On behalf of the Tony Elumelu Foundation, Africa’s largest philanthropic organisation committed to empowering African entrepreneurs, it is an honour to be here with you today at the 2nd Chevening Nigeria Alumni Leadership Summit.
Africapitalism. A deceptively simple notion, but a powerful one that has the potential to remake a continent, and put Africa on an equal economic footing with the rest of the world.
Africapitalism calls on Africa’s private sector to play a leading role in the continent’s development because after all is said and done, the future we all want for ourselves is one of our own making. Thus, the concept of Africapitalism is defined as the private sector’s commitment to African development through long-term investments in strategic sectors of the economy that create both economic prosperity and social wealth. It focuses on private sector growth as the primary driver of Africa’s development, and at its heart, calls for a new kind of capitalism: one that focuses on long-term investment in key sectors to spark the growth of African-owned businesses, stimulate the creation of jobs, and create, in a sustainable form, both economic and social good. Essentially, Africapitalism embodies a private sector-led approach to solving some of Africa’s most intractable development problems.
Africa is capitalism’s final frontier, and as such it offers boundless economic opportunity — not just for investors and entrepreneurs to build successful businesses, but also for economic growth and development to solve many of the continent’s most pressing social challenges. This is the heart of Africapitalism.
We do not suggest that entrepreneurs should build companies in Africa or that investors should invest in Africa out of goodwill, in essence because they are the economic equivalent of Father Christmas. Instead, we suggest that Africa offers compelling economic and business opportunities that can, at the same time, meet a range of social objectives.
In fact, over the past decade we have seen that, in many respects, private sector development has much greater potential to improve self – sufficiency and prosperity in both the economic and social spaces of Africa than charity and development assistance ever have, or ever could. Unfortunately, the story heard about Africa is more often about the charity than the prosperity, something we hope to dispel through our words and our actions. No amount of well – intentioned charitable assistance in healthcare, education, agriculture, and other sectors is able to accomplish the same results as an unleashed and capacitised local private sector.
Africa’s burgeoning private sector and its growing domestic industries have already delivered significant returns to investors and entrepreneurs, while also addressing many of Africa’s persistent structural challenges. Consider our Founder, Mr. Tony O. Elumelu’s own experience transforming the defunct Crystal bank into Standard Trust Bank (STB) borne out of a social mission to democratise the banking sector in Nigeria at a time where fewer than 20 million people in Nigeria had bank accounts. STB has today grown to today’s United Bank for Africa, now one of the largest banks in Africa — with more than 16 million customers, over 25,000 employees, and operations in 23 countries, including the United States, the United Kingdom, and France.
Kenneth suggests four principles that underpin the Africapitalism philosophy: sense of progress; sense of parity; sense of peace and harmony and a sense of place and belonging. That is, a sense of progress which ensures that both financial and social wealth are created; a sense of parity which ensures that the benefits of the progress are broadly shared; a sense of peace which alleviates the contestations and struggle that underlines capitalism and a sense of place which takes the African context into consideration.
In much the same way, Entrepreneurship is the cornerstone of Africapitalism. We cannot speak of the African private sector without special reference to African entrepreneurs. If Africa is to meet the demand for new jobs, and to create wealth sufficient to sustain domestic economic growth, we must sharpen our entrepreneurial focus and make faster progress. Africa’s large and growing population of young people means millions of new jobs need to be created each year. This demographic explosion can spell an economic boom or doom for the continent. Governments and big corporates alone cannot provide employment for the millions of young Africans entering the job market every year.
Thus, the concept of Africapitalism gains resonance, validity, and momentum. It exhorts Africa’s entrepreneurs to join the campaign and put their ingenuity and innovation to work in order to be amply rewarded. This is why at the Tony Elumelu Foundation, we have committed $100m to empowering 10,000 African entrepreneurs within this decade, by 2024. So far, we have empowered over 4460 entrepreneurs, because we believe in the unique capability of African entrepreneurs in transforming Africa by identifying unique gaps in the market for specific products and services, tap into strong local networks and unique insights on consumer demand, to create innovative and disruptive solutions to complex challenges.
