Alot has changed from an ecosystem point of view but there is still alot that need to change .

Our year in review :

At the beginning of 2015 I shared our plans with DisruptAfrica and subsequently kicked off the “MeetInvestor series” for the publication and I am very happy to see the wonderful job that Tom and Gabriel have done with that platform .

We started a series of investment dinners called #FrontierInvestorsDinner in London and it was an excellent opportunity to curate great conversations and meet some people that are shaping our world today . Please see some of the photos from the July’s dinner with the Rwanda High Commissioner to the UKhere and we are looking forward to expanding this series to 5 cities around the world in 2016 .

AngelfairAfrica that took place in Accra, Ghana was the highlight of our events calendar because we were able to directly participate as investment partners and add value . Please find the full report and pictures here

NewGenFund was also established with the aim of investing in up to 10 over the next 18 months . The objective here is to give retail investors an opportunity to witness professional angel investing in practice. Our goal is to activate 1000 angels by 2020 .

In other news :

Africa Business Angel Network came alive in 2015 and run a number of workshops across the continent ,find out more about them here

Crowdfunding adoption is still low .

Infodev reports on lessons learned through East African startups, and it makes a very interesting reading , find the full report here

Predictions for state of Angel investing in 2016.

This is a long term play so hold tight because we are just getting started as an ecosystem so this is not the time for us to start cracking champagne .Having said that we expect the following things to happen :

• More deals will be done and they will be unprecedented in size. There are a few seed funds and micro funds have been raised capital in 2015 that will need to be deployed.
• More local investors will start doing some interesting deals , as more stories emerge.
• More corporate venture capital will be made available to more startups ,Safaricom and Interswitch have led the way but more corporates will be getting involved in 2016. You can read more about Safaricom’s CVC fund known as Spark here
• More impact investors will come out and stand up to be counted , our colleagues at RenewLLC have had a fantastic year and recently announced their 7th investment in Ethiopia .
• More small size acquisitions will be done in 2016 , looking at these top 5 acquisitions done in 2015 ( mind you that there were others that were completed but not publicly announced) . I can predict that more sub $20M deals will be done throughout the year across sub-Saharan Africa and North Africa .
• The three funds that I am really excited about are:
• 1)VentureGardenGroup -Nigeria
• 2)CRE Venture Capital -Pan-African
• 3)Chanzo_Capital -Ghana
• Last but not the least ,more governments will need to take a leaf out of Rwanda’s book and put together policies that are friendly to startups and investors .

If you Want a ticket to startup heavens, Here are 4+1 reasons to become an angel investor in Africa today .

How we made it in Africa also did a great feature on NewGenAngels and our progress so far ,please find it here

Wishing you a profitable #2016 !

By Sean Obedih, Founder, Diverse Code

London-based solar systems provider BBOXX – which designs, builds, distributes and finances solar systems for Africa and other parts of the developing world – has secured a further round of funding that will enable it to increase its solar efforts in Africa.

The British solar provider has raised $15 million via a series of equity investments and debt funding into the company from a wide range of investors, including DOEN Foundation, Synergy Energy, Bamboo Finance, Ceniarth, Khosla Impact Fund and new backers ENGIE Rassembleurs d’Energies and MacKinnon, Bennett & Co.

A portion of the funding will be used as scalable working capital, and $500,000 – provided via a securitization deal with social investor Oikocredit – will finance home solar systems in Africa via Distributed Energy Asset Receivables (DEARs), the first such securitization deal of its kind seen in Africa.

In closing this securitization, BBOXX will be able to realize income from the solar payment plan sales model that it has introduced in Africa three years ahead of schedule. The additional monies also free up investments for the production of more home solar systems, thus ensuring more families and households in Africa can receive affordable solar power.

“This latest round of funding, in particular the ground-breaking securitization deal with Oikocredit, means that we can now rapidly scale-up our business model and roll-out BBOXX across our key regions in Rwanda and Kenya,” said BBOXX CEO Mansoor Hamayun.

Oikocredit renewable energy manager David ten Kroode added that by demonstrating how securitization can be used to finance home solar systems in Africa, other lenders can hopefully follow suit in order to scale-up the level of investment in Africa’s energy landscape to the levels required to lift millions out of energy poverty.

“This deal also supports our mission of improving the lives of low income people by giving them access to clean energy,” ten Kroode said.

Bu Ian Clover.

This year marks the 20th year since Sub-Saharan Africa (SSA) embarked on a path of faster economic growth. Over this period, growth has averaged at 5,2% per annum, whereas the number of people on the continent reportedly living under US$1,25 a day has continued to creep up from 358 million in 1996 to 415 million in 2011; the year 2011 being the most recent year for which official estimates are available.

