Importance of data for private sector

In a recent interview at the Thomson Reuters Africa Summit, Rob Withagen, Managing Director of Asoko Insights, shed light on the critical importance of data for the private sector in Africa. With privately held companies making a massive contribution to the continent's GDP, there is a pressing need for accurate and up-to-date information about these companies. Currently, the availability of such data is scarce, with most information being limited to what companies themselves choose to disclose on their websites. This lack of transparency poses a significant challenge for investors, corporates, advisories, and governments who are eager to engage with these companies. In fact, the demand for information on privately held companies has been steadily increasing, leading to a rise in private equity funds focusing on the African continent. However, much of this investment is concentrated on a handful of well-known companies, leaving a vast segment of privately held businesses untapped. As a result, there is a clear need for data providers like Asoko Insights to bridge this gap by offering comprehensive insights into the broader spectrum of private companies, enabling better engagement and investment decisions. One of the key issues hindering access to data on private companies is a pervasive sense of distrust within the corporate landscape. This distrust stems from various factors, including concerns about local tax regulations, competitive intelligence gathering, and a general reluctance among companies to disclose information. With the rise of unsavory practices and data breaches, many companies are wary of sharing sensitive data for fear of exploitation or regulatory scrutiny. To address this challenge, data providers must emphasize the benefits of transparency and visibility for private companies. By sharing non-sensitive information that can aid investors in conducting due diligence, companies can enhance their reputation and attract investment opportunities. Moreover, increased data disclosure by private companies has been shown to have a direct correlation with their economic impact on the regions in which they operate. Foreign investors, in particular, place a premium on transparency and corporate governance when evaluating potential investments. By adhering to international accounting standards and promoting transparency, companies can improve their efficiency and contribution to the overall economy. To incentivize private companies to embrace data transparency, collaboration between data providers and businesses is crucial. By offering a secure platform for companies to share information, data providers can help companies extend their reach and attract new investment opportunities. Ultimately, the key to unlocking Africa's economic potential lies in fostering a culture of data transparency and collaboration within the private sector. As the business landscape continues to evolve, companies that prioritize data disclosure and transparency will be better positioned to attract investment, drive growth, and make a lasting impact on the continent's economy.