In an attempt to stimulate the African economy, some organisations are stirring entrepreneurial growth on the continent, with Tony Elumelu Foundation leading the pack. Adeola Akinremi writes
Rose Abba, 32, an entrepreneur from Jos, Plateau State, one of Nigeria’s middle belt states, had become distraught after many years of struggling to access loan for her business. The efforts she had put into her tourism business just a little over four years ago after graduating from university have yielded some positive results that are now motivating her to forge ahead. But Abba is stuck without finance to take the business to the next level. Her story resonates with many of her ilk across Africa.
In Kenya, Eric Kinoti, a young entrepreneur who sits atop five powerful companies today had to struggle through time to expand his business with no one willing to trust him with finance.
“I had capital issues when I was starting up, but I didn’t let this hold me down because I am an avid believer in ideas. I believe that ideas are the biggest capital one can have. I was without money to pay rent and was indebted to shylocks who almost auctioned my business and went without sales for awhile. But in the end today, they are all success stories,” Kinoti said in an interview.
Yes, the odds are favourable to many small entrepreneurs in Africa. They simply do not have access to the loans that could allow them to grow their businesses.
But the Tony Elumelu Foundation’s $100 million pan-African entrepreneurship initiative will help change all of that.
“If you think that you can be Africa’s Steve Jobs, then 2015 is the year for you to start the journey,” said Nigerian stylish banker and billionaire, Tony Elumelu, in a video message to stimulate the interest of several young entrepreneurs in Africa in the Tony Elumelu Entrepreneurship Program (TEEP) launched last December.
And with countless hits already recorded on the foundation’s website in the last three months since the application opened for the program, the importance of such message from Elumelu to Africans is immense, especially coming at a time, when the growth prospects of the continent are good, but many young people are estimated to be out of work and many more in poor employment. In a few days, precisely on March 1, when the application closes and selection process begins, the stories of many entrepreneurs on the continent would be changing as well.
That’s exactly what the Managing Director, International Monetary Fund, Christine Lagarde has been canvassing for. Last year, at a summit themed ‘African Rising’ in Maputo, Mozambique’s capital, Lagarde who spoke to a group of African entrepreneurs and government officials gave a blunt statement of fact.
She said: “Let me be clear: Africa’s greatest potential is its people. They are the key for the region to fully capture the dividends from population growth. By some estimates, a one percentage point increase in the working age population can boost GDP growth by 0.5 percentage points. This is huge. For this to happen, however, “good” jobs need to be created in the private sector. Today, only one in five people in Africa finds work in the formal sector.”
To that, Elumelu gave his nod. It is what he has been doing with his Africapitalism, an idea that is unique to him.
“Africapitalism is not capitalism with an African twist,” he likes to say. “It’s a rallying cry for empowering the private sector to drive Africa’s economic and social growth.”
In Africa, Nigeria is not alone in its inability to provide jobs for its teeming population, especially the youthful demography. It is the same for her entrepreneurs who are looking for finance to move their businesses to the next level
The problem is continental, so Elumelu is looking at the continent with wide spectacle and he’s not doing that alone. And perhaps he’s motivated by an African proverb that, ‘if you want to go quickly, go alone. If you want to go far, go together,’ he has enlisted the support of many inside and outside of the continent to drive the vision. His namesake, the former British Prime Minister, Tony Blair is one of them.
According to the International Labour Organisation (ILO), in sub-Saharan Africa, paid employment opportunities are scarce and the vulnerable employment rate, at 77.4 per cent in 2013, remained the highest of all regions.
Statistics from the ILO also showed that in North Africa, “the economic growth in 2013 proved too low to generate sufficient employment opportunities for a fast growing population, and unemployment remained highest in the world.”
The problem is there, but where will the solution come from? Governments on the continents have been reported to be assailed by high rates of corruption, and many have blamed the exponential rise of the population, pointing out that available resources may never meet up with the provision of basic human needs.
However, entrepreneurship, which was one of the major stimulants of the British industrial revolution that changed the world, has been touted as a solution to the job problem in Africa.
For instance, the Tony Elumelu Foundation Entrepreneurship Program (TEEP) is expected to create 10,000 businesses across the 54 countries on the continent. The businesses will have the potential to generate 1,000,000 new jobs and contribute $10 billion in annual revenue to an African economy that sorely needs a boost.
According to the foundation “the programme is expected to identify and support 1,000 entrepreneurs from across the continent each year over the next decade” and it is open to citizens and legal residents of all 54 African countries. “Application can be made by any for-profit business based in Africa and in existence for less than three years, including new business ideas. The application portal is available in English, French, and Portuguese and applications will be accepted in these three languages.”
All successful applicants will be entitled to $10,000 each, and will be required to participate in a comprehensive programme (a customised 12-week business skills training course, mentoring, an entrepreneurship ‘boot camp’, participation in the annual Elumelu Entrepreneurship Forum, among others) designed to equip them to build successful value-adding businesses.
