Opportunities in Africa Masked by Challenges

Afri-Spective by AVCA
3 min readOct 3, 2023

with Okechukwu (“Okey”) Enelamah, Founder and Chairman, African Capital Alliance

The global economy is still convalescing from the uncertainty brought on by COVID. From your perspective as a fund manager, how is West Africa recovering?

We’ve been operating on the continent and in West Africa for the last several years — over 25 years and counting. We’ve seen multiple cycles which means that you learn to take advantage of opportunities that come out of a crisis, and I think West Africa, if not the world as a whole, is facing one of those moments. In these moments you have to be contrarian in thought and be effective in action, which means that like, you know, the power of partnerships.

Let me tell you a story: Most people will think about how well we invested in the likes of the digital mobile license back in the day — they actually came out of a crisis. There was a crisis back in 1998 where Nigeria went through a transition and ultimately that government decided to privatise the telecoms infrastructure. And like I said, the rest is history. I do think that we’ll look back and say “Wow, this environment created some of the best opportunities we’ve seen on the continent in the last several years.”

Which sectors and regions should we be on the lookout for over the next few years in West Africa?

We’ve been investing for 25 years and one of the benefits of that is that you have a critical mass of data and statistics too reach some reasonable conclusions about what works, what hasn’t worked, and which sectors that you’ve had good success — and more importantly, why you are successful and therefore create a repeatable strategy.

I want to talk about the sector, technology and the digital economy that has emerged from investing through different phases. We started with basic infrastructure, and then we moved into data, from voice to digital. Now, we’re recognising the need for more critical digital infrastructure and sectors benefiting from telecoms and technology. Importantly, we’ve gained significant experience from investing across these cycles.

In private equity, it’s all about having the right team, seizing opportunities, and having the necessary capital. When these three elements come together, that’s when you hit the sweet spot. We’re currently identifying several sweet spots, such as telecoms, technology, and digital infrastructure. We have the team, see the opportunities, and are hopeful that the capital will flow in as well.

Speaking of energy, we’ve been involved for 25 years. We’ve successfully invested in various aspects of energy, both in its fundamental form and in the context of the energy transition driven by climate change and clean energy. Over the years, we’ve gathered critical mass statistics and insights on what works and what doesn’t in different sectors.

The energy transition and the broader issues related to climate change and sustainability are not going away. It’s not a matter of whether to engage but how to make the most of these opportunities. It’s not optional; it’s a necessity.

Switching to the African context, Nigeria can be seen as a leader on the continent. It’s crucial to understand that this transition is a journey, not an either-or situation. It’s like moving from point A to point B, and the speed and depth of this journey depend on various factors and stakeholders. We need the public sector to create an enabling environment, and global players and stakeholders in the climate sector must realise that this is indeed a transition.

When considering energy sources, it’s not just about fossil fuels versus gas versus clean energy; they’re all relevant in their own ways. The world is also recalibrating due to geopolitical tensions. The real question is how we can maximise the opportunities in this changing landscape.

Innovation is crucial, and we must attract more capital to Africa. It’s not just about talking; we need investors to come in with their resources and commitment. The good news is that more and more players are showing interest in Africa. We are actively involved in an energy initiative and fund, collaborating with multiple partners. Our goal is to play a significant role in this transition.

We might need to invest in transition energy sources like gas, but we also see a promising future in clean energy. Regarding the question of bankability, I believe that ultimately, it will become a bankable proposition. However, we must consider all factors, including carbon credits, as part of the bankability equation. When you add up all these elements, the outlook becomes positive.