Conduits of Capital

particular jurisdiction (communications, transport,
immigration, land / buildings, etc); 5) Developing
publicity and awareness material / programmes; and,
6) Establishing the necessary institutional structures
(promotional, regulatory, etc.).
• Lion’s Head also focuses on the rule of law and
taxation—“The main themes around which technical
assistance can be structured are: tax policies;
transparency and the rule of law; developing capital
markets and adopting sophisticated financial products.”
• Fuchs highlights new ways of structuring funds and
reducing investment costs—“providing support to PE
funds that are committed to targeting smaller enterprises
is best structured as technical assistance provided
directly to defray PE running costs and to prospective
PE investee companies so as to strengthen the pipeline
of prospective investible projects.”
• Z/Yen emphasises better information, provable longterm
government commitment, and improving skills:
– Get real – more aggressive promotion addressing
shortcomings with long-term planning yet avoiding
the appearance of capricious regulatory change,
combined with a clear legislative cycle in finance
where finance bills change regularly but not too
rapidly;
– Get integrated – consider ‘mid-shore’ strategies
where there is a symbiotic offshore relationship with
larger or neighbouring nations allowing businesses
to function under less-than-ideal or complex onshore
regulation;
– Get better – tackle long-term skills shortages with
better training for indigenous populations rather
than relying on imported skills; improve power,
transportation and communications infrastructure;
– Get connected – host high-profile regular events,
create strong academic links, simplify visa and work
permit processes; and,
– Get serving – increase levels of service
both for those entering the centre and longterm
residents; use benchmarks, data
comparisons, and awards to keep service high,
encourage innovation.
4.2 Donor Support
The reports realise that donors cannot do all things. Z/Yen
invokes Jared Diamond’s Anna Karenina principle from the
opening line of Tolstoy’s novel: “Happy families are all alike;
every unhappy family is unhappy in its own way.” The Anna
Karenina principle describes situations where a number
of activities must be done correctly in order to achieve
success, while failure can come from a single, poorly
performed activity. Fuchs—“It is important to underline that
a necessary condition for establishing a successful onshore
centre would require excellence in all rather than just a few
of these areas.” Yet donors do not have unlimited resources.
Responding to conditions on the ground probably means
shoring up the weakest current factors or laying down longterm
foundations in a short-term environment. The papers
expect that donors will have to chop and change direction
over time.
Figure 2 – Keywords by number of mentions across the
five reports
An interesting point was made by Econsult Botswana—
“donors could play a role in developing and financing a
large scale publicity, branding and marketing initiative”
—favouring speed first, fixing later, and suggesting that a
‘cheerleader’ role might be worthwhile.
Conduits of Capital – Onshore Financial Centres and Their Relevance to African Private Equity
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