A Christian Economic Forum White Paper
by Henry Kaestner
Summary
This is the time for a Christ follower to pray intently about investing in Africa. The demographic, spiritual and economic cases are compelling, especially when considered together, and I believe that most would find it very hard to find a better place to allocate their risk capital (capital above and beyond what we need to live on), especially as they think and pray more about what risk capital means.
Introduction and 10 Reasons
Recently, I stepped into an office building in downtown Nairobi during a visit to Kenya. Dr. Kamau Kachigi greeted me with a smile and a warm welcome. He toured me around Gearbox, his high-tech, 20,000-square-foot maker-space which provides access to state-of-the-art materials and equipment. This remarkable space provides entrepreneurs with a prototype which they can then use as a proof of concept to test the market. Innovations that started at Gearbox have gone on to serve populations across the continent.
Companies like Sign-IO which has developed an assistive wearable technology that translates sign language into speech. It comprises a pair of gloves, which capture the sign language gestures, with a companion mobile application that is paired to the gloves via Bluetooth. The mobile app vocalizes the signed gestures in real-time thereby enabling seamless communication between sign-language and non-sign-language users.
As impressive as this facility is, what struck me most deeply was what Dr. Kamau attributed his success to, “What inspires me is that I’m a Christian, and I feel an urgency for people to understand who Jesus Christ is.”
My 2022 CEF White Paper was about risk, and how a Christ follower might think differently about risk than someone who doesn’t yet have faith in God. An approach to capital allocation fuelled with joy and gratitude, coupled with faith and obedience comes with the realization of the cost that God has paid to give us the gift of life, now and for eternity.
In this year’s whitepaper, I want to look at where we might invest our capital now that we have a different idea of what risk looks like. Africa.
As a Christ follower, is my greatest risk not getting what the West would suggest and defines as the right risk-adjusted return?….or is it a greater risk to get to Heaven and have God ask me why I didn’t invest in Africa knowing what I list below? Have I/we been thinking the wrong way about risk-adjusted returns all along?
There are many places for a Faith Driven Investor (FDI) to deploy capital, AND as compelled as I am about the case for investing in Africa, let me first sell you on getting down on your knees to ask God how He would have you deploy His capital and whether He would have you do it in such a way that brings about His Kingdom. The Faith Driven Investing movement should not be more prescriptive than that simple act. But, let me also encourage you to ask God during that process whether Africa might be a part of His plan for you as you invest that capital 🙂
If the answer is yes, you will be a part of a movement of FDIs that have the opportunity to establish a modern marketplace in a continent approaching 2 billion people while lifting many of them out of poverty (financial and spiritual), while alleviating some of your own.
There are 10 reasons why I am looking to allocate the majority of my new risk capital to Africa, and I submit them to you as a framework to think and pray through as well:
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Love God.
Love Neighbor. Scripture gives me a broader understanding of who my neighbor is including those from other nations (Luke 10:25) and I am to love my neighbor. A great way to Love is to provide opportunity…the kind that investments provide. A belief is that investments provide dignity, whereas giving alone can produce dependency.
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The poor.
I need to remember to take care of the poor…..the very thing I should be eager to do (Gal 2:10). I’m an investor. I like scale. I like leverage. I believe that each $1 of investment capital will go much further in Africa to the end of loving my neighbor than anywhere else…… further in impact as the secular world would see it…..further in discipleship/evangelism impact ….and further in alpha.
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Discipleship and Evangelism.
Spiritual integration in the marketplace comes MUCH more naturally to Africans than it does to Westerners. More on that below.
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Demographics.
The number of entrants into the marketplace that will both produce and consume is unparalleled anywhere on Earth. 54% of the world’s population growth will occur in Africa through 2050 with an average age of less than 21.
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Political stability.
No, not what it is in the West (though better than France?? :)), and yet, MUCH better than where it’s been. Peaceful elections in Nigeria and Kenya give near-term optimism, African countries invading each other is exceedingly rare.
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Leapfrog advancement.
Africa didn’t need to build out legacy wired telecom, and so they became leaders in innovations around wireless communications, witnessing Safaricom and Mpesa. This trend continues in Africa becoming a worldwide leader in fintech.
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The Trend.
