By Zandile Majavu
A strong venture capital market is needed across the continent to build the next generation of successful entrepreneurs, says African Bank CEO Zweli Manyathi. “For those of you who do not know, African Bank is a story of black entrepreneurs who, at the time, experienced the inability to access funding from the traditional banks in the country, and they thought it was important for them to set up a bank of their own, so it is very difficult for me to speak about building sustainable businesses without going into the history of my bank,” Manyathi said.
He was speaking at the Global Entrepreneurship Congress in Cape Town this week, where more than 50 African nations gathered for two days to advance entrepreneurial activity in their countries. Manyathi gave an example of the tech industry in the US, where emerging, small, and big tech, specifically in Silicon Valley, was operating in a space where it was very easy for good ideas to have easy access to capital. “And the notion that big ideas do not get accelerated too fast, but rather they get incubated, accelerated, and reincubated and accelerated, that creates the resilience that is required for an idea to mature to a point where it can be put in front of investors as well as funders,” Manyathi said.
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He contrasted the tech industry structure that existed in the US with the notion of entrepreneurs that were distributed along the pyramid, where big multinational corporations were at the apex, listed companies in the middle, and small businesses at the bottom. The enterprises at the bottom were neglected and struggled to access funding. He highlighted that Africa was missing strong venture capital, and this remained one of the issues the continent needed to solve. “As a bank, yes, we are regulated, we cannot put our capital into venture capital. But as African Bank, we are figuring out how to do it. “African Bank alone is not going to solve this problem. We need all the minds of financial institutions of the continent who must together not wait for investors but create a platform for that venture capital fund to exist on the continent,” he further said.
A one-stop shop was also needed where entrepreneurs could receive non-financial support. Manyathi said that this was why the bank would launch a business and entrepreneurial platform that would provide the non-financial support that businesses needed in the shared services space. “And we seek to do this because, having been an entrepreneur myself, I can remember looking for the services of different kinds of people. I had a VAT problem and needed someone to sort it out, then I had a provisional tax issue, and I also needed someone to sort it out,” he said.
Meanwhile, Deputy President Paul Mashatile told the conference that Africa was overflowing with untapped potential. It was a hub of innovation and invention waiting to be re-awakened. “Africa, however, still plays a subordinate role in global value chains and is confronted by deeply established structural constraints that stem from our previous position as an exporter of unprocessed raw commodities. We do not yet have a sufficiently diversified export basket due to industrialisation,” Mashatile said. He conceded that the continent remained vulnerable to the ebbs and flows of global commodity cycles and had been slow in transitioning towards higher-productivity economic activities.
