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Reuters/Akintunde Akinleye
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CASH MONEY

Why aren’t more wealthy Africans backing the continent’s start-ups?

By Omar Mohammed

Any budding entrepreneur in Africa knows how difficult it is to raise capital for your business.

Yesterday, a founder of one of the more successful startups in Nigeria, Hotels.ng, Mark Essien voiced his frustration at the mediocre state of local funding for start-ups.

Following his comments, Ory Okolloh, one of the leading tech voices in Africa and co-founder of Kenya’s Ushahidi, a mobile-based, online mapping platform, chimed in.

Okolloh, who now works as the director of investment for Omidyar Network, the investment arm of eBay founder Pierre Omidyar, which has just injected $1.2 million to Hotels.ng. Okolloh expressed astonishment that the wealthy on the continent have no time for local entrepreneurs.

She then went on to suggest that African entrepreneurs would have more luck with investors in the US than potential funders back home.

She concluded her comments with a provocative challenge, asking how much local funding has been raised for start-ups, and quickly suggesting that it probably won’t be that much.

Some African business leaders have tried to support local start-ups. Tony Elumelu, the Nigerian business leader, launched an entrepreneurship programe early this year to plug this gap. Spark.ng, a Lagos-based firm run by Jason Njoku, has invested in local start-ups, seeding $250,000 to Hotels.ng for example. But Ms. Okolloh clearly believes a lot more needs to be done.