There is no doubt that foreign capital is here is to stay. Africa is on the rise, returns available here can’t be found anywhere else, and the dollar goes a long way on the continent.
Foreign capital is in every sphere of business, from infrastructure funded by China, venture capital in tech, private equity firms buying out Java and investing in Cellulant to over half of activity on the NSE being driven by foreign investors.
However, there is a chasm between global practices in financing, and the level of local knowledge. I was amused, and rather worried, that a local entrepreneur with 4 million shilling business asked me to explain the difference between a business name and a company. This was the same lady that had been approached by a fund that wanted to buy a stake in her business. Ramah Nyang, a brilliant local business journalist, often takes apart the deals signed by our government. Reading his analyses usually leaves me wondering how we get so snookered.
So, foreign capital being the undeniable and inevitable future, and keeping in mind our government’s adroitness when it comes to an involvement in business, how do we, as entrepreneurs, create an environment that protects us, but also allows for adequate investment? How do we get the knowledge sitting with the global deal making lawyers at Anjarwalla & Khana to trickle down to the cheaper lawyers we’ll work with, and down to us? How do we build our own capacities, such that we can tell when a deal is too sweet and when we are getting skewered?
We are all now part of a global game. The deals we only heard about are now our deals.