...

<h1 style="text-align:center;">Why I Was Drawn to RENEW</h1><figure class="image"><img src="/uploads/egypt_door_69c2cb9035.jpg"></figure>When I was first introduced to RENEW several years ago, I was not yet familiar with the concept of impact investing or angel investors. I had yet to travel to Africa, and I didn’t know the statistics that countries in Africa are becoming some of the fastest growing economies or that the U.S. is significantly behind China and other foreign countries in investing in Africa.I didn’t know many of the things I know now about impact investing, but what I did know was this: pure and simple development as the U.S. has known it – handing out money to this organization and that – isn’t enough. I had traveled, studied and learned about many countries, impoverished communities and development organizations, and I was about to move to Cairo, Egypt, a city with more than 17 million people, 20 to 30% of whom live below poverty level. Even before moving to Cairo and seeing the story of poverty and development first-hand, I knew that the traditional model of development was lacking. For a country, a business, an individual to grow and move forward, handing them a dollar a day isn’t good enough. What happens the next day? They need another dollar. And another the next, and the next, and the next. The cycle is endless and it seems that the very act of continuously giving money actually perpetuates itself. No matter how much money is raised and given, the country/business/individual will likely need even more the next year, and the cycle will continue.I had already discovered these things about development when I became acquainted with RENEW’s work three years ago, and that is why I knew RENEW’s model of connecting investors to growing businesses in Africa was not only brilliant, but necessary.In the interim, my time living in Egypt and traveling to various other developing countries confirmed my beliefs. I saw countless situations in Egypt where development dollars left a community just as unable to help themselves as before. In many cases it actually reinforced the mindset of poverty, rather than helping communities and countries move forward into social and economic stability. Although I believe there is certainly a time and place for giving aid to people in need, the continuous act of providing aid can undermine that group’s ability and drive to look for the opportunities around them. Many of the impoverished people I met in Egypt were stuck in a cycle of poverty that was fueled by the continuous aid they were receiving. If there were abundant opportunities for businesses there to receive investments and growth capital, expand, hire more people and grow, the story of many individuals I have met would look very different. Investing in promising businesses creates jobs, strengthens the economy and is a golden opportunity to help people help themselves. This is the work that RENEW is doing, and as I learned more about the opportunities and issues in developing countries, the more I saw how important this work is.<figure class="image"><img src="/uploads/egypt_mt_sinai_0_84bc755899.jpg"></figure>Now, it’s been several years since I first grew acquainted with RENEW. I’m thrilled to become a member of the team and more excited than ever about the work RENEW is doing. RENEW’s vision of redirecting money going into Africa into investing in promising businesses rather than simply giving is the next and necessary step for how the U.S. needs to interact with the developing world. I believe that each dollar going toward an investment in a great business will have a far greater impact on the community, country and economy as a whole, and I believe we need to move in that direction. &nbsp;&nbsp;

When I was first introduced to RENEW several years ago...

