Investment approaches for financial dry season
THE oil sector and champion African business visionaries have led the way to a long wave of unprecedented gains on the continent.
My work on, and with the continent has been mutually bountiful, as I have engaged in the public, private, Non Governmental Organisation (NGO) and academic sectors. So permit me to highlight some pivots as the long wave of unprecedented prosperity begins to crest.
When I have engaged potential businessmen or investors; here are some of the limiting trends I have encountered repeatedly.
Number one: Every investor wants to be Chief. There is often great pride in 100 per cent ownership of a company, property, or investment. The challenge is many successful investors who have weathered many economic cycles, will tell you it is better to join an investment club, or to become an investor partner. This allows the investors to learn from each other, invest across an array of projects or funds, and build the necessary trust over time for even more lucrative endeavors. So, think of investor partnerships as ”Council of Chiefs”, rather than wanting to be a Chief solely of your domain.
Number two: Investors want to fund their own Dreams. I often hear about excellent projects that the African investors are pursuing. That entrepreneurial spirit is essential for growing both local and national economies. While it is important to have laser focus on ambitions, a little investment outside of the “Dream Endeavor” can generate additional funds that can be reinvested into the Dream. Also, some investments with partners allow some of the other “Chiefs” to learn more intimately about your project and help you establish more support. Or perhaps, you are not at the stage of wanting to share your Dream, but you are in a group of like-minded people from whom you can learn and remain inspired.
Number three: Investors expect Investment Incentives or the “Bells & Whistles”. Often times, I hear, well what gifts or perks do I get for investing? I tell them, very high returns, with low risk. What!?! There is no vacation, no gold watch? What kind of investment is this? And my reply is, “Exclusive; the money that would go into gifts is instead allocated into growing your returns. The gift is your partnership with the best and brightest investors and you are contributing, learning and earning amongst them.”
Number four: Investors have over reliance on the Billionaires. Across the continent, the Billionaires have made their mark and have been bold in their initiatives. Major infrastructure and country strategy projects have been championed by these greats. The cresting wave has impacted even them.
Understandably, many investors look to see what the “Really Big Boys” are doing. But the diversification of your own funds allows you to be on the cusp of what is new, while also investing in ways that are tried and true. The fickleness of the extractive industries might be a way of earning wealth, but is not a recipe for wealth management. And so, I write to you to reconsider your steadfast positions.
Often I hear a justification of, “Well, this is the African way”. And I ask, well how is that working for you now? And how can you make this last for the next generation and the advancement of your homeland? Investing in your dreams and your homeland is very important. Just recognize that a little diversification goes a long way and can accelerate your personal and country goals at home.
Page Jibrell is an Adjunct Professor of International Business at Howard