<h1 style="text-align:center;">Mo Ibrahim: How to Spend $10 Billion in Africa</h1><figure class="image image-style-align-left"><img src="/uploads/Mo_Ibrahim_0_c7540699b6.jpg"></figure> When the Wall Street Journal <a href="http://online.wsj.com/article/SB10001424052748703787304575075350668982866.html?KEYWORDS=philanthropy">asked</a> ten philanthropists and executives how they would spend $10 billion to make the world better, they got plenty of good ideas. But to my mind, one was clearly the winner. Mo Ibrahim, the telecom mogul, offered a deceptively simple - and immensely valuable - idea: "Establish a statistics office in Africa." Why?<ul><li>Africa's needs and potential are vast, while means are scarce. This necessitates efficiency, which is dependent on an ability to define aims, and to measure them, in order to assess results. In short, good governance.</li><li>This does not happen at the moment. The lack of comprehensive and reliable statistics inhibits all stakeholders, whether civil society, governments or donors.</li><li>So, I would use the $10 billion to fund the development of national or regional statistics offices. They would improve data collection and dissemination to ensure public access to, and sophisticated application of, these data.</li></ul>Ibrahim is right on the money. From an analyst's perspective, Africa is a black hole. Whether you're in business, government or philanthropy, that makes it hard to know what you're getting into (there is no baseline data) and what you might hope to accomplish.This data problem is one of the biggest that African SMEs face in attracting capital and business partners. The leading businesses, financial institutions and development projects in Africa will address this need over the next decade.

When the WSJ asked ten philanthropists and executives how they would spend $10 billion...

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Mo Ibrahim: How to Spend $10 Billion in Africa

<h1 style="text-align:center;">What Are RENEW's Social Goals?</h1>That is a question that we, the RENEW team, have asked each other many times - and one that is common to most investors who approach African businesses with a social lens. Without question, we see tremendous opportunity for specific kinds of businesses to, say, revolutionize healthcare delivery or provide clean, affordable energy to rural areas.But there is a more fundamental idea that drives RENEW's model - and helps us keep in check the temptation to define exactly how social change should occur. Carl Schramm, president of the Kauffman Foundation, captures it succinctly in his article in the spring issue of the Stanford Social Innovation Review: <a href="http://www.ssireview.org/articles/entry/all_entrepreneurship_is_social">All Entrepreneurship is Social</a>. He writes:<blockquote>One danger... is that the use of the modifier social will diminish the contributions of regular entrepreneurs—that is, people who create new companies and then grow them to scale. In the course of doing business as usual, these regular entrepreneurs create thousands of jobs, improve the quality of goods and services available to consumers, and ultimately raise standards of living. Indeed, the intertwined histories of business and health in the United States suggests that all entrepreneurship is social entrepreneurship.</blockquote>Schramm goes on to elaborate how much social return plain, old-fashioned entrepreneurship has produced. RENEW seeks to capture that idea in our mission - "Serving Investors. Growing Businesses. Igniting Change."As investors discover the potential of more and more African entrepreneurs, RENEW aims to continue to show the social impact of all kinds of entrepreneurship, done well.

That is a question that we, the RENEW team, have asked each other many times...

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What Are RENEW's Social Goals?

<h1 style="text-align:center;">Davos Discusses Investment in Africa</h1>Ed Cropley and Ben Hirschler of Reuters filed a <a href="http://www.reuters.com/article/idUSTRE60P04120100128">special report on Africa from Davos</a> last week. I've included a brief excerpt below. Note that the long-term "buy" recommendation, that <a href="../2008/benchmarking-potential-eight-african-countries.html">analysts gave</a> before the financial crisis, persists.<ul><li>Investors with cheap cash needing to spice up returns in more obscure parts of the globe are asking whether Africa can shift from final investment frontier into the emerging market mainstream. Reflecting this interest, Africa gets top billing at the annual meeting of the rich and powerful in Davos this week.</li><li>"Not investing in Africa is like missing out on Japan and Germany in the 1950s, Southeast Asia in the 1980s and emerging markets in the 1990s," said Francis Beddington, head of research at emerging market investment house Insparo Capital.</li><li>He believes that in the long term, Africa has the potential to be home to a sizeable chunk of the factories and warehouses of tomorrow's world.</li></ul>

...long term "buy" recommendation persists.

