How to overcome the challenges of investing in Africa - Rakesh Wahi

The Africa Investment Forum recently took place in Couting, with numerous heads of multi-laterals and development finance institutions (DFIs) converging to explore investment opportunities across the continent. CNBC Africa's Christy Cole caught up with Rakesh Wahi, the Vice Chairman and Co-founder of ABN, on the sidelines of the forum to discuss key challenges and potential solutions for investing in Africa. Wahi highlighted several critical points that could help overcome barriers and drive investment in the region. One of the key themes that emerged from the interview was the importance of creating a welcoming environment for investors entering emerging markets like Africa. Wahi emphasized the significance of governments in Sub-Saharan Africa fostering a conducive atmosphere that attracts foreign investments. He stressed that the initial impression an investor receives plays a pivotal role in shaping their perception and willingness to invest in a particular country. Wahi also underscored the collective responsibility of Africans in promoting a consistent message about the region's investment-friendly landscape, emphasizing the need for continuity and consistency in government policies to build investor confidence. Additionally, he discussed the importance of adapting regulations to accommodate technological advancements and consumer preferences, especially in sectors like education. Wahi pointed out that outdated regulations could hinder the growth of industries, emphasizing the need for a forward-thinking approach to regulatory frameworks. The high cost of capital, particularly for small businesses, was identified as a major impediment to economic growth in Africa. Wahi highlighted the exorbitant interest rates in countries like Ghana and Nigeria, which pose challenges for entrepreneurs seeking to finance long-term projects. He emphasized the urgent need to reduce the cost of capital to stimulate growth in the SME sector and drive job creation across the continent. Reflecting on the AFDB's approach, Wahi commended the establishment of developmental capital to assist organizations in structuring their deals effectively. He noted that the AFDB's holistic approach, which involves a developmental team working closely with stakeholders to streamline the investment process, could accelerate deal closures and drive real actions rather than mere discussions. The forum's emphasis on bringing diverse financial institutions, insurance agencies, and Exim Banks to the table was lauded by Wahi as a unique opportunity for investors to engage with potential funders directly. By aligning documentation and stakeholder interests, the AFDB aims to expedite investment transactions and catalyze economic development across Africa.