Can Eswatini Produce a Unicorn? (2 of 4)
July 12, 2023
By Lwazi Ian Dlamini, Senior Partner
“What keeps you up at night?” is a very popular question young people like to ask when interacting with successful African entrepreneurs like Patrice Motsepe, Aliko Dangote, Strive Masiyiwa and Vusi Thembekwayo. President Obama once asked Masiyiwa what gives him sleepless nights. Without hesitation, he told him, “How do we create jobs in Africa?” In response, President Obama invited him to come to the White House so they can discuss this issue. “You are right to be thinking about it,” he said.
Reflecting on some of the nights when I woke up to think, I discovered that I also have questions that keep me up at night. These include;
- How do we attract venture capital into Eswatini to create jobs for the youth?
- How do we accelerate start-up ecosystem development in Eswatini?
- How do we develop the skills required to achieve a private sector-led economy?
- Can Eswatini produce a unicorn?
Masiyiwa shared that he later had a privilege to spend time with President Obama to discuss his ideas. “As an entrepreneur’’, Strive said, “to try to tackle this challenge, I’m using what is in “my hand.” I am not a politician or policymaker. All my life, I have started businesses, and grown businesses. I have always appreciated that this is the most assured way to generate wealth and create jobs.”
The last thought for me is the mindset that can help us build a prosperous continent. Of course, I also have some ideas on how we could tackle the four questions I have raised about Eswatini. A few weeks ago, I decided to visit a few Sandton-based venture capital firms to gauge their appetite for the Eswatini market. I had never been so excited to talk about my country the way I did. I spoke about our 1.2m population living in a 17.4km2 of land whose youth population is at 60% and an adult literacy of 86.3%. I went to town about our 7.75% interest rate, our 6.0% inflation, US$31mnet FDI inflows, US$4,541m Real GDP and 3,868 DGP per capita.
When meeting the GoGetta team, I shared Dr. Phil Mnisi’s quote, “Eswatini is not a landlocked country but is land-linked.”
Our population may be small, but its entrepreneurs run both early-stage and growth start-ups that can be scaled in larger markets. Our population size provides a huge market where innovative products can be tested in less stringent regulatory environments such as the Fintech Regulatory Sandbox provided by the Central Bank of Eswatini.
“Have you thought of Eswatini? How much do you know about Eswatini?” were two of the burning questions I asked with keen interest. Whilst none of the firms I visited knew much about the Kingdom, they had an opportunity to listen to a short lecture on Eswatini summarized in a one-pager I had prepared.
I was elated when the official I met at MyGrowth Fund asked me which sectors are the largest contributors to our GDP. Do YOU know which sectors are those? If you don’t, I am happy you read this far. “The largest share contribution to our GDP,” I told him,” is manufacturing at 26.3%, others include wholesale & retail at 14.9%, agriculture & forestry at 8.0%. I did not end there. I also highlighted our rankings on the ease of doing business, (1st out of 54 countries in 2020), our feature in the top 10 most literate countries in Africa, our 20-year tax holiday for investors in the Special Economic Zone, our zero capital gains tax, our corporate tax concession at max rate of 27.5% for 10 years and lastly, our strong Investor Protection Framework.
Now, that’s telling the Eswatini story using numbers, a principle I was taught by Strive Masiyiwa – one of my online business mentors. “It’s all in the numbers; show me the numbers,” he once said. My Sandton meetings yielded a big milestone which I will be happy to share in due time.
My interest isn’t just about asking the questions but “using what is in my hand” to answer them. In my hand, I have a start-up birthed in me back in 2012 called Pinaco & Co. (it was called GYM at the time, an abbreviation for Great Young Minds), established to help answer the four questions. Of course, some of them are policy questions but isn’t this what entrepreneurs exist for; solving problems?
Pinaco & Co. is on a journey to take Eswatini start-ups to the global stage.
Who knows, maybe by the turn of this century we will have, not one, but two unicorns from Eswatini. If you’re one of the people bothered by the questions I asked, let’s talk. To VCs with appetite for the market, let’s engage.
Note: The term “unicorn” refers to a privately held startup company with a value of over US$1 billion. It is commonly used in the venture capital industry.
About Pinaco & Co.
Established in 2022, Pinaco & Co. is a start-up-focused management consulting firm that provides data analytics, brand and strategy services. Through its flagship projects; startup database and the Eswatini Startup Ecosystem Report, it is positioned to become the source of key data that will drive and attract investments into the start-up economy in Eswatini.
About MyGrowthFund
MyGrowthFund is a venture capital firm that invests in high growth start-ups in Africa. The firm invests in companies across a wide range of sectors including technology, healthcare, education, agriculture, financial services, and consumer goods. The MyGrowthFund Strategy is a growth-oriented investment strategy that focuses on opportunities in Africa.
About GoGetta
Gogetta is a venture capital and private equity principal providing a crowd-funding platform where entrepreneurs can raise between R1.5m and R10m. It is powered by Grovest, the largest administrator of small cap funds in South Africa, with assets under administration of R3.5 billion. GoGetta launched on 1 August 2022. Following best practice models of international equity crowdfunding, GoGetta is taking on Africa, and opening her doors to global investors.
