Africa, continent rich in cultural diversity and natural resources, has long been a subject of discussion when it comes to economic supremacy. The concept of economic supremacy in Africa is multifaceted, involving a complex interplay of geopolitical, social, and economic factors that influence the continent’s position in the global economy.

The rule of law and the supremacy of the constitution are fundamental to establishing a stable economic environment. South Africa’s post-apartheid legal order is a prime example of this, where the supremacy of the constitution and the rule of law are upheld by an independent judiciary, free from executive influence. This legal framework provides a solid foundation for economic growth and development, ensuring that all economic activities are conducted within the bounds of the law, promoting fairness, and protecting investments.

However, the journey towards economic supremacy is not solely dependent on legal frameworks. It involves strategic economic planning, investment in human capital, and the development of infrastructure. African nations must leverage their abundant resources, both human and natural, to foster economic growth that is inclusive and sustainable.

One of the key strategies for achieving economic supremacy is regional integration. The African Continental Free Trade Area (AfCFTA) is a step in this direction, aiming to create a single market for goods and services, thereby increasing intra-African trade. By reducing trade barriers and harmonizing regulations, AfCFTA has the potential to significantly boost economic activity across the continent.

Investment in technology and innovation is also crucial. With a burgeoning youth population, Africa has the potential to become a hub for technological innovation. Investing in education and digital infrastructure can empower the youth to develop solutions that address local challenges while being globally competitive.

One of the most pressing challenges is political instability. Many African countries face issues such as conflict, weak governance, and lack of democratic processes, which can deter investment and hinder economic development. Political instability can disrupt the functioning of institutions and the implementation of economic policies, leading to uncertainty and risk for investors.

Corruption is another significant barrier that affects many African countries. It undermines trust in public institutions, diverts resources from essential services, and hampers efforts to achieve economic growth. Corruption also discourages foreign investment and skews the economic playing field, benefiting a few at the expense of the majority.

Infrastructure deficits are a critical challenge in Africa. Inadequate transport networks, energy supply, and digital connectivity impede trade, productivity, and access to markets. Investing in infrastructure is vital for facilitating economic activities and attracting investments that can drive growth and development.

Health challenges, including the high burden of diseases and recent pandemics, have profound implications for Africa’s economic aspirations. Health crises can strain already limited resources, reduce the workforce, and impact productivity, thereby slowing down economic progress.

Furthermore, unemployment and underemployment represent a significant challenge. Despite a large and growing workforce, many African countries struggle with high levels of joblessness, especially among the youth. This is exacerbated by a mismatch between education outcomes and the skills required in the labor market.

Achieving regional integration is a complex challenge due to the remnants of colonial legacies, diverse political and economic systems, and unforeseen developments in the international economy. Regional integration is essential for creating larger markets, enhancing trade, and fostering economic cooperation.

Moreover, good governance and the fight against corruption are essential for economic supremacy. Transparent and accountable governance systems attract foreign investments and aid in the efficient utilization of resources. The rule of law ensures that businesses operate in a predictable and secure environment, which is vital for economic stability and growth.

The rule of economic supremacy in Africa is not about dominance but about creating a sustainable and prosperous future for all its citizens. It requires a collaborative effort from all African nations to establish legal and economic frameworks that promote stability, growth, and equitable development. With the right policies and collective will, Africa can achieve economic supremacy that benefits not just the continent but the entire world.

Post: “Why are companies starting up, raising money and shutting down not too long after? I see 2 business types: there is the business of value and there is the business of valuation…” Click the link and watch the short video.

My Comment: The VC (venture capital) business model is different, and they’re not stupid. There are 3 types of investors – income chasers (like the dividend), value pickers (like beaten down dead assets which can rise) and growth makers (big return or die trying). VC is in that last segment. That does not mean the first two do not exist. Like I always remind in Tekedia Capital: we discourage people from using money for diapers and Indomie noodles to invest in fintech, crypto startups, etc.

Most people look at the VC business model from a linear angle of a typical asset class. The VC business model does not work that way. A fund manager who runs a fund of $10m is fine, if he invests in 10 companies (each $1m), and 8 fade , with two returning $200m. He is not interested that the ten “survive” with each returning $2m each. Most people think of “singles” which are 9% return, 8%, etc. That is not how VCs think. They go for BIG return or die trying; nothing in between.

South Africa’s Naspers  might have invested in 200 companies. But the Tencent investment which turned $33m to $127 Billion takes care of the losses. Peter Thiel’s $500k in Facebook which generated $billions is all that matters for that fund. In the Igbo Nation, it takes the killing of one leopard to be called a killer of leopards.

When I was in junior secondary, I learnt that atoms can neither be created nor destroyed. But in senior secondary, a new teacher in nuclear chemistry explained that you could actually do that. Traditional investing and modern VC investing do not follow the same laws! Traditional investing is about your profit while VC is about valuation (anchored on blitz-scaled revenue growth at all costs, not profit). For those VCs, it is about domination as they do not want to share unlike traditional investing! It is that mindset that makes America tech species dominant empires in tech.