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Monday, 19 June 2017

Academics and business still don’t speak the same language on Africa

Reading an op-ed this morning in the Financial Times, it was hard not to ask: Why doacademics insist on making declarations such as, “African PE must rise to the challenge of job creation”? All PE needs to do is turn a profit, and do so responsibly. Someday, an academic will learn to frame his or her argument not in hectoring tones about the “need” for PE to invest in manufacturing, but on two fronts: First, the “need” for government to give incentives to PE to invest in companies that create jobs (and to clear obstacles to investment at the same time). Second, by learning to make an actual investment case to business.

The author takes eight paragraphs — and invokes Malthus — to argue why PE needs to invest in African manufacturing to help solve our continent’s woes. One paragraph to quantifying who bad a job GPs are doing. And all of three paragraphs outlining why this might be the case and what might be done for it. And what is the solution, you ask? “Middle market funds, in particular, have an enormous opportunity to unlock potential in this sector. Doing so will not only create value for investors by creating a robust pipeline with attractive exit opportunities; it will also help to address the critical job-creation challenge facing the continent.” Don’t get us started on those attractive exit opportunities.

Someday, business and the academy will learn to speak each other’s language. And some day, academics and wannabees in business will both stop referring to Africa as if we’re a single country. That day isn’t today.

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