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Davos Discusses Investment in Africa

<h1 style="text-align:center;">Three Lessons From Nairobi and Kigali</h1> When I returned the week before last from a trip to Nairobi and Kigali, my brain felt like it had eaten a huge meal and needed to digest. I've had a chance over the past two weeks to review the many conversations I had with business owners and public and private sector leaders. (I think I doubled the weekly revenues of a few coffee shops in Nairobi and Kigali.) After some reflection, three themes have bubbled to the surface:<ol><li>Capital-starved does not equal capital ready. Most small businesses in Kenya and Rwanda are capital-starved -- even ones that are turning a profit. But in the vast majority of cases, there is much pre-work to be done within the business to lay the foundation upon which an infusion of capital can grow the business. Without this pre-work, capital can exacerbate unresolved issues and ultimately hurt the business.</li><li>Business owners in search of capital need to understand exactly what their options are. Equity is a powerful, patient instrument that will help close the gap between SMEs and big business in East Africa. But it comes with a set of responsibilities and expectations that are poorly understood, for the most part, by business owners. Yes, equity entails some loss of control -- but also a host of connections and resources that can propel the business in new ways. Owners need a place to think hard about not just how much, but also what kind, of financing will serve their business best. There is a lot more to capital than money.</li><li>Managers need a coach, not a consultant.Management teams need their capital partners to help implement change, not tell them what to do. Before this trip, I did not really grasp the difference. Both investor and business owner need to be prepared to roll up their sleeves and get to work both "on" the business and "in" the business.</li></ol>The common theme here is the need to understand your business partner very well. Our team thinks that is best accomplished face-to-face, so RENEW is rolling out a series of workshops this spring in Nairobi, Kigali and Kampala that will help business owners get ready to do business with the West. Stay tuned

When I returned the week before last from a trip to Nairobi and Kigali...

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Three Lessons From Nairobi and Kigali

<h1 style="text-align:center;">Compelling Incentives to Invest - Is a Tipping Point Near?</h1>As Western investors slowly begin seeing potential in Africa, we'll probably begin seeing more articles like <a href="http://www.bloomberg.com/apps/news?pid=20601080&amp;sid=aeuJT_pSE68c">Ethiopian Farms Lure Investor Funds as Workers Live in Poverty</a> coming from main-stream investment publications like Bloomberg. As African leaders shift their focus from aid to investments, they hope that market drivers will help take their economies up the <a href="http://www.doingbusiness.org/EconomyRankings">World Bank rankings</a>, and flood their markets with foreign direct investment. Africa's leaders can now be found as frequently on Wall Street asking for investments, as they can in Washington, D.C. asking for aid. The Fortune article, <a href="http://money.cnn.com/2008/02/13/magazines/fortune/gunther_africa.fortune/index.htm">Investment in Africa Starts to Pay Off</a>, reads, "...virtually every country, their presidents, and even the leaders of the opposition parties, have gotten on the same page regarding the primacy of the private sector, the need to deregulate, and the importance of attracting foreign investment. Centralized planning, state control of assets and socialistic rhetoric, for the most part, are dead. Market forces have won."The U.S. only has a handful of funds actively investing in Africa, while India, China, the Middle East and Europe are moving in to take advantage of the handsome social and financial returns Africa is offering. So, although considerable amounts of perceived and actual risk exist, the questions is out there: is a tipping point near?Let us know your thoughts.

As Western investors slowly begin seeing potential in Africa...

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Compelling Incentives to Invest - Is a Tipping Point Near?

<h1 style="text-align:center;">Schedule a Meeting During My Trip to Nairobi and Kigali, January 4 - 15</h1>This update is especially for our Kenyan and Rwandan friends and partners. After what is sure to be a marvelous holiday visiting family outside Nairobi later this month, I will be working out of Nairobi and Kigali January 4 - 15.So if you're in either city during that time and are interested in RENEW's work, know of a business we should list on our Marketplace, or think there's someone I should meet, please do send me an email: jweissburg at renewcapital.com. You can also post any suggestions in the comments area below.During this trip, I will be working to build RENEW's local partnerships and getting to know a variety of individuals and organizations in the Kenyan and Rwandan business sectors.I look forward to hearing from you!

...for our Kenyan and Rwandan friends and partners.

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Schedule a Meeting During My Trip to Nairobi and Kigali, January 4 - 15

<h1 style="text-align:center;">In Africa, Do What Works</h1>What a refreshing piece from the New York Times columnist (and longtime development aid advocate) Nicholas Kristof in last Sunday's Times. His insightful take on the much-debated value of development aid titled simply <a href="http://www.nytimes.com/2009/11/22/books/review/Kristof-t.html?_r=2&amp;ref=review">How Can We Help the World's Poor</a>, was right on the money. Kristof advises that we take note of but look past the headline-grabbing debates between the various camps promoting or excoriating aid as a giant waste of time.Look, says Kristof, to the projects that are being rigorously evaluated, some of which actually produce measurable results for the poor. And guess what? Many of these turn out to be businesses:<blockquote>I was recently in Liberia, a fragile African democracy struggling to rebuild. It is chock-full of aid groups rushing around in white S.U.V.’s doing wonderful work. But it also needs factories to employ people, build skills and pay salaries and taxes."</blockquote>Through our online Marketplace, RENEW is working to provide a forum for these entrepreneurs to tell the story of the impact they have had and the impact they hope to achieve.<a href="https://renewcapital.com/marketplace">Take a look</a> and tell us what you think.

