Making an Impact

Brazil boasts Latin America’s largest start-up ecosystem, while Portugal itself has a vibrant tech sector, and the CPLP is working hard to realize the potential of its African counterparts. Enabling cooperation across key areas, ranging from science and technology to culture, communication, and administration, impact investment capable of giving direction and depth to the respective economies of Lusophone Africa and fostering broader social welfare is hugely important. At the heart of such investment is the capacity to fuel start-ups and incubators, sectors that cause competition to flourish.

Understanding the challenges

The language barrier is a challenge, as many firms from the continent, as well as from Asia and Europe, opt to locate to neighboring English-speaking countries from which they service Lusophones. Moreover, much, if not all, of the literature in the technology sector is published in English, though mitigating initiatives have included certain developers in Mozambique publishing in Portuguese. Then there’s the commercial environment, where FDI is put off by structural problems in certain nations such as exchange regimes curbing repatriation of capital, an investment staple worldwide.

Small steps toward a larger ecosystem

Orange Corners is a pan-African program funded by the Dutch government that supports entrepreneurship through a knowledge program and networking facilities to bridge start-ups and funding. Other notable developments thus far are Angola’s first incubator, KiandaHub, and Acelera Angola, a news portal dedicated to entrepreneurship. In 2017, the start-up studio Bantu Makers set up shop to assist young enterprises. In Mozambique, the Maputo-based consultancy IdeiaLab is another ecosystem catalyst for local SMEs, while Cape Verde hosted Startup Weekend to galvanize interested start-ups. Two examples are the local taxi app Taxi Already and Ifome, a food delivery service. In 2013, Cape Verde also factored entrepreneurship into its education system. Though the country has suffered from brain drain, one young star who has stayed behind is Pedro Lopes, who organized the nation’s first TEDx talk and went on to establish the youth organization Geração B-Bright to nurture entrepreneurial skills. In 2018, he was appointed the state secretary of innovation and technical training. That same year, Guinea Bissau’s entrepreneurial ecosystem gained fame as the country hosted the global start-up competition of Switzerland-based Seedstars, where agri-tech startup ‘Bandim Online’ went home with the prize.

Aid to growth

Lateral thinking has proposed an “if you can spend it, it must be cash” approach in Mozambique. Given the name “donor up” by a start-up called UX Information Technologies, the idea was to channel donor money into start-ups. If this sounds familiar, it is. It’s the old “teach a man to fish” in action, and was floated at the Seedstars Africa Summit in Mozambique in 2017.
Unemployment is substantial in Mozambique, and UX saw potential in establishing the job portal emprego.co.mz, which leveraged the state policy of providing jobs first to locals in order to promote fairer access to a limited pool of around 750,000 jobs. In Cape Verde, a green energy policy pledges to generate 100% of electricity from renewable resources by 2025. The “Climate Launchpad” has thus far resulted in four start-ups.

In the pipeline

As the year closed, the Lusophone countries appeared poised for a pipeline of USD5 billion in both private sector and private-public partnership (PPP) projects to stimulate economic growth. Meanwhile, a development finance compact between the African Development Bank, Portugal, and the Lusophone six was signed at the African Investment Forum in Johannesburg in November. It was noted that Lusophone countries were home to 267 million people worldwide and possessed substantial natural resources including oil and gas. These have not been exploited due to the lack of infrastructure that forthcoming investment could now reverse. The African Development Bank pledged financing guarantees to support projects also supported by Portugal, while Portuguese Development Finance Institution SOFID also pledged EUR20 million in credit lines for related projects. While the early shoots of entrepreneurial initiative are visible, forming development ecosystems will prove a long road for the Lusophone nations. One factor to watch is the policy of Brazil’s new president-elect Jair Bolsonaro toward his linguistic African compatriots.