Intel: Investing In Africa? Perceived Risk Exceeds Real Risk

Intel: Investing In Africa? Perceived Risk Exceeds Real Risk

The perceived risk of doing business in Africa is higher than the real risk, and that spells opportunity for companies like semiconductor maker Intel, according to a report in ITNewsAfrica.

Intel Capital’s annual CEO and investment summit is under way, bringing together start-ups, angel investors and CEOs from companies around the world.

Headquartered in Santa Clara, Calif., Intel is the world’s largest and highest-valued semiconductor chip maker, based on revenue.

Reluctance of some companies to invest in Africa is of “great benefit for us, as we are often an early investor in Africa,” said Marcin Hejka, Intel’s managing director for Europe, the Middle East and Africa. Hejka talked to ITNewsAfrica about upcoming trends in technology, investing in Africa and how Africa compares to the rest of the world in terms of risk.

Hejka likened the perceptions of Africa to that of early Eastern Europe, where a number of companies were initially cautious about investing. “When looking at investing, Africa can be compared to early Eastern Europe – Africa’s growth is a lot like the growth we saw in that region. When we started investing in Eastern Europe, there was a lot of risk taking. People doubted that Russia could yield successful exits, and now they are doing billion-dollar deals. Africa is growing at the same pace and it will catch up.”

Hejka said he is upbeat about Africa’s future. “Just like Russia, Africa will produce billion-dollar companies in the next 10 years and I am very confident in the growth in the continent. From what we have seen in terms of investing from Intel, companies in the (Europe, the Middle East and Africa) region often follow the same model, and that applies to Africa. So it’s almost like having a crystal ball – we can predict what is going to happen.”

Broadband plays a major role in investment in Africa, Hejka said. “One difference now that is helping with investment is better availability of broadband, where we have seen the prices drop by almost 90 percent; and almost everyone has a mobile phone. There is an unserved demand, and whoever figures out how to deliver on this demand will be profitable.”