That's essentially the message contained in a recent New York Times column by Tom Friedman entitled "Patient Capital for an Africa that Can't Wait". The author of the "World Is Flat", as always, brilliantly articulates the business ethos of the region.
Africa, he says, is in a middle place in the global economy,
"a wild, unregulated, informal, individual brand of capitalism, which we need to channel into formal companies that can grow and scale up, even with corrupt governance." ... "People grow out of poverty when they create small businesses that employ their neighbors. Nothing else lasts."
From IFC, one can still literally hear the applause: "way to go, Tom"; "right on, man"; "yesss, tell'em, it's about jobs and about scaling up small businesses." [Okay, there were also a couple of grumpy comments from our private sector development purists, as in: "who's the "we" in the "we need to channel" part of the sentence, Tom?," and thanks for specifying that capitalists can help start and run legal companies, Tom.]
Overall though, that is the sum of IFC experience and activities in Africa: investing in the expansion of companies such as the one mentioned in Friedman's column, Kenya's Advanced Bio-Extracts company. Like many small companies in Africa, ABE failed to get financial backing and credit from banks because of a lack of track record and collateral.
IFC was among those who stepped in with an investment in ABE, then helped bring in other financial investors like the Acumen Fund to partner in the project. Unlike ABE, whose CEO Patrick Henfrey worked at IFC for 11 years, many companies in Africa lack the financial know-how. They seek IFC as much for training and advice as they do for credit and support.
Backing Africa's small companies pays dividends in terms of development impact too. As Friedman mentions, ABE employs over 150 people in one of their factories and has contracted with several thousand farmers to grow the anti-malarial plant artemisia in Kenya and the neighboring countries of Tanzania and Uganda.
In Africa, both the investment and development potential is enormous.....and as Friedman says, what it needs now is many good capitalists.