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Why I Was Drawn to RENEW

<h1 style="text-align:center;">In the News…The Africa Beats</h1>Welcome to RENEW's In the News…The Africa Beats. The following post includes highlights on topics such as U.S.-Africa relations, Ethiopia, Impact Investing and more:US and Africa SABC News - The American government is moving forward with plans to increase investment in Africa and build up America’s commercial relationship with Africa, as part of President Obama’s strategy toward sub-Saharan Africa. The ‘doing business in Africa’ campaign is part of this new initiative, and the Obama administration plans to take steps to encourage more trade, investment, and economic growth in Africa through educating US businesses about the ripe investment climate on the continent. <a href="http://www.sabc.co.za/news/a/b1c6a1004da11644aaf2fbe570eb4ca2/US-to-intensify-Africa-investment--20121129">Read full article</a>Ethiopia Ventures - Ethiopia’s Prime Minister, Hailemariam Desalegn, who took office in September 2012 following the death of his predecessor, Meles Zenawi, has started taking steps to open the country up for more foreign investment. Last week, the prime minister signed a deal that will lift domestic restrictions on investors from their closest neighbor, Kenya. This is hopefully the first step of many in inviting more foreign investors into the country. <a href="http://www.ventures-africa.com/2012/11/ethiopia-opens-up-for-investment/">Read full article</a>Invest in Africa Business Day Live - Foreign direct investment in Africa is still on the rise, according to positive comments last Wednesday from the Rand Merchant Bank (RMB). RMB confirmed that South Africa is still the most attractive country in Africa for foreign direct investment, and that, despite the country’s continued battles with poverty and inequality, purchasing power remains strong. Egypt, Ghana, Nigeria, and Tunisia follow close behind South Africa in terms of attractive investment climates, and RMB reported that investors are seeing expansive opportunities for foreign direct investment in sub-Saharan Africa, especially in the resources sector. <a href="http://www.bdlive.co.za/world/africa/2012/11/29/africa-gains-popularity-as-investment-destination-says-rmb">Read full article</a>The East African - A survey by the Emerging Markets Private Equity Association (EMPEA) released last week shows that 76% of private equity firms polled have more interest in investing in emerging market funds, as opposed to those who were interested in developed economies-focused funds. The survey also showed that sub-Saharan Africa-focused funds are expected to perform ahead of other emerging markets such as North Africa, Central and Eastern Europe and the Middle East, with Africa-focused firms expected to return an average of 16% per year. The survey revealed that sub-Saharan Africa is expected to be one of the most lucrative markets for private equity in 2012. <a href="http://www.theeastafrican.co.ke/business/Africa-is-most-attractive-for-investment-says-survey/-/2560/1628052/-/pr2mvh/-/com.coremedia.mauritius.cae.contentbeans.MauArticleImpl$$[id=1628052]&amp;title=Africa is most attractive for investment — survey/">Read full article</a>Impact Investing Harvard Business Review - The number of women investors in the angel investment realm is on the rise, and with good results. Although historically women have made up just 10-15% of angel investors and venture capitalists, that number is starting to increase. The Kauffmann Foundation recently found that venture funds with more women involved tend to invest in companies founded by women 70% of the time, and that women entrepreneurs bring in 20% more revenue with 50% less money invested. Investors who are looking to expand their network should take note. <a href="http://blogs.hbr.org/cs/2012/12/a_wave_of_angel_investing_orga.html">Read full article</a>Conferences/Forums African Business Review - The second annual African Capital Markets Conference took place last Thursday, December 6, in London. On the agenda were discussions centered around the investment landscape of sub-Saharan Africa, including the growth of Africa’s currency debt markets, assessment of corporate funding options, how to promote growth and confidence in Africa’s debt markets and the role of developmental finance in the investment market in Africa. The conference included participants who are already active in investments in Africa, along with others who are looking to capitalize on the wealth of opportunities there. <a href="http://www.africanbusinessreview.co.za/money_matters/african-investment-is-on-the-agenda">Read full article</a>

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In the News…The Africa Beats - Part 5

<h1 style="text-align:center;">Update From the Field</h1><figure class="image"><img src="/uploads/norway_december_1_25c41fb7dc.jpg"></figure>I am writing to give you a brief update on RENEW’s upcoming travel schedule and activities. I wish you and your family a happy holiday. We hope 2012 was a prosperous and healthy year for you.A brief update: Our U.S. and European-based teams continue making impressive progress with their investor outreach activities. Over the next four weeks we have a number of meetings scheduled in Europe and the U.S. with investors interested in Ethiopia. This swell of interest is exciting because, despite its current foreign investment challenges, it means that Ethiopia’s brand is strengthening in the global marketplace. As always, I emphasize that changes take time and require exceptional amounts of work to ensure Western investors and Ethiopian businesses have successful investment relationships. However, as we continue to meet (and meet, and meet) with members of the Ethiopian government, we’re encouraged by their heightened state of awareness about the importance of receiving feedback about how to improve Ethiopia’s support for foreign investors.We are also engaged in a number of exciting projects with local companies. Here, we have observed notable change, specifically towards business owners’ perspectives around the value and importance of bringing on equity partners. We are seeing an acceptance that the global market is coming to Ethiopia, and with it, increased competition. Once closely-held family companies are starting to open up to foreign partnerships and realizing that capital and knowledge transfer are keys to staying competitive.All of this, and more, has been incorporated into our “Unwritten Rules” training. We’re excited to say that we piloted this training twice in December, with great success, and will be offering it to a small group in January.What's next: Our executive team is currently in Norway – it’s cold and snowy compared to the beautiful warmth of Ethiopia. Here we are continuing discussions with investors that we started back in October. After the holidays, we will be traveling around the U.S. to meet with investors in Colorado and North Carolina. Our core team will return to Ethiopia mid-January, at which time we will be preparing for a number of investor trips we have scheduled for the first quarter of 2013. As a reminder, only businesses that have taken the “Unwritten Rules” will be introduced to investors. If you would like to attend the January session, please contact Kathleen DeLaHoussaye <a href="mailto:kdelahoussaye@renewcapital.com">kdelahoussaye@renewcapital.com</a>, to reserve a spot.In a few weeks we will be releasing our 2013 priorities – activities that will continue building a new investment bridge between the West and Africa.Happy Holidays.