Can these divergent trends be explained?

The most obvious reason would be that all the benefits of growth were captured by the rich, resulting in ever-increasing inequality in each country — the rich are simply getting richer.

The data, however, doesn’t show much evidence of that. Distribution trends within African countries vary dramatically. The distribution is widening in as many countries as it is narrowing and in most countries it is not changing much at all.

It is possible that the very rich people, the top 1%, are benefiting from the share of the spoils of growth, by more than their fair share, but this is missing from the data as this rarified class tends not to participate in household surveys from which statistics and distributions are derived.

There are five other factors that can account for SSA’s alarming poverty numbers.

The first is the region’s rapid population growth of 2,6% a year. Incidentally, this correlates almost exactly to the average percentage increase of those living with less than US$1,25 per day from 1996 to 2011. While African economies are generating more income, that income has to be shared among an ever-increasing number of people.

Since the region’s income is growing faster than its population, average incomes are rising and the share of Africans living in extreme poverty is falling — from 60% in 1996 to 47% in 2011. But the rate at which poverty is falling is less than the rate at which the population is rising resulting in the number of people living in poverty continuing to grow.

In more general terms, SSA’s record of economic growth looks much less impressive in per capita terms. The World Bank has just released a revised growth forecast for the region in 2015 of 4%.

When you lop off 2,6% in population growth, you’re left with per capita income growth of only 1,4%, which in comparison to the world average where projected economic growth of 2,9% combined with population growth of 1,1% results in per capita income growth of 1,8% in 2015, is low. Africa’s growth this year, in per capita terms, is expected to be almost as much as 29% below the global average.

The second factor is the depth of Africa’s poverty compared to poverty elsewhere. In other words, poor people in Africa start further behind the poverty datum line than the rest of the world.

Therefore, even if their income is growing, it is rarely enough to push them over the US$1,25 threshold. In 2011, the average person living in extreme poverty in Africa lived on US$0,74 a day, whereas for the rest of the developing world it was 98 US cents.

The third factor is that even though inequality isn’t rising in most African countries, inequality is already at an unusually high level, making economic growth unable to deliver more poverty reduction, since the absolute increases in income associated with rising average incomes will be that much smaller for the have-nots versus the haves. Furthermore, the degree of inequality that exists on the continent is worse than it appears. The fact that Africa is divided into so many countries masks the big differences in incomes among them.

If Africa were a single country, its inequality would look much worse — worse even than Latin America. Since incomes across African people vary so widely, only a fraction of people are likely to cross the poverty line at any one time. That contrasts with India where a concentration of people immediately below the US$1,25 mark means that even a small increase in incomes can result in a sudden flood of people moving above the poverty line.

The above three factors explain why you would expect relatively little poverty reduction for a given amount of growth in Africa compared to elsewhere. These factors, nevertheless, cannot explain why the number of poor people in Africa has actually increased since the start of the century. For this, we consider the two final factors.

The fourth factor is that there is a degree of mismatch between where growth is occurring and where the poor are on the continent. Undoubtedly, the region’s growth acceleration has benefited some of its poorest countries, including Ethiopia, Mozambique and Rwanda, whereas, others such as the Democratic Republic of the Congo and Madagascar have recorded little or no growth over the past 20 years and the number of poor people in these countries has risen accordingly. As long as a handful of the region’s fragile states struggle to build and sustain economic momentum, the number of poor people in Africa will not decline.

The fifth and final factor concerns data quality. Poverty estimates are drawn from household surveys, which in most African countries are conducted infrequently. Those that do take place often suffer from operational glitches that affect the credibility of the results. In Nigeria, for example, which accounts for a quarter of the people on the continent living in poverty, there are some well-documented flaws within its most recent national survey of living standards (not to be confused with the issues concerning the country’s national accounts, which were recently rebased). When new data becomes available, one may discover that Nigeria’s poverty rate is considerably lower and has been falling at a faster pace than previously thought.

As a general rule, aggregate poverty numbers for Africa should be handled with care, and small increases or decreases should not be taken seriously.

The dissonance between Africa’s growth performance and its poverty numbers is a striking phenomenon that demands an explanation. While intuition may lead us to call into question the region’s growth — it only seems to benefit the rich, the quality of growth is deficient and growth numbers are exaggerated — the above five factors suggest that the answer can instead be found by analysing Africa’s poverty data more closely.

The same five factors can explain why this difference is unlikely to go away any time soon. The World Bank anticipates much of the same for the next few years: the number of poor people in Africa is expected to remain close to 400 million until 2020, despite a forecast of ongoing robust economic growth.

By Ritesh Anand