Hyperprecision Investment

Kumbirai Makanza

Wednesday, January 17, 2024

While wealthy countries could print money to revive their economies post the COVID-19 pandemic, developing countries could not do likewise and are grappling with exorbitant borrowing costs — up to eight times higher than those of developed countries

-Dr. Akinwumi Adesina, the president of the African Development Bank Group.

The significant risk premium paid by Africa adversely affects its energy access efforts and ultimately increases the costs of renewable energy projects.

Firstly we must consider that investing in Africa typically comes with an exaggerated risk perception based on fear of the unknown rather than decision-making driven by managing the unknown. The undue and unfair financial risk premium experienced by African governments and businesses alike is closely tied to perceptions of risk and challenges rooted in historical, political, economic, and structural biases stemming from the colonial era. As Africa enters into a new dawn, data has the potential to be the great equaliser. Leveraging data can be instrumental in addressing these challenges by providing transparency, improving decision-making, and building trust among investors. 

As Africa’s first hyper precision Fund, Superpower Africa Fund leverages data to reduce the cost of capital for businesses who need it most. We do this in the follow ways:

  • Risk Assessment:

    • Revenue Risk Analysis:  The Fund employs advanced proprietary machine learning algorithms to assess near real-time data sourced from Customer Relationship Management (CRM) systems, smart meters, and Internet of Things (IoT) devices of African SMEs integrated with embedded finance business models. The analysis identifies, categorises, forecasts, ring fences and ultimately securitises stable, high-value revenue streams. These revenue streams are ultimately used as collateral for affordable receivables backed loans. The data-driven clustering, forecasting and ring-fencing process effectively manages and assigns revenue volatility and risk.

    • Macroeconomic Risk Analysis: The Fund blends in a wide array of 3rd party demographic and macroeconomic data sources into its analysis. This ensures that we accurately account for the macro-economic risks associated with investments in specific African countries. This approach differs from the traditional ‘lazy profiling’ approach where all African countries and businesses are clumped together.

    • Sectoral Risk assessment: The Fund blends data-driven sectoral analysis with in-depth sector knowledge to better understand sector specific risk associated with its potential borrowers.

  • Data Transparency:

    • Financial Reporting and Transparency: The Fund has near real-time time financial reporting for its investors to provide comfort, to dispel uncertainties and reduce the perceived risks associated with opacity and misinformation on the continent.

    • Flagging anomalies: The Fund employs its advanced algorithms and techniques to cross validate information and identify data anomalies. This helps ensure the data integrity of its models and the credibility of the Fund and businesses it supports.

Leveraging data is essential in addressing the undue and unfair financial risk premium experienced by African governments and businesses. At last, investors now have unprecedented access to high-resolution insights, transparency, and evidence-based information, laying a robust foundation for stimulating investments at scale into Africa. What are you waiting for? Find out more and invest now!

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Kumbirai Makanza

Lead Curator,