Governments around the world are boosting their healthcare infrastructure — both in response to COVID-19 and to make sure they can weather any outbreaks to come
Investment opportunities in Africa are changing rapidly because of COVID-19. Small businesses are trying to stay afloat while investors try to protect their portfolios. But times of rapid change can also lead to opportunity . Governments around the world are boosting their healthcare infrastructure — both in response to COVID-19 and to make sure they can weather any outbreaks to come. The growing healthcare space offers opportunities for investors, and these investments can have an impact beyond financial returns.
Prosper Africa spoke with John Nevergole, the co-founder and CEO of ABD Group, an American finance and investment firm focused on Africa, about the changes he’s seeing in the investment landscape. The ABD Group signed a Memorandum of Understanding with Senegal in February to develop a financing facility focused on social infrastructure. They’ve fast forwarded that deal to prioritize healthcare infrastructure.
Nevergole co-founded ABD Group with Mohamed Keita 14 years ago. Since that time, they’ve been involved in projects across 21 countries leading to over $2 billion in investments across the continent. ABD Group is currently on track to bring that number to $3 billion by the end of 2021.
The following interview has been edited for clarity and length.
We hear a lot from U.S. investors and businesses about the risks of doing business in Africa. What would you tell someone who might be interested in doing business in Africa but is worried about the risk?
Nevergole: First of all, Africa has an incredibly high growth rate. You have countries in the continent growing faster than anywhere around the world. You also have a young, growing population and a booming middle class. You have increased stability economically and politically around the continent. You have young, entrepreneurial, and diverse businesspeople and governments that want U.S. companies and investors there. Going around the continent, anyone you meet — from a president to a small business owner — wants more U.S. business. The appetite is there.
As for risk, I think there’s probably a 10- to 15-year gap between the actual risk and situation on the ground versus what people perceive. I don’t think many businesses here realize the growth and change that has taken place over the last decade. I would encourage people to really take advantage of these opportunities because Africa is going to be the place to do business for the next 10, 20, or even 30 years.
How did you and co-founder Mohamed Keita come to know each other and start ABD Group?
John Nevergole: I owned a business in Philadelphia and Mohamed was CEO of a TV company in Africa. He was coming to the U.S. to buy content. We happened to have a mutual friend who knew we were both interested in the investment space.
We met up and started talking about the investment landscape in Africa and the opportunities there. We did a few deals together and started building a good working relationship and friendship. Finally, we decided “hey, this is a great niche” and launched ABD Group. It has worked tremendously for us. Mohamed has lived and worked in Africa while I bring the understanding and mentality of U.S. investors. I think that unique mix is what has made us successful at ABD.
You recently signed a Memorandum of Understanding with the Senegalese Government to create a financing facility for social infrastructure projects in Senegal. How did that deal come together?
Nevergole: Many times, we’ll go into a country and identify the government’s priority projects. Then, we’ll take on a developer role — finding and securing the funding, bringing in engineering, procurement and construction partners, and everything needed to execute that project.
With Senegal, we partnered with banks that we had worked with before and secured $320 million for a financing facility. Originally, this financing facility was going to be focused across sectors. But with the COVID situation in Senegal, we’re working with the government to dedicate a large part of it to be used towards building up primary healthcare infrastructure around the country.
How will this pivot to healthcare infrastructure benefit people in Senegal, beyond the COVID response?
Nevergole: I’ll give an example: a lot of women die on the way to give birth because they just don’t have labor and delivery units at any hospitals close to them. With this investment, we will build up primary healthcare infrastructure and bring those health services closer to the communities. Then, these communities will have access to operating theaters, labor and delivery wards, and other quality equipment and infrastructure and hopefully reduce the maternal mortality rate.
And of course, boosting healthcare infrastructure can help Senegal respond more effectively to future epidemics that come around the continent and the world.
Beyond pivoting your focus to health with the Senegal financing facility, how else have you seen COVID-19 impact your work?
Nevergole: Quite honestly, all our projects have been continuing. We have seen huge commitments from governments to move projects forward across health, water, waste, and more. And the banks that we work with continue to finance projects. So, we haven’t seen any sort of delay — we’ve actually seen an increased urgency in wanting to get things done.
I think it creates an opportunity because those companies that continue to operate and move forward with their projects and investments during this timeframe are going to build more respect on the African continent.
The healthcare space will continue to grow and is a great opportunity for U.S. firms. All African governments know — and international companies and investors know — we have to put more investment into building up the healthcare infrastructure. And the U.S. Government and U.S. companies are equipped to take a leadership role here.
What are some of the top keys to success in doing business in Africa? What would you want to share with folks who haven’t yet entered into the African market?
Nevergole: I think U.S. companies and businesses must realize you’re going into someone else’s home. It’s very important to realize you can’t just fly in and fly out once, assuming your project or deal is going to happen. You must give the same sales and marketing effort in Africa as you would in Kansas. Showing that commitment to the continent, showing that you’re going to be present — you’re going to be on the ground and developing projects — that pays huge dividends for companies going forward.
Too many times Africans have seen large companies come in, make promises, and never return. Trust is very important, and people need to see that you’re committed to the project and you are going to follow through. That trust and commitment will not only help a specific deal or project succeed but it creates a long-term relationship that leads to more opportunities for both parties. They now think, “Hey, this is a company or group that we can work with that is committed to the continent.”
If you are new to investing in Africa or moving into a new market, it helps to work with someone who has relationships there and the U.S. Government can help on that front. For example, when we were working on the MOU with the Senegalese Government, the U.S. Embassy in Senegal was very supportive. From the Ambassador to the economic team, we have an embassy that is very plugged in within Senegal and wants to increase trade and investment with the United States. They have been a continual advocate on the ground. When we signed the MOU, U.S. Secretary of State Mike Pompeo joined us in Senegal for the signing ceremony. That added more pressure for everybody to work together and make sure we get things done. That support and confidence from the U.S. Government was very well appreciated and it amplified our efforts to get deals moved and signed in-country.