An update from Norway and what's coming up in 2013...

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Update From the Field

<h1 style="text-align:center;">In the News... The Africa Beats</h1>Welcome to RENEW's In the News…The Africa Beats. The following post includes highlights on topics such as Investing in Africa, Impact Investing and more:Ethiopia BBC - A special report from the BBC details the rise of booming businesses in Ethiopia and how a country once associated with complete poverty is yielding returns as high as 30%. <a href="http://www.bbc.co.uk/programmes/p0104gjj">Watch the full video</a>Invest in Africa Africa Mentor - An interview conducted this week from with US and UK based investment firms points to promising investment opportunities in Africa. The interview revealed important insights for individuals and companies considering African investments, including that productivity and consumption in Africa have been rising since 2000, and forecasts show that consumption will nearly double again by 2020. This would put Africa at the same level as China in 2009. <a href="http://africamentor.com/african-investment-why-it-is-attractive/">Read full article</a>Ventures – Last week a report was released detailing the top 40 African investment highlights of 2012, ranging from $115 million five-star hotel in Port Elizabeth, South Africa, by Emfuleni Resorts, to $100 million technology center in Ghana by RLG Communications, Africa’s leading mobile phone and computer assembler, to a $40 million healthcare facility in Morocco. <a href="http://www.ventures-africa.com/2012/12/top-40-investment-highlights-in-africa-2012/">Read full article</a>Impact Investing AdvisorOne – The third annual survey by J.P. Morgan and the Global Impact Investing Network confirm that impact investing is on the rise. The survey found that respondents had committed to invest $8 billion in impact investments in 2012, and in 2013 they were planned to invest $9 billion. Additionally, 68% reported that their portfolios’ 2012 financial performance was in line with their expectations, with 21% reporting out performance. <a href="http://www.advisorone.com/2013/01/07/impact-investing-on-the-rise-survey-says">Read full article</a>

In the News... The Africa Beats - Part 4

<figure class="image"><img src="/uploads/timkat_flags_january_20_2012_ab56f1252e.jpg"></figure><h1 style="text-align:center;">RENEW Update</h1>The RENEW team is back in Addis!After almost a month of traveling around Europe and the U.S. meeting with investors and business executives interested in Ethiopia's growing private sector, we're excited to be back in Ethiopia to begin preparing for a number of investor trips we will be hosting over the next several months. As part of RENEW's effort to build a business and investment bridge between Ethiopia and the U.S. and Europe, I'd like to share some of the feedback we gathered during our recent meetings.The RENEW team started our tour in December with a return to Norway. Yes, it was cold. Our partners in Oslo had arranged a number of meetings with investors we had met with in October and with some Members of Parliament. During the investor meetings, Norwegians were clearly excited about the potential, and asked specific questions about "how an investment in an Ethiopian company would work." Specifically, they wanted to know about exit strategies, repatriation of capital, taxation and the risks of inflation. The MPs were interested in RENEW's model of partnering with development organizations to lower the transaction costs and risks for investors. There seems to be a growing interest for these types of programs vs. traditional aid programs.In the U.S., we took a week off to visit with family and friends, then we traveled to Denver, Colorado and Charlotte, North Carolina to meet with more investors. No, we didn't ski in Colorado. Yes, I wish we had. During these meetings we learned about a growing frustration wealthy philanthropists have with traditional giving and how many want to move towards more impact investment solutions (<a href="http://www.campdenfb.com/article/wealthy-philanthropists-becoming-more-impact-driven">Read more about the trend.</a>). Not surprisingly, we also met with some NGOs and faith-based organizations working in Ethiopia that want to start impact investment programs as well. The shift is happening. We are tentatively planning a meeting in Denver, CO in the late spring or early summer for a forum around impact investment strategies in Ethiopia!We have a number of investors coming to Ethiopia over the next three months and we are looking forward to introducing them to many Ethiopian entrepreneurs and showing them the great investment potential here.Happy 2013! And if you are in Ethiopia...Happy Timkat!

An update from the RENEW team and what's coming up in 2013...

