Strive Masiyiwa on how entrepreneurs can meet the challenge of the climate emergency and what investors should do to support them

Strive Masiyiwa is a London-based Zimbabwean billionaire businessman, philanthropist and one of Africa’s best-known entrepreneurs. He is the founder and executive chairman of international technology groups Econet Global and Cassava Technologies.

Just before COP27 began, he talked to BII’s Andrew Murray-Watson about how entrepreneurs can meet the challenge of the climate emergency and what investors should do to support them.

What role does entrepreneurship have in the fight against the climate emergency?

Climate change and pursuing one’s entrepreneurship in a sustainable way go hand in hand. Each generation before us has had to deal with challenges unique to their own time. The great challenge for this generation is climate. And with that sustainability – doing things in a sustainable way. The more conscious you are in designing the business model to tackle those challenges before you, the more successful you are likely to be. And by that, I mean more successful in terms of customers, more successful in raising capital for what you do and more successful in terms of the durability of the brand that you develop.

Every entrepreneur must seek to develop and run their business in a way that addresses the challenge of climate change. But there are also those businesses that are about climate change. Climate change in of itself is an opportunity of entrepreneurship. And climate change can only be solved by innovators and entrepreneurs. So, it is the greatest opportunity as well as the greatest challenge facing entrepreneurs and innovators.

How should investors go about supporting the next generation of African entrepreneurs?

Firstly, investors whether big institutions or venture capitalists – we are only ultimately committed to where our money is. As investors, we need to send the right signals – signals in my view that should be about incentives rather than punitive measures. The approach that has been adopted, particularly around environmental, social and governance (ESG), for the most part, has been punitive. “If you don’t do this, we will do this to you” etc.

Too often when entrepreneurs approach investors they get told “Go away, you have not done one, two or three”. Why not say: “We will help you to do one, two and three” or “We have capital to support you in doing these things”.

That’s why you are seeing some backlash against ESG – it has lost its stickiness. And if you are doing it to tick some sort of box called ESG, you are going to be the first to flee when it gets difficult.

So, a fundamental rethink is needed.

Do you think the current approach to ESG investing is reducing capital flows into Africa?

That is absolutely the case. It must be limiting investment because we are not seeing the money. Follow the money. We are not seeing it.

Look at the commitments that have already been made. If we are really serious about saving the planet, in which we all live, why can’t those commitments be realised? Why can’t that finance reach entrepreneurs that are creating the solutions and making a difference. There is not enough wind energy being exploited in Africa. The amount of solar invested in the whole of Africa is less than in Germany. Why isn’t the money being made available?

So where do you find the solutions to climate change for Africa?

In the end, we know what most solutions are, the issue is money – the investment necessary. And making sure we have the correct conversations. People debate the “energy transition”. The guy who doesn’t have access to electricity, and that is more than 590 million people in Sub-Saharan Africa alone, cannot talk about transition! In Africa we are talking about energy access and making sure that access doesn’t take the same emission-filled path that got us to this place.

We as Africans have been absolutely clear that we don’t want to take the (fossil fuel) path that got us to this place. We have already said that. But then why do we have to negotiate for people to accept that? That is the piece I can’t get my head around.

We need to invest in clean jobs and in particular, agriculture. About 63 per cent of the world’s unutilised agricultural land is in Africa, but we have few export markets. Our biggest market – the EU – we can barely sell them any agricultural products that we produce. Then they complain about migration. Do you know how many jobs we could create if we tackle food production, if we tackle sustainable development? It is a huge opportunity.

So what needs to happen to unlock that opportunity?

We need something akin to the Marshall Plan – I have always said so – a concentrated effort provides the capital we need for investment. Organisations like British International Investment remain engaged in investing in Africa and for that we are grateful, but we need a lot more than that.

We can start by asking those that made financial pledges at COP26 to fulfil them. We need honesty and integrity in fulfilling these commitments. The deal was all done – so why relitigate it? That’s all I am saying.

The views expressed in this article are the contributor’s own and do not necessarily reflect BII’s investment policy or the policy of the UK government.