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As America Turns Its Gaze Toward Africa, It Has The Chance To Promote A New Model Of Investment

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This week U.S. investors and African leaders from the African continent will converge on Washington D.C. for the inaugural US - Africa Leader's Summit. The Summit, designed to promote trade and investment in Africa and encourage U.S. private sector investment in Africa, is a major step in the U.S.'s efforts to establish a new relationship in Africa -- with the hopes of counteracting China, who have been capitalizing on Africa's investment potential. What will they find? Undoubtedly, these U.S. investors will find an Africa that has enormous investment potential and with a population that is ready to break out. These U.S. investors will find an Africa that is hungry for U.S. investment, expertise, and rule of law. And as these U.S. investors engage, and high-return opportunities are spotted and due diligence has been conducted; memories of failed business interventions in Africa will be revived and old stereotypes will emerge.

And the same old question will arise:

How do I do business in the African context while upholding and promoting U.S. values and still compete?

As a U.S. citizen who has started a business in Ghana and has dealt with issues surrounding local and regional investment in Africa, I have seen U.S. investors both fail and succeed in attempts at their investments in Africa. One thing I have noticed is that the successful U.S. investors haven't changed their values to compete in Africa, however, they have adjusted their business model as it deals with Africa. They have implemented an investment model that takes social conditions as well as profit into account -- by setting a framework for sustainable inclusion in their investments. To be fair, some companies have involuntarily had to implement this new business model of investing -- driven by conditions on the ground that necessitate it prior to investment, or government imposed conditions, i.e., local content laws, that force a social benefit initiative in its tenets and execution. However, their mere implementation proves that it is an acceptable framework of doing business that cannot be ignored.

And as the U.S. Fortune 500 and U.S. private equity are set to turn its corporate gaze toward Africa, it has the chance to learn from previous investment attempts and promote this new model of interaction on the African continent. Luckily, for these U.S. investors, not only is there a name, extensive literature and an established infrastructure involving this new model of investment: impact investing; there is already a U.S. industry that has had success with this type of investment model in Africa: technology.

U.S. tech companies working in Africa are imbedded with these investment principles and know how to adapt to their on the ground environment and form the connections that make their investments work. These companies inherently work in a paradigm that encourages open collaboration with their respective communities that necessitates an investment structure with degree of social responsibility. Companies like Kiva, though not necessarily profit driven, invest in companies and work with entrepreneurs in Africa who have this model. Also, for-profit companies such as Microsoft (4Afrika) and Google (Africa Connected), have initiated social initiatives that are imbedded with their products that will eventually result in user familiarity, goodwill and increased profits.

Per the U.S. Administration, the theme of the Summit is, "investing in the future by discussing ways to stimulate growth, unlock opportunities and create an enabling environment for the next generation." It is my hope the U.S. Administration and private sector will use this gaze toward Africa as a watershed moment for that next generation in its economic relations with the African continent and use this opportunity to promote a new impact investment model based on the U.S. value of shared value.

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