By Shifali Gupta, Investment Fellow @ VestedWorld, Northwestern Kellogg MBA ’20

A brief look at the gap in healthcare

Sub-Saharan Africa bears over 24% of the global disease burden, but is home to only 3% of the global health workforce. On average, there are 3 physicians per 10,000 population compared to OECD countries that have 10x the number. In fact, according to WHO’s estimate, African nations would need to increase their health workforce by about 140% to achieve enough coverage for essential health interventions.

In addition to the sheer shortage of healthcare professionals, the workforce is concentrated in the major towns and cities, while rural areas can only boast of about 25% of a country’s doctors and nurses on average. Moreover, brain drain affects Sub-Saharan Africa disproportionately. …

By Lavanya Anand, Vice President @ VestedWorld and Jeff Stine, Managing Director @ VestedWorld

For a moment, imagine travel restrictions are lifted. You’ve just returned to your safari lodge after an awe-inspiring trek observing a family of gorillas in their natural habitat at Rwanda’s Volcanoes National Park. You sit down for lunch and you’re welcomed with the freshest meal you’ve had in ages — tree tomato gazpacho and roasted beetroot tartar as appetizers and roasted duck with butternut squash puree as your main course. You may be surprised at the quality of the food. You may be wondering where and how this remote lodge sourced such fresh ingredients. Of course, East Africa, and Africa more broadly, has long been known for its incredible wildlife and landscapes, but not necessarily its culinary scene. As tourism continues to grow, establishments like restaurants, hotels, and conference venues also become more suitable for global travelers like you. This doesn’t happen overnight, however — a significant amount of time, money, and energy was required behind the scenes to serve the mouth-watering meal you just had. …

By Corbett Schmitz, Investment Fellow @ VestedWorld and MBA, Northwestern Kellogg ‘20

I. INTRODUCTION AND OVERVIEW OF URBAN SERVICES

By 2100, Africa is expected to outpace every other continent in population growth. According to Pew Research Center, Africa’s population will grow from approximately 1.3B today to approximately 4.3B before the century ends¹, and this growth is expected to disproportionately impact cities with 56% of the continent’s population expected to live in urban areas by 2050².

Urban services — defined as any industry that supports the fundamentals of urban life (e.g., waste management, education, transportation) — already struggle to keep pace with Africa’s population. For example, only 44% of municipal solid waste is currently collected³ and 66% of the continent lacks access to improved sanitation, as defined by the WHO⁴. …

By Christine Saffold, Investment Fellow @ VestedWorld and MBA Candidate, Chicago Booth ’20

Sub-Saharan Africa has the highest share of electricity output from fossil-fuel back-up generators in the world¹.

It’s time to aggressively pursue alternatives to the status quo. The use of diesel generators is a band-aid, not a long-term solution to inconsistent grid electricity, due to expensive ongoing fuel costs and detrimental environmental effects. The continent will suffer from hampered productivity and stagnant economic growth if massive action is not taken to increase access to reliable electricity.

Distributed renewable energy solutions, such as solar power, have been hailed as a promising way for Africa to leapfrog developed markets, akin to how mobile phones have leapfrogged landlines in the telecommunications industry. Is distributed solar energy a viable investment opportunity that can meet the electricity needs of Sub-Saharan Africa? If so, which business model works best? This paper explores the solar business models in the market and recommends next steps. …

This is part six in a six-part series of how we think about the risks of investing in early-stage companies in emerging markets. If you are new to the series, please start here. We’ve coined the term “FIERCE” to summarize the main concerns we hear from U.S.-based investors interested in investing in Africa — Fraud, Instability, Expropriation, Regulatory, Currency and Enforcement of Contracts.

As we wrap up this series on how we approach the risks of investing in emerging economies, we dive into an elusive concept at the intersection of international law and domestic law: Expropriation. Our framework for evaluating the risk of expropriation follows in much the same way as our frameworks for evaluating the other FIERCE risks: we first seek to fully understand what the real risk is (and isn’t) and the historical precedents. We then identify potential endogenous and exogenous factors that help to substantiate the ‘level’ of risk inherent in an investment opportunity, and then highlight potential ways to mitigate this exposure where possible. …

By Andrew Durke, Investment Fellow @ VestedWorld and MBA Candidate, Chicago Booth ‘20 and Tom Zhou, Investment Fellow @ VestedWorld and MBA, Northwestern Kellogg ‘19

At its most basic level, venture capital involves investing in companies that create value by solving problems. VC’s often search for companies addressing sectors of the economy that are full of problems — and therefore ripe for disruption. Solutions that effectively alleviate these problems have the potential to spread like wildfire and deliver the rapid, massive scale needed to generate venture-level returns.

From this perspective, Africa’s agriculture industry should be ripe for disruption — and therefore an attractive market for VC investment. Due to a host of problems, Sub-Saharan Africa’s agriculture industry is significantly less productive than the rest of the world.¹ …

By Nyambura Waggema, Amani Fellow @ VestedWorld

This is part five in a six-part series of how we think about the risks of investing in early-stage companies in emerging markets. If you are new to the series, please start here. We’ve coined the term “FIERCE” to summarize the main concerns we hear from U.S.-based investors interested in investing in Africa — Fraud, Instability, Expropriation, Regulatory, Currency and Enforcement of Contracts.

The Enforcement of Contracts risk

The World Bank describes enforcement of contracts in the following manner: “Enforcing Contracts measures the time and cost for resolving a commercial dispute through a local first-instance court and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system¹.” …

By Tom Zhou, Investment Fellow @ VestedWorld and MBA, Northwestern Kellogg, ‘19

The Hidden Importance of Logistics

Imagine reaching for your favorite box of cereal at the corner store and instead being greeted by an empty shelf. What happened? Well, getting that box there at the right time is a lot more complicated than you might think. Inventory forecasting, warehouse processing, last mile drop-off — logistics is an intricate web that consumers often take for granted.

It may be passable when you don’t have cereal for a few days, but logistics, in some instances, has significantly higher stakes and far lower margins for error. There’s the hospital worker who depends on steady shipments of medical supplies to treat chronically ill patients, the mechanic who needs a spare part order to arrive on time and maintain his reputation as someone who can complete repairs quickly, or the farmer who needs a replenishment of seeds, fertilizer, and pesticides to bring his crops to harvest and put food on his family’s table. …