What If Capital Is Not the Next Thing an African Business Needs?
A lesson from our first cohort in Rwanda: before financing growth, we need to understand what the capital is actually meant to accelerate.
Across Africa, one answer to the entrepreneurship problem appears again and again: more capital.
And often, that is true. Small businesses need financing to buy equipment, hire workers, and expand.
But working closely with entrepreneurs in Rwanda has made me ask a different question: What if money is not always the next thing a business needs? At Safari Strives, we are learning that the constraint an entrepreneur identifies first is not always the one actually holding the business back.
“Capital is an input, not a strategy.”
Take Bashions, a lighting and signage company in our first cohort. The business has already surpassed last year’s revenue and could nearly double it this year. When the founders joined the program, they wanted more machinery to increase production. But producing more was not necessarily the biggest opportunity.
The deeper question was: why should a customer choose Bashions?
Today, the founders are developing culturally inspired lighting products that give the company a clearer identity and customers a stronger reason to choose them. Then there is Grace, founder of Grece Fav Cycles, who transforms coffee residue into cosmetics. She initially wanted funding to continue importing generic packaging from Uganda. But the packaging did little to communicate what made her product distinctive. So the question changed from How do we finance more packaging? to What should an innovative product made from coffee residue in Rwanda actually look like? She is now prototyping locally inspired packaging that better reflects the innovation of the product inside.
The lesson: diagnose before you finance
If a product is poorly differentiated, more capital may simply help produce more of something customers have little reason to choose. If the entrepreneur has misunderstood the real bottleneck, money can help them move faster in the wrong direction. Sometimes growth begins somewhere less dramatic: a better question, a stronger product, or a clearer understanding of the customer.
Thinking globally while building locally means understanding where we cannot compete, then deliberately building around the advantages we already have: culture, local knowledge, craftsmanship, proximity to customers, and stories that are difficult to replicate.
So before asking how much capital a business needs, perhaps we should first ask: What exactly are we asking the capital to accelerate? Because sometimes the next breakthrough is not producing more. It is creating more value.
ABOUT THE AUTHOR
Elie Imani is the founder of Safari Strives, a venture accelerator working with entrepreneurs in Rwanda.