As Kenneth also states, Africapitalism is a collaborative ideology involving several stakeholders. While inviting investors — foreign and domestic — to be forward – thinking and seek long – term investments where doing well delivers value to the bottom line, it also calls out to African governments to act in partnership with the private sector in accomplishing from the bottom up what cannot be imposed from the top down. Governments must create the enabling environment, serve as objective regulators but most importantly, create and sustain policies that improve the enabling environment for millions of potential job creators to succeed rather than for a small number of government or private entities.
To illustrate Africapitalism in practice, Kenneth employs the case-study of ‘Good African Coffee’- a Ugandan company founded by Andrew Rugasira with the aim of reversing the fortunes of African coffee-producing countries by capturing the entire value chain of coffee production and sales. Good African Coffee became the first company to sell an African-owned coffee brand directly to United Kingdom (UK) retailers, and has also entered the American market. Beyond its profitability, it has placed community development at the center of its business strategy by company prioritising a quadruple bottom-line business approach which incorporates the farmers, the communities in which they live, shareholder and employees as stakeholders.
Africans must lead by example, investing in Africa to build economies and domestic industries that rival those in other parts of the world. Africans can no longer wait for outsiders to make the first move, or depend on outsiders for validation of Africa’s investment opportunities before taking up the mantle themselves. Ceding “first – mover” status to outsiders potentially puts them in the driver’s seat, once again leading to the forfeiture of Africa’s economic self – determination. Good African Coffee demonstrates that having a social mission as a core part of an organization does not have to come at the expense of profitability. The company has been successful both in monetary terms and in empowering previously marginalized farmers in Western Uganda.
The company’s adoption and commitment to the tenets of Africapitalism, that have played a key role in its success, offers a blue print especially for other businesses operating in Africa that seek lasting socio-economic transformation in the communities in which they operate.
In conclusion, why Africapitalism?
- Because, in Africa, the goal of economic development cannot merely be growth. For decades, even in Africa’s fastest growing economies, growth has had less of an effect on poverty than in Latin America and the Caribbean, emerging Europe, and Central Asia. Why? Because until now the growth process had not been inclusive enough. Growth has not been driven by long – term investments that add value domestically, but instead by the export of raw commodities at continually increasing prices. Africapitalism seeks to change this reality.
- Because there is no substitute for private investment and private – sector development when it comes to advancing sustainable economic security and socioeconomic transformation. As Africapitalism espouses, this of course has the greatest impact when it comes with a long-term horizon and an eye on increasing local value creation in Africa.
- Our youth bulge where millions of young Africans are entering the labour market can be a dividend or disaster if these young people are not engaged in meaningful work. Africapitalism addresses this by focusing on African entrepreneurs whom have proven themselves more capable of creating new jobs and incomes, driving innovation and solving social and economic problems than governments and aid agencies — if provided a stable, safe environment in which their businesses can thrive.
- For too long in Africa, we have outsourced the role of development to government alone. Africapitalism identifies governments’ appropriate role as to facilitate private – sector development by ensuring ease, safety, transparency, and equity; its role is not to control or manage from the top down.
- Indeed, when one considers the scale of job creation required in Africa over the next 30 years: the only viable path to success in this regard is economic democratization and business development.
Africa has changed and will continue to change, and those who are able to see this change will be able to participate in what promises to be an economic transformation of epic proportion. Dawn has broken over the world’s last economic “frontier.” This is an exciting time in Africa, a time to shed preconceptions, raise expectations, and recommit to the power of human industry.
There are many roles for many participants, from government leaders, to private investors, to individual entrepreneurs, to philanthropists and development professionals, to consumers, to educators, to labourers and to problem solvers — every citizen of every stripe. And on behalf of the Tony Elumelu Foundation, we are excited to be a part of the coalition pushing to mainstream the Africapitalism concept in the University curricula as a way forward and priority next step.
But first, all need to wake up to the reality that the old Africa is no longer. Before we can make the most of the opportunities now at hand, we need to be committed to actualising the Africapitalism ideal of a hard – working, innovative, economically diverse “new” Africa that is right here in front of us.