On October 14, 2017, Mr. Tony Elumelu, the Founder of the Tony Elumelu Foundation, and the Chairman of both Heirs Holdings and United Bank for Africa Plc, addressed entrepreneurs, policymakers and other shareholders during the Tony Elumelu Foundation Entrepreneurship Forum. The Forum is a key component of the Tony Elumelu Entrepreneurship Program (TEEP) which selects 1,000 African entrepreneurs and supports them with a combined $10 million as part of building entrepreneurial ecosystems in Africa. Mr. Elumelu had committed $100 million over ten years for TEEP.
He spoke before more than 1,300 entrepreneurs including alumni of TEEP, Vice President of Nigeria, governors, ministers and representatives of corporate entities. The key thrust of the talk was the Africapitalism which is an investment philosophy he has pioneered globally.
In this piece, I will summarize his presentation which I listened live in the Nigerian Law School auditorium, Victoria Island, Lagos.
Before we go into Mr. Elumelu’s presentation on Saturday, I will like you to read the basis of his talk by understanding the vision that drives the Foundation and TEEP. This will give you a good perspective as I summarize and analyze his presentation.
As an entrepreneur myself, I understand what it feels like to yearn for a lifeline, to hope for a ‘big break’, to look forward to enjoying some luck.
In 2010, we launched the Tony Elumelu Foundation to spur our continent’s development through entrepreneurship and competitiveness.
As an entrepreneur myself, I understand what it feels like to yearn for a lifeline, to hope for a ‘big break’, to look forward to enjoying some luck. As a matter of fact, part of my own success is owed to someone that believed in me, and was prepared to invest in my talents and take a bet on my future.
It is for this reason that I developed the economic philosophy of Africapitalism, which positions Africa’s private sector and most importantly entrepreneurs, as the catalyst for the social and economic development of the continent. Based on this guiding philosophy, we have launched successful programmes and forged meaningful partnerships with stakeholders across the globe.
In 2015, I heralded the ‘Decade of the African Entrepreneur’ by committing $100 million, to the TEF Entrepreneurship Programme – the first of its kind and scale in Africa. Since then, our alumni – across all 54 African countries – have begun growing businesses and improving lives, contributing to our goal of empowering 10,000 entrepreneurs who will collectively create one million jobs and generate $10 billion in revenue.
We are committed to giving from the perspective of empowering the recipient, rather than making them dependent on us, because prosperity is assured only when ALL Africans are financially independent. My vision for the Foundation is to unlock the obstacles that Africa’s entrepreneurs face, so that they, rather than aid agencies or governments will spur the continent’s transformation.
At the end of our 10-year commitment, thousands of businesses will grow and flourish, driving sustainable prosperity across Africa. This is my vision. I invite you ALL to learn about what the Foundation does, what we hope to do and to discover what we can do together. In doing so, I am confident that we will achieve sustainable development in Africa.
That is indeed this summary. But I hope you can read on.
The Africa Challenge
Mr Elumelu began his presentation by acknowledging King Ebitimi Banigo, the king of the Okpoama region in Nigeria’s Niger delta. King Banigo had owned a bank which Mr Elumelu worked. Tony used the moment to show appreciation for the opportunity his mentor provided to him. It was a very fascinating moment in the auditorium.
Then he began his presentation by examining the challenges African youth face today with dwindling job opportunities. He noted that youth need jobs. With jobs, they will not be leaving the continent. Jobs will reduce the mindless deaths in the seas as many young Africans migrate to Europe and other places. He also noted that with opportunities at home, these young people will not be selling their organs just to survive. He made a case that Africa needs hope. That hope will reduce vices and crises that precipitated to the Arab Spring which saw upheavals in most parts of Northern Africa. Opportunities will solve the problem of human trafficking and restore the dignity of our citizens.
The Development Paradigms
Mr. Elumelu noted that African governments and their largely foreign development partners have been working for years to provide roadmaps that can help provide the opportunities for our young people. These entities have tried many models and initiatives but the impacts have been marginal. The lack of opportunities remains because the solutions offered have not been extremely successful. He noted that about $500 billion has been spent through different programs by development partners and yet at the end, the African youth remain with limited hope. Largely, the efficiency in the deployment of the capital has not been stellar. So, he pushed that the world needs to rethink how it is engaging in the development of the African continent.
