Ignorance pushing deep-pocket investors away from high-yielding ICT

Ignorance is foreclosing investors with deep pockets from seeing untapped opportunities in the ICT industry, as they prefer to pump billions into markets they are familiar with.

“Our people need to understand that it is not easy to learn new ways of investing,” said Tomi Davies, president, African Business Angel Network (ABAN), in an interview with BusinessDay in Lagos.

“Nigerians are used to property investment. People do not understand that you can put N1 million in ICT and in the near future get N100 million in return,” Davies said.

He expressed disappointment that local investors are not very receptive to the idea of investing in new things, saying that there are investment opportunities in technology startups which can yield high revenue as well as develop the continent.

“The annoying thing is that the response to investing has been more by foreign Africans rather than the native Africans. Nigerians do not understand the Angel acceptance as much as they could. We have got only about half a dozen Nigerian Angel investors that are passionate about investing in startups,” he added.

Reports show Nigerians account for 60 percent of total property sales for in Dubai, spending $2 billion annually investing in Dubai property and up to $900 million on UK properties.

Similarly, hotels construction and remodeling has attracted significant investment of over $3 billion in the past five years, garnering local investors who see it as a better alternative to ICT, which according to Forbes is on a steady rise, with the global tech market growing by 5.5 percent in 2013 and further increasing by 6.7 percent last year. 

Peter Jack, director-general, National Information Technology Development Agency (NITDA), said that the time has come to tap into unexploited opportunities in tech startups.

“Africa has come of age and this is an opportunity for African developers and entrepreneurs to show to Africa and the rest of the world, their innovative products that address specific challenges within our continent and the potential export to other parts of the world with similar challenges.

“It is also an opportunity for African investors to tap into investing in the growth and improvement of our continent. In Nigeria, we have witnessed the emergence of Interswitch, Jumia, Paga, Wakanow, Jobberman, which are all doing well and generating huge revenues. One of the startup initiatives of Idea hubs has generated up to $10 million in investments,” Jack said, while speaking at the recently held 2015 Demo Africa event in Lagos.

Candace Jonson, president, European Business Angel Network (Eban), encouraged local investors to be excited about bringing about change.

“Being in Africa, you are experiencing the problems faced by many others and so you should be excited to invest and support emerging technology startups that will bring about huge change, help solve some of these issues and also give huge returns, so you get value for your money and time invested,” she said.

Jumoke Akiyode