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Thomas Friedman’s op-ed (subscription required), "'Patient' Capital for an Africa that Can't Wait," in last Friday’s (April 20) New York Times calls for a new kind of venture capital for Africa that accepts lower (but still positive) returns on risk capital over a longer time horizon. This "patient" capital would be instrumental in launching and expanding small and medium businesses and generating accompanying job growth. Friedman says:

"Africa needs many things, but most of all it needs capitalists who can start and run legal companies. More Bill Gateses, fewer foundations. People grow out of poverty when they create small businesses that employ their neighbors. Nothing else lasts."
The case for "patient" capital is strong given the low levels of private equity and venture capital going to frontier emerging markets--and especially to Sub-Saharan Africa--from more traditional Western venture capitalists. He mentions our friends at the Acumen Fund, a US-based nonprofit venture capital investor, as an example of the kind of operation that does offer "patient" risk capital to African companies and contributes--albeit often quietly--to job creation and industry development in the region.

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.