A Meet up with Dr. Akinwumi Adesina, President of the African Development Bank in Berlin
Berlin (Germany), June 2018. Earlier this week, GreenTec Capital CEO had the opportunity to attend a meet-up with Dr. Akinwumi Adesina, president of the African Development Bank (AfDB).The event was organized by Afrolynk and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the Ministry for Economic Cooperation and Development (BMZ) in context of the visit the Dr Adesina’s visit to meet with German Chancelor Angela Merkel and International Monetary Fund (IMF) head Christine Lagarde in Berlin. The event took place at the impact hub in Berlin and was hosted by by Moses Acquah, Afrolynk founder and Greentec Capital’s Chief Technology Company Builder.
The goal of this meet-up was to establish a dialogue between the different stakeholders of the African Startup scene in Germany. The event presented the opportunity to introduce Dr Adesina to GreenTec’s innovative investment model and identify potential areas of collaboration with the AfDB.
The discussion was focused on the different ways the African diaspora could participate in contributing to the AfDB’s “High 5” agenda and, of course, the issue of financing especially for early-stage startups. Dr. Adesina took questions from attendees and spoke about the different programs supported by the African Development Bank to help prepare the continent for an industrial revolution, from the financing of important renewable energy infrastructure to education programs focusing on technological development and knowledge transfer.
The entrepreneurs’ conversation with the AfDB’s president touched on common pain points for African entrepreneurs. Common themes were the importance of technology transfer, the different roles the diaspora could play, the development of new instruments for start-ups similar to the grants and the challenge that face the startup to access the fund allocated by the AfDB.
An important point that Dr. Adesina mentioned was, the prerogative of AfDB which is to disburse funds but through intermediary vehiclse that will not only support the financing but also the knowledge transfer. He said: “the more I look at the challenges that are out there for young people, the more convinced I am that we need to have special purpose vehicles, that are well designed to help young people to start their businesses, they don’t need a lot of money, but they need money added to put their ideas to use…and eventually grow them to the level where you would put significant amounts of equity into those businesses. “
He also spoke of the perception of risk in Africa investments the necessity to create a regulatory environment that helps de-risking investment in Africa, underlining the responsibility of the African leader to create a favorable environment to Africa industrial development.
Dr. Adesina also called on the event’s attendees to come up with tangible solutions as he believes in a bottom up approach to help face today’s challenges. Dr. Adesina requested the attendees formulate and send him a memorandum, which will be the starting point for Dr. Adesina and his team when they come to the next Afrolynk conference in August.
This meet up was also the opportunity for Dr Adesina and GreenTec Capital CEO, Erick Yong, to discuss new investment approaches that are better tailored to the needs of African startups. Erick underlined the necessity to create local value through knowledge transfer and to increase the number of qualitative projects eligible for the Fund’s focus in Africa.
Erick said ”I am very happy to see that the AfDB is keenly aware of the challenges caused by the structural limitations of classic funds when it comes to African start-ups, and for the acknowledgement that they are actively willing to investigate other solutions focusing on transformation and investment”.
GreenTec Capital specifically designed its investment model to address these problems and help companies grow and develop beyond the accelerator stage through the “valley of death”. Beyond just financing, African start-ups also need capacity building and knowledge transfer to increase their potential to take larger shares their value chains.
“The issues highlighted here are some of the reasons why we are also in the process of launching our own fund, with a proven concept specifically design to address the challenges of transformation and the financing African start-ups” said Erick Yong
We look forward to the development more innovative approached that will follow the path of GreenTec Capital to reinvent financing mechanisms to help and promote start-ups in Africa.