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RENEW Update

<h1 style="text-align:center;">In the News... The Africa Beats</h1>Welcome to RENEW's In the News…The Africa Beats. The following post includes highlights on topics such as Investing in Africa, Impact Investing and more:Invest in Africa Voice of America - At the World Economic Forum in Davos, Switzerland, South African President Jacob Zuma and other African leaders discussed what is currently being done to make Africa more attractive to foreign investors. The panel, titled 'De-risking Africa' discussed perceptions that foreign investors have regarding investment in Africa and how to address and change those perceptions. <a href="http://www.voanews.com/content/world-econd-forum-africa-24jan13/1590036.html?utm_source=voaafrica&amp;utm_medium=twitter&amp;utm_campaign=en&amp;utm_content=twitterfeed">Read full article</a>Sports Pro - The Africa Cup of Nations, Africa's leading football tournament, kicked off last week in South Africa. One of the shirt sponsors, Invest in Africa, works to promote Africa as a credible business destination and is using the Africa Cup of Nations as a way to promote and celebrate the continent's potential. Invest in Africa sees the football tournament as a great way to showcase some of the world's fastest growing markets, as evidenced by 6.6 billion cumulative television viewers who tuned in for the competition last year. <a href="http://www.sportspromedia.com/guest_blog/how_the_africa_cup_of_nations_can_help_promote_africa_as_a_leading_business/">Read full article</a>Impact Investing Huffington Post - A look at some lessons that impact investors can learn from the struggles and successes of microfinance in the last 30 years, including how impact and returns are measured. <a href="http://www.huffingtonpost.com/tilman-ehrbeck/lessons-impact-investing-_b_2569243.html">Read full article</a>

Read highlights on topics such as Investing in Africa, Impact Investing and more...

In the News... The Africa Beats - Part 3

<h1 style="text-align:center;">In the News... The Africa Beats</h1>Welcome to RENEW's In the News…The Africa Beats. The following post includes highlights on topics such as Investing in Africa, Impact Investing and more:Invest in Africa Africa Mentor - More signs are continuing to point to Africa's growing investment climate. Commentators are noting several trends: the growing middle class has more disposable income than the last generation, there is increased investment from the 30 million African diaspora who have migrated from Africa, and there are a significant number of technology incubators popping up all over Africa. <a href="http://africamentor.com/african-investment-climate-heating-up/">Read full article</a>Impact Investing Forbes - The University of Utah recently announced the opening of an impact investing center, created with a gift from technology entrepreneur James Lee Sorenson. The center's goals involve allowing students to gain real-world experience with investing and to study impact investing. Unlike other universities that have a focus on social entrepreneurship, the Center will focus on hands-on investing. <a href="http://www.forbes.com/sites/annefield/2013/02/14/impact-investing-gets-a-university-center/">Read full article</a>SMEs in Africa BusinessTech - Microsoft recently unveiled its 4Afrika Initiative, through which it aims to engage in Africa’s economic development to improve its global competitiveness. The initiative's goals involve making smart devices available to millions of Africa's youth by 2016, helping bring small and medium-sized businesses online, and boosting job skills for Africa's workforce and recent graduates. <a href="http://businesstech.co.za/news/it-services/31170/microsoft-targets-africas-smes/">Read full article</a>

More signs are continuing to point to Africa's growing investment climate.

In the News... The Africa Beats 

<figure class="image"><img src="/uploads/photo_5_0_cd7310392b.jpg"></figure><h1 style="text-align:center;">Angel Investor Trip Update</h1>“Are Americans serious about investing in Ethiopia?” questioned an entrepreneur attending RENEW’s recent Unwritten Rules workshop. We think so. After a year of testing the market, RENEW has attracted interested private capital including more than $10M from U.S. angels, $10M from impact funds, and a potential $5M from NGOs and foundations looking to invest in Ethiopian SMEs. And this is only the beginning…The RENEW team recently concluded another successful week hosting several angel investors from North Carolina here in Ethiopia. The group is part of a growing network of Impact Angels from the United States and Europe that RENEW has been building since 2007. So far this year, we have hosted two groups, and several more are scheduled in the coming months. These investors are coming to Ethiopia in search of opportunities to create impact and returns beyond what traditional aid and charity models or investment funds currently offer them.As our list of visiting investors continues to grow, we would like to share some feedback we captured from the most recent group to help encourage and guide businesses and development partners who are eager to engage with this growing class of investors for Africa.We’ve learned that it’s necessary to clarify what an angel investor is. These are sophisticated investors who make direct investments into promising businesses. Impact angels are different from a fund, and very different from a charity or grant making entity. In the words of one of our impact angels, “We’re making investments. This is not charity and it’s not a grant. We’re here to do real investments with a profit and values motive.”These angels are looking for good returns and good impact - such as helping empower women in leadership roles, creating jobs and sustainability, and lowering Africa’s dependence on charity and aid. They are well-connected and experienced in growing and running successful companies. RENEW facilitates investment from these impact angels into promising businesses in Ethiopia and across Africa.Check back next week for more details and photos about what our angel investors were up to last week!