Africa is already moving. 7 unicorns over the past few years, 2 in particular, illustrate more of what Africa does as well as, or better than most: Andela (labor and tech) and Flutterwave (fintech).
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Deal Flow.
In my opinion, a mismatch between the quality of opportunities and the availability of capital. Easier to get access to great deals in rounds led by reputable institutions with good track records. The same pressures that have held you back from investing in Africa are those that have held back others. Over the past business cycle, less than .5% of the world’s PE and VC has flowed into a continent with 5% of the world’s GDP. That is changing. Will Christians jump in early, as we did in the 1800s industries of schools and hospitals in Africa, or will we jump in later once the secular folks have led the way as we have done thus far in ESG and impact investing?
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Alpha.
I actually think that despite risks that come from currency devaluations, I CAN make great financial returns, which can be plowed back into Africa with yet more investment, and select giving opportunities.
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Risk.
As mentioned above, it might be too risky NOT to.
Before I go on. Again……don’t let me prescribe or presume how you invest your money. But do allow me to challenge you to bring this framework to God in prayer along with your spouse, or your investment committee.
Time in God’s word together with prayer will help you to understand how numbers 1-2,10 impact how you allocate risk capital. Couple that prayer with readily available research for Numbers 5-9 and you’ll know how to allocate capital with your heart and your head. It’s number 4 that I want to unpack a bit and then leave you with an illustration from Christopher Columbus, an exhortation from Efosa Ojomo and some potential next steps.
Spiritual integration in the marketplace comes MUCH more naturally to Africans than it does to Westerners. (#4 from above)
One argument FOR investment in entrepreneurs in Africa that you aren’t likely to see covered in the Economist, Foreign Affairs, Peter Zeihan, or even in Clayton Christenson and Efosa Ojomo’s excellent work, “The Prosperity Paradox” is how they DON’T suffer from the same disease that we continued to suffer from here in the West. That disease is Evangelical Gnosticism which I first learned of in Brian Fikkert’s book “Becoming Whole”. Its relative absence from Africa is why I have my greatest hope for a marketplace that will look most like the Kingdom of God over the next 25 years, whereas one millennium of bad theology has made it so difficult to achieve in the West.
A heresy known in the early church was Gnosticism, effectively the separation of the spiritual and the material worlds. This was a legacy to the way that the Greeks saw the world, and as the Greek (the language of the New Testament) led the Western world to come to faith, much of this way of thinking left its impact on those in the marketplace and still does. We see it when we go to Church on Sunday and then maybe even have a small group on Wednesday, but when really challenged on the topic, we don’t see how our businesses impact God’s Kingdom. We’ve bought into a Spiritual-Secular divide, much like our Greek ancestors. I likely don’t need to expound on this. Any Western reader of this whitepaper will know what I am talking about and seen countless examples, likely without needing to look beyond the mirror. I know that’s the case for me.
Many Western missiologists are familiar with the concept of Syncretism, which is the combination of different faith systems that we see as new communities in the developing world
convert to Christianity. It’s the vestiges of the caste system in new Indian Christians, or the incorporation of animist beliefs alongside Catholicism in places like Chiapas, Mexico. We are aware of this syncretism because it’s so different from what we experience in the United States. And yet, we are no more immune to it, we just don’t realize it because it’s the water that we are swimming in.
Not so, Africans, most of whom have descended not from the Greek Philosophers, but from tribal religions that believed in the integration of the material and spiritual realms. An African from a tribal religion doesn’t think anything of consulting a witch doctor for business success and then putting up an idol in their window to promote business favor or receive a ground-up powder to sprinkle on the products of a competitor.
Bring those same people to Christianity and allow them to see the beautiful and good news of the Gospel and it’s no revelation to them that their faith impacts their business. It’s in their blood and their culture. They pray before business meetings regularly. They talk about Scripture. They fast for their business. Yes, to be clear, there are issues, like the Prosperity Gospel that a Western visitor to the African marketplace might see with some. Take an African visitor to the Western marketplace though and there is likely equal or more amazement by how we, despite our professed faith in an almighty God, have such an issue integrating our faith in it. How we don’t naturally talk about our faith with others and see clearly how our businesses matter to God. How our time in the marketplace is of course part of God’s redemptive work in bringing the Good News to the Agora and making products and services and loving on those we encounter as a part of bringing God’s Kingdom on Earth as it is in Heaven.
