Carole Ramella, the Founder and Managing Director of GFA Consulting Ltd, a corporate finance boutique based in Ghana and specialized in fundraising advisory (www.gfa-consulting.com) shares her thoughts on adapting to technology for African SME.
Tell us more about GFA Consulting and some of the bespoke solutions that you offer clients in West Africa.
GFA Consulting is a corporate finance boutique headquartered in Accra, Ghana, and specialized in fundraising advisory services for businesses that operate in Sub-Saharan Africa. We usually support businesses that are looking for $1.5m to $5.0m on average (larger transactions are possible) in debt, equity or a mix of both. We work with a large network of angel investor networks, banks, private equity funds and debt funds to identify the right sources of funding for our clients.
What would you say is the GFA Consulting advantage and what’s your view on how the services offered by GFA helps create value for companies and investors active in West Africa?
GFA Consulting does not take clients’ business plan and send mass emails to investors. We always spend time evaluating the investor-readiness of our clients through our proprietary operational and financial assessment. Clients receive detailed reports on our findings, on their rating, and on the list of recommendations to implement in order to increase clients’ chances of accessing funding.
In addition, GFA Consulting works with clients to review and build credible business plan assumptions that take into account the company’s historical financial performance, quality of teams, level of governance and realities of the market. We also complete valuation works if the company is looking to raise equity.
Finally, we only refer clients if their profile matches the investment criteria of selected investors. In this respect, we regularly engage with investors to be abreast with any change with their investment strategy in terms of countries of interest, investment size, sector of interest and level of control.
From your experience what are the principal considerations for getting a transaction completed on time in West Africa and what should funds (investors) look out for when considering investments in Africa?
On the company side, it is critical to ensure that the documentation is credible and consistent with historical performance. Companies should also be aware that investors do not only look at the project but also at the quality of teams, level of governance and quality of existing systems and processes. Consequently, the fundraising can take some time (minimum 6 months for equity and 3-4 months for debt assuming the documentation is ready) and must be planned accordingly.
When it comes to investors, we believe that opportunities in Africa lie with SMEs, ie companies looking for $1.0m to $5.0m. It is therefore important to understand the market and realize that while SMEs tend to be less structured, they are the organizations with the largest potential for value creation, assuming investors allow the right resources to better structure these organizations, particularly when it comes to working capital management.
2020 will be remembered as the year that everything changed – Which markets in West Africa would say have proven the most resilient and why?
The largest countries in West Africa are identified as most resilient by many investors, notably Ghana, Nigeria, Cote d’Ivoire and Senegal. This comes obviously from the size of these markets, but also from the larger number of SMEs and a larger middle-class population that exists in these countries. However, in addition to these key markets, investors will strongly assess companies’ resilience, i.e. companies that have proven their capacity to maintain or even increase their customer base while controlling costs, or that have achieved successful adaptation of their business model given the current crisis we are going through.
How do you expect Orbitt to help you with your business development process?
I would welcome an introduction to potential investors to allow me to better understand their investment strategy, particularly in the areas of equity, debt and trade finance.