Investing In Africa Is A Different Game. Here Are The Rules

Private equity in Africa has returned less than 10% IRR over the last decade. The target? 20%. Andrew Alli has spent 30 years figuring out why. He led infrastructure investments at the IFC, then became CEO of Africa Finance Corporation—where he secured an A-minus credit rating and led a Euro bond that was 5-6x oversubscribed. But this conversation goes far beyond finance. We unpack why private equity has underperformed across Africa, what's really blocking development, and why the diaspora's most valuable asset isn't money—it's know-how. Andrew breaks down: • Why African PE returns less than 10% IRR when firms target 20% • The 30% ownership trap: why PE firms can't turn companies around • Dutch Disease: how oil destroyed Nigeria's manufacturing base • Why 54 African countries is "way too many" • Energy and productivity: the two dimensions that drive development • 95% of AFC's troubled investments shared one flaw: governance (not corruption—culture) • China in Africa: "When Europeans visit, I get a lecture. When the Chinese visit, I get a stadium." • The diaspora's real value: know-how, not cash • John Rawls and why justice is the foundation of national unity This isn't just about investing. It's about understanding the game you're playing. Essential viewing for founders, investors, and diaspora professionals building in or with Africa. AUNTY'S SCULPTURE COLLECTION A limited collection by Anthony Azekwoh x Afropolitan. 100 pieces. Application only. Apply here: https://formless.ai/c/q1GB9jAzOWTr WHERE TO FIND ANDREW ALLI Twitter: https://x.com/afalli LinkedIn: https://uk.linkedin.com/in/andrew-alli-a5029a1 EPISODE SPONSORS Vban - Open a free global account in minutes. Use code AFROPOLITAN: https://vban.com CONVO BY AFROPOLITAN Book 1:1 calls with Africa's boldest thinkers: https://convo.vip/ AFROPOLITAN Twitter/X: https://x.com/afropolitan Instagram: https://www.instagram.com/afropolitanpodcast Newsletter: https://www.afropolitan.io/newsletter TIMESTAMPS: 0:00 – Intro 1:35 – One uncomfortable truth: You have to work with governments 4:12 – Where do you see hope in Africa? 5:04 – 54 African countries is too many 6:12 – Africa's demographic advantage and the future of labor 7:03 – Private equity's broken model in Africa 9:50 – The currency trap: 300% in Naira, 6% in dollars 11:06 – Why PE exits take 14-15 years instead of 10 12:16 – The 30% stake problem 14:45 – Africa needs 15+ million jobs per year 15:46 – Development comes down to two things: productivity and energy 16:55 – The average Nigerian consumes the same electricity as a fridge 18:08 – Energy is the bottleneck—even for AI in the US 18:35 – Education and know-how: The Dangote Refinery example 21:18 – Only 2 African utilities are financially viable 22:37 – Macroeconomic stability and security 26:55 – When did Nigeria diverge? The 1970s oil curse 33:19 – Why 54 countries creates inefficiency 36:43 – Where young Africans should look for opportunity 40:08 – Fintechs will eventually become banks 43:41 – AFC's early days and building from scratch 46:07 – How AFC achieved an A-minus credit rating 47:25 – 95% of troubled investments had governance failures 49:55 – John Rawls and why African leaders need a theory of justice 55:21 – China's role in African infrastructure 1:00:03 – The diaspora's real value: Know-how, not money 1:06:31 – Why Andrew is on Twitter 1:08:47 – Rapid fire: Favorite Nigerian food, travel, and more 1:09:49 – How AFC's Eurobond was 5-6x oversubscribed 1:12:08 – Warm monetization: Sell Indomie, not champagne 1:16:11 – The infrastructure deal that got away 1:17:19 – Most underrated African leader: Seretse Khama 1:17:30 – Who should sit in this chair next?