Africapitalism and the quest for self-reliance

“Through Africapitalism we can build resilient, competitive and self-reliant economies while empowering our teeming youth.” -Tony Elumelu

The name, Tony Elumelu certainly rings a loud and clear bell in Africa’s evolving economic firmament, especially as it relates to the empowerment of the next generation of entrepreneurs. Confronted with a myriad of institutional challenges and an inclement business environment characterised by decrepit infrastructure, high cost of doing business, high rate of inflation, a consumer and import-driven economy, the average Nigerian, nay African youth must be frustrated, indeed. That is, given the sad situation that has his brilliant dreams and ideas either remaining dormant in the dark, or even dying before the first sun ray at dawn.

To the average African youth, the government is not there for him as a caring or concerned father-figure, unlike in the days of his forebears. But all hope is not lost, as somebody, somewhere is not only concerned but truly cares as his actions have repeatedly shown.

And that person is none other than Mr. Tony Elumelu, the chairman, Heirs Holdings, chairman of United Bank for Africa (UBA), and chairman of Transcorp Group, Nigeria’s largest conglomerate with investments in power, hospitality, and oil and gas. He knows his onions on the secret of leaving a lasting legacy for today’s youth and even those yet unborn to come and cherish.

These came to the fore recently as he delivered the Annual Lecture at the 9th Convocation Ceremony of Nigeria’s premier private citadel of technology, Bells University of Technology, Ota. What more, the topic was thematically relevant: “The New Generation of African SMEs: The Diverse and Inspiring Experiences of 3000 – Tony Elumelu Entrepreneurs.” Many were therefore, eager to drink from the fountain of knowledge of the master of the game of youth entrepreneurship.

There were lasting lessons to glean from his thought-provoking lecture. According to Adim Jibunoh, CEO of Transcorp Plc Lagos, who delivered the lecture on his behalf, Elumelu is committed to empowering young African men and women towards the development of our continent. This is borne out of his deep-rooted belief that entrepreneurship is the single most critical ingredient for the continent’s economic empowerment and job creation.

The first lesson to note is that in spite of the challenges, opportunity abounds as there is sufficient evidence to show that for Africa to develop and catch up with the rest of the world, “we must reduce our dependence on foreign aid and natural resources and instead build and support the growth of businesses.” What is required is the commitment and dedication from both the government and private sector to supporting businesses in Africa. Even with the minimal support many entrepreneurs face, they continue to do amazing works.

In specific terms, Elumelu highlighted some fascinating facts with statistical figures. For instance, 80% of Africans view entrepreneurship as a good career opportunity, 22% of Africa’s working age population is starting new businesses – the highest rate in the world. The median age of Africa’s entrepreneurs is 31 – younger than in other developing regions. Firms with fewer than 20 employees and less than 5 years’ experience provide the most jobs in Africa’s formal sector.

Furthermore, 44% of African entrepreneurs start business to exploit market opportunities (opportunity-driven entrepreneurs) while African women are much more likely to start businesses than women elsewhere in the world.

What these statistics tell us is that there is latent entrepreneurial energy on the continent, which if properly harnessed can turn Africa into a global investment destination. Entrepreneurs foster innovation, they produce new ideas; provide better solutions; and pioneer new products or services. It is impossible to talk about America’s economic history without mentioning Henry Ford, Cornelius Vanderbilt and JP Morgan – men whose business acumen and ingenuity contributed significantly to America’s emergence as an industrial powerhouse.

With the benefit of this information, the Tony Elumelu Foundation, committed $100 million in 2015 to identify, train, mentor and fund 10,000 African entrepreneurs over a 10-year period. Its vision is to create 1,000,000 jobs and generate over $10 billion in revenue within that same time frame. He provided some greatly inspiring true-life experiences to bolster his confidence in this regard.

An entrepreneur like Victor Mhango from Malawi, Founder of Ziweto Enterprise obtained a seed capital from the Tony Elumelu Foundation as the first funding his business ever received. After the training and mentoring from TEF, Victor refined his business model, and now generates an average of $25,000 in revenue per month, reaching an estimated 5,000 smallholder livestock farmers per month with quality, reliable and affordable veterinary solutions that are revolutionising the delivery of animal health services in Malawi.

Another entrepreneur, Nkem Okocha has made it her life’s mission to create opportunities for others. Through Mamamoni, a Fintech Social Enterprise, Nkem invests in poor women by training and mentoring them and lending to them to fund their businesses so that they can increase their income. When women are empowered, they are able to make better educational, health and nutrition choices for their families.

Vital Sounouvou from Benin is another extraordinary beneficiary of the programme. Without any intervention from Mr. Elumelu, Vital proposed a feasible business partnership to UBA Benin which has become the first e-trade platform in Benin and one of few in the ECOWAS region. U-Collect allows Exportunity to receive international Visa and Mastercard payments, and to send payments to any UBA VISA card including XportCARDs. This puts Exportunity ahead of competitors like eBay and Amazon who are still struggling in the sub-Saharan African Market.

Today, Exportunity has engaged with over 750 clients and built a database of 85,000 trading with Africa! This is amazing, isn’t it? Yet, that is not all there is to testimonies of success for the young entrepreneurs.

Momaar Taal from the Gambia is the founder of Tropingo food, an agribusiness company that is focused on groundnut and mango processing and exports. Momaar now exports to Asia and Europe and is building a food dehydration processing facility in Gambia. He currently employs 140 people, of which 120 are women. Vital turned over $1.6 million in 2015.

These success stories are only a tip of the iceberg. From a survey conducted in 2016 to measure the impact of Elumelu Foundation on its entrepreneurs, it was discovered that out of those surveyed, there has been a 111% increase in their revenue and an 87% increase in job creation! Also, the innovations in Agriculture accounts for about 30%, ICT accounts for about 15% and manufacturing accounts for almost 10% of the entrepreneurs. All these testify to the power of sustained funding of business ideas on the African youth.

Elumelu’s Africapitalism philosophy posits that the private sector has a key role to play in the economic and social development of the African continent. It has to develop long term investments in critical sectors of the economy. However, a change of mind-set is necessary. For instance, “it’s absurd and difficult to expect people to invest in your continent when you decide to put your money in Swiss Bank accounts, when you don’t have belief in your continent”.

Furthermore, Africans must come up with innovative, home grown and bottom-up solutions for the seemingly intractable challenges that we continue to face. This food-for-thought would serve as a guide to the graduands ready to test the stormy waters of Africa’s effervescent economic experience.