How Africa’s ‘Brain Drain’ Could Be the Key to Successful Crowdfunding
By Zarreen Kamalie
The migration of skilled peoples from Africa to other, often more developed, parts of the world is not phenomenally new. Currently there are conflicting claims on whether the migration of skilled professionals is coming or going, but it most certainly has not died out. This loss of skills and professionalism has been termed, the African ‘Brain Drain’.
On the other hand, the migration of professionals and skilled persons from Africa has resulted in a growing diaspora that contribute to a substantial platform of potential investors for social enterprises based in Africa. Lack of access to investment from local banks is a common problem for small businesses and ventures, such that crowdfunding appears as an increasingly attractive alternative. Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet. This could mean that Africa’s brain drain could help provide the right conditions for social entrepreneurship. These financing techniques are fostering an interest in Africa not only as a place to invest in but also, ironically, as a destination for African migrants who once felt they had to leave for greener pastures.
Dr. Menghis Bairu, founder and CEO of Serenus Biotherapeutics, is convinced that “it’s not just a matter of attracting African expatriates home”. That instead, we should also be working to “attract talented professional from developed nations who have a passion for the continent and find rewards in being challenged to build, contribute and grow”. Crowdfunding, or as later explained, ‘crowd investing’ is quickly becoming a globally accessible means to not only engage with enterprises in Africa but to engage with the formation of the new social and professional landscape itself.
Yet, there still remain a number of obstacles that impinge the impact that crowdfunded social enterprises could have on the continent. According to
Laura DeLuca, PhD, assistant professor of Environmental, Peace Studies and Social Entrepreneurship at Naropa University, these are the occurrences of prominent African social entrepreneurs that move to the West after attending accelerators or incubators, contributing to the African Brain Drain. As well as low bandwidth and unreliable electricity that jeopardise access to entrepreneurial resources on the Internet, and lastly, the fact that crowdfunding through Internet platforms has not become firmly entrenched in entrepreneurial practice in Africa. DeLuca is convinced that crowdfunding, or raising monetary contributions from a large number of people, typically via the Internet, is a foreign concept in many parts of the African continent.
Though this is not to say that crowdfunding has not made its mark in Africa. Cameroonian Georges Badjang and his honey production business, Les Mielleries may never have been able to take off if it wasn’t for crowdfunding platform BlueBees. After his local bank turned him away, Badjang was able to acquire the appropriate funds through the platform that specializes in entrepreneurs from developing countries, connecting them with investors from Europe. Other platforms, including Fadev and Babyloan, have begun to offer opportunities for small African businesses by accessing the African Diaspora as a source of potential investors. This technique of targeting the African Diaspora has also been employed by Elizabeth Howard, co-founder of Lelapa Fund, an organisation that targets Africans living abroad who want to invest in and support projects “back home” identifies the platform as ‘crowd investing’.
“the best investors in Africa are Africans themselves”
Howard seems to believe that, unlike European investors or contributing parties, members of the African diaspora perceive fewer barriers to involving themselves with African projects than foreign investors. South African investor Patrick Schofield further iterates her point, stating that “it is no coincidence, said, because it is not easy to work directly out of Africa…[and] it can be expensive sending money to Africa and there is also uncertainty as well”. Howard explains the incentive behind ‘crowd investing’ with the statement, “the best investors in Africa are Africans themselves”.