Armed with a BA in Economics from Princeton University and an MBA from the Harvard Business School, Ade Okunubi, Nigerian in the Diaspora has launched a platform with plans to help investors in Africa own part of global firms such as Apple, Google and Facebook.
Launched November this year, Afriq-Invest is the first such online platform allowing Africa-based investors to invest in the US stock market.
Own part of global firms such as Apple, Google and Facebook
Speaking to TechMoran, Okunubi said, “I got the idea when talking to my uncle and some friends in Nigeria and hearing them complain about not being able to buy US stocks and generally not having access to investment opportunities outside of high cost investments like unimproved land or importing cars. “
“Afriq-Invest is not that different from all the e-commerce sites that have come up lately except that instead of selling Blackberry phones or sunglasses I am “selling” financial goods. I prefer to sell goods that will be worth MORE than what you paid for them a year from now. Nothing against selling electronics or clothes, but the last thing Africans need is more Western junk they don’t really need,” he added.
The platform has 3 account options for users. The first is the direct investing accounts for investors that want to pick stocks on their own. The second is the market accounts for investors that want passive exposure to the ENTIRE US market (S&P 500) and the third is the custom accounts for investors that want a customized portfolio. He says the firm has a proprietary risk questionnaire that helps assess clients’ goals, life situation and risk tolerance to craft a portfolio.
Just a few weeks old, the platform has already signed up 7 accounts and charges $20 per trade in Active accounts, 1% per year for passive accounts and 2% per year for custom accounts. Okunubi is not worried about the competition from firms like
South Africa’s StanLib, TD International in Luxemburg which only accept people with EU addresses. He argues that there are investors in Africa who don’t want to pay StanLib’s high fees and most of them from West Africa, East Africa and other parts of Africa feel left out.
He also adds that the platform makes it easier for African investors to buy US stocks than it would be to buy local stocks due to its better User Interface and experience complemented by better research tools.
“The US market and tech space is taking off and Afriq-Invest allows you to invest in FaceBook, TWitter, and Amazon so you don’t miss out on the growth in the US’ booms. Clients can also buy stocks of companies that are doing business in Africa that they are more familiar with like Coca-Cola, Exxon and BHP Billition; companies they know about but couldn’t get exposure to before and finally, clients get to keep cash in USD and protect it from inflation with more investing options that allow their wealth and savings to grow.
24/7 account access
Being entirely online, the platform promises clients 24/7 access to their portfolios and research tools. The African-only platform aims to get Africans equal access and exposure and help them buy and manage their US stocks.
Funding to him is not a challenge as he has managed to fund it to where it is now. His only worry is online fraud via “investment schemes” and competition from government bonds with a believe of high yields of up to 11-13%. But that is a deception as to him the govt is paying them these rates because inflation is very high (8-10%) and when you take the depreciation of the local currency (3-5%) into account the returns are even worse (13 minus 10 minus 5 = -2%).
” I have presented actual figures on my homepage explaining and calculating this for 4 African countries. The average investor doesn’t know this since they aren’t as familiar with concepts like inflation adjusted returns but it’s part of my job to educate our people about these nuances,’ he says. “Note that the case is the same here in the US with US treasuries paying about 2% but US citizens have more options such as stock market, corporate bonds and property for getting higher returns.”
In the next two years, he expects Afriq-Invest to be the destination for exposure to US stock market and ideally linked to a major local financial institution like Zenith or Standard Chartered as an investment offering. He wants Afriq-Invest to give Africans the same access to financial assets everyone else gets and help Africans grow their wealth and make them more financially savvy.
For Africa-based investors only
His target audience is the AFRICA-BASED individual who does not have the same level of access to the West that the diaspora folks have. Like a University of Ibadan professor or a Lagos State auditor who lives in Lagos or Accra or Ibadan with a little money he or she wants to grow over time while protecting it from the high inflation rates and depreciating currencies that are the norm in Africa.
“I created Afriq-Invest because Africans ALWAYS get the short end of the stick. Our local products are either non existent or of poor quality and delivered with BAD customer service,” he said. “Africans rarely get the same access as other people for no other reason other than folks are ignorant about Africa and its people or they think we are too poor to afford them though they have no problem taking our money in their high street shops in London and New York. We are NOT all corrupt politicians, drug dealers, fraudsters or charity cases. There are a lot of regular people with regular jobs that deserve the same attention paid to the middle class in other countries like Brasil, India and China.”