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The Economic Summit was splendid but not every project needs N$200 million. For many startups, only one million will make a huge difference

The Economic Summit was splendid but not every project needs N$200 million. For many startups, only one million will make a huge difference

By Melkisedek-Shivute Ausiku, founder of LEFA.

A short while ago I was honoured to be invited to the Economic Growth summit in Windhoek. This conference was created to lure potential investors to Namibia from overseas, but also get local organisations to crack open their wallets and pledge to aid our economy. As a young entrepreneur it was great to be able to rub shoulders with some truly powerful people representing all manner or corporations and institutions. They were all there to pledge and seemed determined to really give the Namibian economy a much needed shot in the arm.

With all the pledges and totals tallied up, a whopping N$50 billion was pledged in one form or another. Loans being made available, monies released that were earmarked for investments and infrastructure projects being developed. The amounts flying around were mind-boggling and that’s where I started having some concerns as the owner of a small Namibian start-up, LEFA.

Our ride-hailing app has been active for about 18 months and continues to go from strength to strength with more than 2,000 users a month and still growing. LEFA keeps the roads safer by ensuring less drunk driving incidents and it generates income for the drivers. One barrier to further growth is lack of access to financial resources for investment purposes.

Every start-up needs resources to be able to develop, to expand, to improve service delivery and to reach a stage of critical mass where it starts turning over money and generating income to stay afloat and start making a profit. My spirits were up with the Growth Summit, as I assumed there would be money earmarked for smaller SMEs. After all, kickstarting the economy also starts at grassroots level. People that are entrepreneurs can and will start employing others without having a huge costly infrastructure to pay for in the form of overheads. However, where an investment of one or two million dollars would give the boost that a small organisation needs to survive and flourish, it seems that unless you are asking for N$10 million or a multiple of that, investors just aren’t interested.

This is a shame as in other countries, investing in tech or providing a good and conducive environment for start-ups and giving them access to funding, has allowed them to flourish. It created numerous success stories of apps and tech that we all use and benefit from.

Creating something along the lines of a Tech Fund to fund small potential tech startups could be exceedingly lucrative, just look at the first investors in Facebook, YouTube and many others.

There’s definitely nothing wrong with investing in major capital projects and infrastructure, Namibia certainly needs that. However, without entrepreneurs, small business owners and people willing to take a chance to create something from nothing, we will be doomed to stagnate. Our ride-hailing app has proven to be a success and there’s real money being generated. The sticking point remains; without the required investment the organisation can’t grow. This means that not only do we need investment, but we need the investors to have realistic expectations of returns and the time frame within which these returns can be realised. Also, this must be without putting insurmountable caveats on the potential loans.

Smaller investments can and will pay off big time, especially if the business already has a track record. Investing one or two million should be a lot more palatable than having to invest 200 million, yet it seems a hard concept for people to grasp. I am on a path to change that. Let’s really make Namibia an attractive and stimulating place to start a business with an investor-friendly environment…even for the small guy with the big ‘proven’ idea!


Who is LEFA?

LEFA is a shuttle requesting application that connects drivers and passengers. Passengers register in the application by entering a valid cellphone number and email address. It allows riders to request a shuttle or taxi by simply entering the location where they would like to be transported to. LEFA operates in Windhoek, Hosea Kutako International Airport as well as lodges and game farms surrounding Windhoek. LEFA provides convenient cash and cashless payment options to passengers. LEFA allows passengers to view a driver’s information and vehicle’s details before the ride as well as the ability to track their requested driver in real-time once the ride has been confirmed. Passengers are given the opportunity to rate the driver and help LEFA improve its service delivery.


 

About The Author

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.