Tanzania invites venture capitalists

DEALS: Venture capitalists look for high returns over long periods of time.

DAR ES SALAAM, Tanzania - Recently Tanzania,  for the first time, hosted the largest collection of high profile investors expecting to inject nearly $7 billion through venture capital and private equity  deals.

Opening the proceedings, Tanzania Vice President, Dr Mohamed Gharib Bilal said, “The efforts to develop the private equity and venture capital as an alternative source of finance to our companies in Tanzania is warmly welcomed and unconditionally supported by the government.”

In the run-up to the event, Tanzania Private Sector Foundation (TPSF), Executive Director, Godfrey Simbeye said the symposium would be the largest collection of business wealth ever assembled in Tanzania.

“Attendees are controlling an estimated $7 billion of investable funds and business enterprise value, he said ading that they will also include the country’s top business leaders seeking to grow their businesses, and international investors seeking to access Tanzanian partners and investment opportunities,” he said.
He said that 50 international investors attended the international conference on venture capital and private equity in Tanzania with the objective of expanding investment opportunities available in the country.

Venture capital is the process of investing private equity in companies, typically in early stages of development, that are believed to offer significant potential to grow substantially and reward investors accordingly. The objective is to generate high rates of return over long periods of time

Simbeye said in the East African region Kenyans are leading in the venture capital and private equity  deals.

This has boosted the country’s investment portfolio compared to other member states in the EAC.

He said the talks would centre on long term business relationships. Partnerships could be formed and pave the way for local, international investors and professionally operated firms to show interest.

Simbeye said is an opportunity for local business people in Tanzania to learn and explore existing investment opportunities in the country.

He underscored that both foreign and local participating relevant companies and other stakeholders would have the opportunity to join as founder members of the proposed Tanzania Venture Capital and Private Equity Association (TAVCA).

The Statera Capital Managing Director, David Ross told the East African Business Week venture capital and private equity is one of the best ways to fsoter development in Sub- Saharan Africa.

He said this was a chance to unlock Tanzanian potential resources and transform these opportunities  into acceptable joint ventures that will speed up the country’s social and economic development.

“Tanzania is not going to continue to export its raw materials, but it will contract finishing processes here and export finished goods in the global market,” he said.

Ross went on to say that in finance, private equity is an asset class consisting of equity securities and debt in operating companies that are not publicly traded on a stock exchange.

“Through this the goverment would be able to collect taxes in the investment process and contribute to social wellbeing and the struggle in the poverty reduction,” he said.

He said that business tycoons are looking for the best business and investment strategy with the attracting structure that allow both a foreign investor and a local to grow.

TPSF is the apex body of the private sector organization in Tanzania whose major objective is to provide a focal point for the articulation of private sector led approaches to Tanzania economic and social development.

By Damas Makangale, Saturday, November 15th, 2014