Ghanaian business leader Sir Sam Jonah has challenged African institutional investors to put more of their capital to work on the continent, warning that Africa is caught in a cycle of exporting its savings while borrowing expensive capital from abroad.
He said the situation was widening the continent’s infrastructure financing gap while leaving promising African businesses struggling to access long-term funding.
Delivering the keynote address at the Global Business Forum – Ghana Edition on Friday, August 28, Sir Sam Jonah described the situation as Africa’s “great paradox”.
“Here is our great paradox: Africa exports its savings and imports expensive capital. Our pension funds and institutional pools sit in short-term instruments while our infrastructure gap widens and our best entrepreneurs go begging — and we then borrow our own money back from abroad at punishing rates,” he said.
“No continent in history has industrialised on rented capital alone,” he added.
Sir Sam Jonah said foreign investment remained important and welcomed the contribution of international investors to Africa’s development.
He noted that he had spent much of his career raising foreign investment, partnering with international investors and deploying their capital.
However, he said African countries and investors must demonstrate greater confidence in their own economies.
“Capital follows conviction; it does not substitute for it,” he said.
Using an analogy, Sir Sam Jonah said investors were more likely to commit funds when they saw African investors and institutions taking risks in their own markets.
“Investors, like dinner guests, come far more readily to a table where the host is already seated and eating,” he said.
Sir Sam Jonah also called for the creation of more African companies capable of competing globally, creating jobs and growing over the long term.
He cited his experience with Ashanti Goldfields, which became the first operating African company to be listed on the New York Stock Exchange, as evidence that African businesses could compete on the global stage when properly built and managed.
“The lesson was not that we needed New York’s validation. The lesson was that an African enterprise, properly built and boldly led, could stand anywhere on earth and look anyone in the eye,” he said.
He said Africa needed hundreds more companies of that scale across strategic sectors.
“We need a hundred more such firms. A thousand. In agribusiness, in finance, in energy, in technology, in manufacturing,” he said.
According to him, building such businesses should not be left entirely to governments.
“Building them is not the government’s job. It is ours — the people in this room,” he said.
Sir Sam Jonah further urged African investors to embrace patient capital and take positions in promising businesses before risks were completely eliminated.
He argued that investors willing to properly assess and price risks at an early stage could benefit significantly from Africa’s long-term growth opportunities.
“The best-performing opportunities of the coming decades will not belong to those who arrive after the risk has gone. They will belong to those who priced the risk correctly while others were still afraid,” he said.