The Programme Director, Parminder Vir, has pointed out the initiative is more than a grant. “We are not calling it a grant because the money has to be earned by the entrepreneur. They will apply on the foundation’s website and go through a rigorous selection process, competing with all the other applicants across the continent,” he said.
Vir, during the launch, also hinted that “the business plan should have the market potential of the idea, a clear financial model and the potential to be replicated across various markets.”
The billionaire who initiated the idea and serves as the Chairman of Heirs Holdings, the melting pot of his businesses, Elumelu, has noted that “entrepreneurship is the cornerstone of African development and I firmly believe that there is nothing I have accomplished that other young people can’t replicate. Thus, I am determined to ensure the next generations of entrepreneurs are empowered to turn their entrepreneurial aspirations into real and sustainable businesses that will drive economic growth and job creation.”
At the launch of the programme, Elumelu also observed that it “is far more than a funding initiative or networking opportunity. It is an act of faith in our entrepreneurs and our young people to transform our continent; to be engine for the creation of both economic and social wealth, putting into practice what I have called Africapitalism.”
Elumelu also pointed out that “governments cannot create the capacity of jobs the continent needs. What the foundation is doing is to help drive businesses that will in turn create jobs. What governments should do is to create an enabling business environment, such as easing licensing requirements, increasing access to power, and ensuring the rule of law.”
The initiative is supported by a selection committee of established African business leaders, from the Harvard-trained Director of Investments for Omidyar Network’s Government Transparency Initiative, Ory Okolloh; the co-founder, Nigerian job search site, Jobberman, Dr. Ayodeji Adewunmi; the World Bank Group’s Country Director for Senegal, Cape-Verde, the Gambia, Guinea Bissau and Mauritania, Dr. Vera Songwe.
“The program is truly pan-African, it is holistic, it is unique,” Jobberman’s Ayodeji, who is also a member of the selection committee told Voice of America. “You know we are bringing together under one umbrella all the critical tools that the entrepreneurs need to succeed.”
Adewunmi was also confident that the climate was perfect for African entrepreneurs to emerge. “I think in general, it’s a perfect time to be an entrepreneur on the continent. A lot of the economies in Africa are changing very fast,” he said. “The economy on the average is growing about five percent of GDP (Gross Domestic Product) growth rate across the continent. And of course, I think it is also an opportunity for entrepreneurs to be able to look beyond today into the future with respect to helping other people.”
Apart from Adewunmi, the selection committee for the programme will include Ory Okolloh and Vera Songwe. Others are: Chief Executive Officer, Senegal’s Sovereign Wealth Fund, Amadou Hott; Chief Executive Officer, Bestman games Ltd., Opunimi Akinkugbe; Founder, First Atlantic Semi-Conductors and Microelectronics, Ndubuisi Ekekwe; Chief Investment Officer, Heirs Holdings, Sam Nwanze; Chief Executive Officer, Java Foods, Zambia, Monica Musonda; Managing Director and Chief Executive Officer, Rimsom Strategies, Angelle Kwemo; Chief Executive Officer, Spotone Global Solutions, Marieme Jamme; and Chief Executive Officer, the Tony Elumelu Foundation, Wiebe Boer.
In supporting entrepreneurship on the continent, the Elumelu Foundation is not alone. Ernst and Young (EY), a global leader in assurance, tax, transactions, and advisory services, is also promoting business innovation in Africa. EY is currently accepting applications for its 2015 ‘Accelerating Entrepreneurs’ Business Incubation Programme and C.J Kujenga, strategic growth markets leader for EY Africa, has noted that applications from African countries are strongly encouraged.
“Entrepreneurship is one of the five priorities for action that EY believes will be most critical to a successful African future. This makes entrepreneurship a major focus area for EY Africa and we strive to ensure that we present a consistent and visible message about the role it can play in developing the economy of Africa,” Kujenga told Disrupt Africa.
He also observed that “entrepreneurs have a vital role to play in any healthy and vibrant economy. Their contribution is increasingly important, with countries facing some of the most challenging societal issues of our time: challenging economic conditions and high levels of unemployment.
“In order for Africa to achieve its potential, it needs entrepreneurs who build large organisations with integrity, add value to their markets, develop skills on a large scale and create sustainable jobs. The ability of entrepreneurs to innovate, inspire, others and power a business along the difficult journey from start-up to market-leader is truly extraordinary. Entrepreneurs ask the questions that others don’t and in doing so challenge the status quo. These entrepreneurs can drive social change and create shared value.”
The Coca-cola Foundation is another builder of entrepreneurs on the continent with its programmes focusing on mentoring and grants provision.
What more, in just three weeks, after TEEP was opened to the public on January 1, no less than 5,000 people submitted their proposals.
And to do the arithmetic, the numbers of entrepreneurs who would have applied within the three months time frame, will definitely make the job of the selection committee a hard one. It points to one thing: Africapitalism.
Originally published on ThisDayLive by Adeola Akinremi