Africa struggles to turn investor interest into bankable deals: IHC

PHILLIMON MHLANGA

Africa is struggling to convert growing global investor interest into tangible investment, with inadequate project preparation, limited access to reliable information and weak verification systems preventing promising opportunities from attracting capital.

Speaking at the CEO Africa Roundtable annual conference in Cape Town, South Africa, Benerdict Chisale, general manager of the Investor Hosting Centre (IHC), a Mauritius-headquartered digital investment facilitation platform, said the continent’s challenge was no longer simply attracting investors, but ensuring that projects were sufficiently developed, transparent and credible to secure funding.

“Global capital is looking for Africa, too few African opportunities are ready to receive it. The opportunities are good, the investors have money, but there’s a gap,” Chisale said.

He identified three major obstacles to investment namely visibility, readiness and trust, arguing that closing these gaps was essential to translating investor appetite into projects that could attract financing and deliver economic returns.

“Many opportunities remain hidden within networks that are accessible only to a small circle of people. If you are not in the right network, you may never know that an opportunity exists,” he said.

The limited visibility of investment opportunities, he added, was compounded by inadequate project preparation, with some promoters approaching investors without current technical assessments, independently validated information or the documentation required to support investment decisions.

In the mining sector, for instance, a project owner might have a potentially valuable resource but lack a geological report or rely on information that is a decade old.

Such shortcomings make it difficult for investors to assess the commercial viability of projects, determine their risks and commit capital with confidence.

Trust presents another significant barrier, particularly when investors need to verify ownership, licences and regulatory compliance across jurisdictions.

Chisale said an investor, for example based in London seeking to verify the validity of a mining licence in Zimbabwe could encounter difficulties navigating local verification processes, especially where enquiries went unanswered or official information was difficult to access.

Investors therefore need credible intermediaries on the ground who can engage regulators, verify documentation and facilitate due diligence, reducing uncertainty and the cost of doing business.

Beyond these challenges, fragmented economic and sector information, changing regulations and slow transaction processes further complicate investment decisions.

Investors require reliable intelligence on countries, industries, government policy and regulatory developments before committing funds. Where information is scattered or responses take weeks, projects risk losing momentum and investors may redirect their capital to more accessible markets.

Chisale said the IHC was designed to address these constraints by connecting global investors with African projects that had been screened and developed to meet investment requirements.

The platform develops country and sector intelligence, provides industry analytics, issues real-time alerts when new opportunities become available and facilitates engagement between project owners, investors and other relevant stakeholders.

Where appropriate, it also directs investors to specialist investment bankers registered on its platform for advisory services.

The centre works with both greenfield projects, which are developed from the ground up, and brownfield opportunities involving existing assets or operations, helping profile them to a bankable standard.

Chisale said the IHC had profiled about 121 investors with a combined investable pool of US$3 billion. The investors span Asia, Western markets, Africa, domestic markets and the diaspora.

The figures indicate the potential pool of capital accessible through the platform, although actual investment will depend on the quality of opportunities, due diligence and the ability of projects to meet investors’ requirements.

For project promoters, Chisale said, attracting capital required more than a compelling business idea or ownership of a valuable asset. Projects needed credible commercial models, clear market demand and capable management teams.

“Before an opportunity is generated, we need a clear model. We need to have market certainty. Who is going to supply, who is going to buy?” he said.

He added that projects also needed to demonstrate resilience against adverse conditions, including poor agricultural seasons or other disruptions that could undermine projected returns.

Investors would also scrutinise the people responsible for executing projects, assessing whether management teams possessed the qualifications, experience and technical competence required to deliver on their plans.

The emphasis on bankability reflects a wider challenge facing African economies: the gap between possessing valuable natural resources and commercial opportunities and developing them into investments that satisfy the requirements of capital providers.

For Africa, closing that gap will require better project preparation, stronger institutional transparency, accessible and reliable data, and more efficient regulatory processes.

The continent’s ability to attract investment will ultimately depend not only on the scale of its opportunities, but also on whether investors can identify, verify and finance them with confidence.