The Lessons of Christopher Columbus
In 2021, Finny Kuruvilla, the CIO of Eventide gave a talk at the Faith Driven investor conference in which he examined the influence of capital on new markets. He talked about how Christopher Columbus, an entrepreneur from Genoa, tried to raise capital for his venture, first, presumably from people he knew in Genoa, and then from the Spanish (who said “no” at first) and then the British, and the Portuguese. Eventually, on a second trip to Spain, the royal family said “yes”. And that is why 500+ years on they speak Spanish in Bolivia, Ecuador, Argentina, and most of the other South American countries. They should be speaking Genoese.
So, the question I leave you all with is this: What language will they be speaking in Africa in 25 years? Will they be speaking Secular or will they be speaking Christian? Will they be speaking a language, as most of us do in the West of profit being the sole purpose of business, where an
expanding gap between the rich and the poor develops, or maybe they will be speaking the language of Chinese Communism? Will they be speaking Arabic and Shariya compliance? Or, will they be speaking Christian…..a language of making products and services that are redemptive, focused on bringing about God’s Kingdom on Earth in a way that bears witness to the King? Will they endeavor, through their enterprise, to love God, know their enterprise is
really His, and then look to love their partners, vendors, customers, and employees as they love themselves?
You, if you think and pray about it, know what the answer could be, should be. But, it doesn’t happen if you don’t get involved. There are an infinite number of reasons not to. It’s easy to get conformed to the patterns of the world and traditional investment opportunities right in our backyard. But God didn’t create just the West, He gave the West opportunities and wealth beyond that which the West needs. Why did he create Africa? Why did he put you, your vocation, and your financial resources on this Earth with Africa on it at such a time as this? Worth mentioning again: don’t let me prescribe or presume how you process this any more than I might have in this paper, other than to challenge you, together with your spouse, or your investment committee, to get down on your knees and ask God if He would have you get in the game, and bring your light, the light He has placed in you, to shine in that awesome Continent of resources and opportunity.
A word of warning to us all though as we do intentionally invest our time and resources in this awesome continent lest we do more harm than good: More than 90% of the native population of the countries visited by the 15th-century explorers were wiped out by disease.
Will Africans in the marketplace be conformed, as so many of us, to the patterns of the world? Will they, like so many of us, have our seed choked out by the “worries of the world and the deceitfulness of riches?” Do we as Christ followers have a role to play in building relationships as we invest with these new marketplace participants to warn them of the perils of marketplace success as we check for signs of this disease in ourselves? Might we, in the process, become more immune to these thorns that threaten to choke us out as we seek to love our neighbor and re-examine how we think about risk capital?
It’s my hope that we might invest in entrepreneurs like Dr. Kamau in humility and mutuality. We invest not from a place of arrogance or superiority, but from a place of curiosity and excitement to see how we might be changed alongside those we invest in.
How far can our light shine on the batteries in our flashlight?
One last perspective from an expert in the space who brings another lesson from Scripture to bear. We’ve been blessed to have the author and Kellogg professor, Efosa Ojomo at several Faith Driven Investor Conferences over the past several years. As the Director of the Clayton
Christensen Institute for Global Prosperity, he has made the secular case for investing in Africa far better than I can and has done so winsomely in past FDI conferences, but it was his talk last year in which he talked about Matthew 5: 14-16 that impacts me the most and compels me to shine my light, my time, my prayer and my financial resources where there is greatest darkness.
I had started my quest to invest in Africa believing that my small light in what has been unfairly called the Dark Continent would make an impact. I’ve actually come to understand something much different. It’s the increasing number of lights in Africa, and their strength that is helping me to see the darkness I had/have experienced in my life, and rather than absorbing the light I have, are amplifying it, bringing me joy, purpose, mission and a closer relationship with the Father as I steward His resources for Him in a way that He is leading me after I asked Him. My belief is that the same will happen for you.
Today, we have not one special guest but two for you to hear from. We are talking with Will Thomas and Dean Macfarlan down in the heart of Texas. They’re both accomplished investors on their own, but what makes the story even more compelling is that they’re a part of a new movement of City Networks where like-minded Faith Driven Investors are uniting to do more together than they might be able to do apart.