What a refreshing piece from the New York Times...

In Africa, Do What Works

<h1 style="text-align:center;">Thoughts from the ANDE Meeting</h1>This past Friday I attended a small portion of the 3 day extravaganza that is the <a href="http://www.aspeninstitute.org/policy-work/aspen-network-development-entrepreneurs/">Aspen Network of Development Entrepreneurs (ANDE)</a> annual meeting in Glen Cove, NY. ANDE is a membership organization that is bringing structure and something like a shared agenda to the new and uncertain field of SME (ANDE calls them “SGBs - small and growing businesses”) investment.This is sorely needed. The ANDE meeting was perhaps the only gathering I’ve attended where I felt that everyone there understood exactly why SMEs/SGBs are important and shared a common goal: help them succeed. The field spends so much time explaining itself that it’s important that organizations that do already “get it” can sit down and talk about where they are stuck, where innovation needs to occur and figure out who might have some good ideas.I also appreciated the fact that ANDE spans a range of nonprofit and for-profit approaches, and the <a href="http://www.aspeninstitute.org/sites/default/files/content/upload/ANDE">stellar roster</a> of participants mostly recognizes that this spectrum is necessary to move the SME field toward self-sufficiency. To me, some of the most exciting stuff to come out of this meeting has to do with how and where, exactly, nonprofit organizations can supply the sort of technical assistance that entrepreneurs need in order to prepare themselves to attract private capital. That is the sort of discussion that makes ANDE’s convening work exciting and of great value to the work that RENEW does.

This past Friday I attended a small portion of the 3 day extravaganza...

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Thoughts from the ANDE Meeting

<h1 style="text-align:center;">What Have We Been Up To?</h1>RENEW will soon be rolling out beta versions of web 2.0 tools for both investors and businesses.Soon investors will be able to:<ul><li>Search or browse through profiles of Kenyan, Ugandan, Rwandan and other East African businesses in a new online marketplace.</li><li>Map your geographic and sector-focused investment strategy to specific SMEs, connecting you or your organization directly to owners and staff.</li><li>Contact RENEW directly with request for information and help making investment decision.</li></ul>Entrepreneurs in emerging economies will be able to:<ul><li>Apply for placement on RENEW’s virtual Marketplace.</li><li>Upload their business plan, financial statement, investment proposal, and management team CVs via a secure application for consideration.</li><li>If selected, have a investment profile done on their business completed by RENEW’s team of professional consultants.</li><li>Visit our website and gain access to tools created specifically to address your needs and make your business more attractive to U.S.-based investors and business partners.</li></ul>But I’m getting ahead of myself. Why these tools, and why now?Many of you - friends and colleagues hard at work figuring out how to deploy capital to greater effect in Africa and other frontier economies - have been following us for the past year or so on this site. We’ve sat down with some of you in coffee shops and conference rooms from Nairobi, Kigali and Kampala to D.C., Austin, New York and Denver, and many spots in between. Over the course of these travels (not to mention a financial crisis that shook developed and emerging economies alike and prompted much reflection on the uses of capital) our team has learned some key things about what the SME investments need to become a viable asset class.Over the past several months, our team has been refining that learning by creating practical tools that we think are necessary to move SME investment forward. RENEW started out with a very simple idea: for businesses anywhere, connectivity = growth. Isolation = stagnation. Nowhere is this more true than Africa, where small and medium-sized businesses lack connections to investors, suppliers and customers - and lack the systems and data to build such connections. When RENEW launched its sourcing, due diligence and management consulting services last year, we did so to address the obstacles U.S.-based investors and businesses face finding, connecting to and managing their relationships with African businesses.Our strategy has not changed. Connectivity still equals growth, and RENEW will continue to build and provide on-the-ground expertise and personal relationships essential to doing business. But the landscape is changing - the possibilities for different kinds of connections are proliferating and evolving rapidly. This summer, high-speed Internet cables landed across Africa. Taken together with the remarkable growth in hosted (online) data services, RENEW sees a tremendous opportunity to facilitate a great many more connections between U.S. investors and businesses and African SMEs - and improve the quality of the information exchanged.So the RENEW team spent the last couple of months developing tools that we think can help address the bottlenecks faced by financial institutions (African and U.S.-based), business owners, and development organizations. We would welcome feedback from you, too. Once the new site is up, please let us know what you think at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a>. Enjoy!