The African continent’s start-up scene is busy and innovative, still more than 80% of foreign direct investment is received by just four countries. Nigeria, Kenya, South Africa, and Egypt are the most attractive nations for foreign investors. How the big-four got to where they are now and how RiceAfrika revolutionized the Nigerian rice production will be further explained in this article.
Comparing the individual countries shows that some characteristics seem to be important for securing FDIs. For starters they are among the largest economies on the African continent, indicating that a strong foundation attracts investors more. Not only the economy of these nations is large but also the population, as well as the expected growth rate of the populations. To give an example, Nigeria is expected to double it’s 200 million population in the next 20 years, meaning investment there will have a big market.
Population and economy size aren’t the only important factors though. The fintech sector is the biggest and attracts the most FDIs, therefore countries lacking in that sector will not get the funding power of strong fintech nations. Additionally, the usual factors like political stability, decent infrastructure and stable financial systems add to the attractiveness of the big-four.
To begin with, nations that do not belong to the big four can adapt their legal framework to tempt foreign investors, as well as giving fiscal incentives benefiting the factors mentioned above in return. Ambitious but nowhere near as successful as the big four are Morocco, Tunisia and Ghana, they receive the majority of FDIs that the big-four don’t swallow.
Source: www.twitter.com / calvinwjoseph
Let’s take a look at Riceafrika, a Nigerian start-up that succeeded in revolutionizing the rice production and how everyone benefits from their solution. The founders took the problem of African farming into account and wanted to erase as many as possible. While the agricultural sector makes up more than 60% of the continent’s economy it is struggling due to climate change, low productivity, poor infrastructure, and a subordinate position when negotiating prices with buyers.
In order to combat these problems, the company has implemented multiple strategies under the vision of an Africa that can supply itself and the world. Working against climate change is hard, but data driven plantation of seeds, provision of an app that shows weather data and soil analysis, as well as climate friendly agriculture, of which future generations will benefit, are ways of dealing with the increasing temperature of our planet.
Renting out highly efficient combine harvesters does not only increase efficiency of the yield but also reduces the hours farmers spend with the harvest drastically. The newly installed mobile merchant system means that farmers travel less time to markets and get fixed premium rates by RiceAfrika. They can offer premium rates as they buy enough rice to be on par with big buyers from abroad. Additionally, they try to get youths interested in rice farming to secure future success of their sector.
Their success in Nigeria has allowed them to expand their business to Tanzania, giving a bright outlook on the future of RiceAfrika.