He has an answer: the Africapitalism through vehicles like TEEP. TEEP offers a new development model in Africa, built and organized around young people under market-driven forces.
A New Model – Africapitalism /TEEP
Tony is the father of Africapitalism, an economic philosophy which “positions Africa’s private sector and most importantly entrepreneurs, as the catalyst for the social and economic development of the continent”. His vision is that he can build a vehicle to use business to seed a new Africa where entrepreneurs will create jobs and prosperities in the continent. By empowering these young entrepreneurs, their businesses will grow and over time, they will have places people can find jobs to earn decent livelihoods. It is a virtuous circle that the entrepreneurs supported by the Foundation will blossom providing opportunities in their local African communities. Those communities will progress and the welfare of the citizens accelerated. The impact will be that hopelessness will be replaced with hope across many African communities. Simply, TEEP wants to accomplish the following:
- Unlock potentials in young Africans
- Overcome hopelessness in the land through economic prosperity
Examining the TEEP Development Model
The core of the TEEP Development Model is anchored on free enterprise. It is based on the construct that the path that will fix Africa will go through the private sector and young African entrepreneurs are going to be the catalysts to that growth and development paradigms. TEEP does believe that by investing directly in the young Africans, it can have more catalytic impacts across African communities if the entrepreneurs are fixing and improving challenges in their places through markets.
Mr Elumelu noted that entrepreneurs and markets can redesign Africa. He noted these key facts:
- Steve Jobs started Apple. Apple has a market capitalization in excess of $800 billion with cash reserves of about $300 billion
- Bill Gates started Microsoft. Microsoft has a market capitalization of nearly $600 billion
- Jack Ma started Alibaba. Alibaba has a market capitalization of nearly $460 billion
When these companies are compared with a big country like Nigeria, the point becomes obvious that entrepreneurs can have huge impacts beyond whatever government can do. Nigeria’s foreign reserve is a paltry $35 billion, far below what a technology company has in its bank account. Mr. Elumelu sees this as a reason why the use of markets to accelerate development will have more impacts than what most developmental organizations are doing.
Key Elements and Factors for Success
As he explained the nexus of the TEEP program, he noted three core elements for the African entrepreneurs to triumph:
Mr. Elumelu noted the following as factors for success which entrepreneurs with the above noted key elements will need to succeed:
- Operating Environment: The operating environment deals with the whole nexus of legal, infrastructure, policy and other enablers and anchors that can help organizations thrive. African entrepreneurs need those for them to compete effectively in an increasingly globalizing world. He also noted that within these operating environments, there are inhibitors like negligence of the needs of entrepreneurs by policymakers, lack of meritocracy, and problem of entitlement mentality.
- Transmission Mechanism: Here, entrepreneurs will need to have the ability to effectively transmit ideas into products and services. In other words, they need to take action besides any idea they may have. And when that action is taken, it needs to lead to products and services which markets want.
The Peerless Philanthropist
Mr Elumelu noted that only Africans will develop Africa. He explained that luck should be democratized through the institutionalization of pillars which can help build businesses. He made a reference that Steve Jobs might have died with his ideas. But America did the right thing by making it possible for him to impact his world through structures and catalysts made possible in that nation. Africa needs to find ways to support its innovators.
According to him, he is leaving a legacy and every African should aspire to do something. Our strength is the legacy we leave behind and not the size of our bank accounts. That passion is the motivation for the $100 million commitment to stimulate an entrepreneurial ecosystem in Africa through the Tony Elumelu Entrepreneurs. The program is sector agnostic and extremely competitive with only 1,000 accepted this year out of excess of 98,000 that began the application. (Disclosure: I am one of the selection committee members.)
He concluded by making a case that we need to transform Africa to ensure that poverty is eliminated. Otherwise, there is a huge risk that our continent can be gone if our youth continue to struggle with lack of opportunities. We want a future with unbounded opportunities in the continent and he challenged Africans to commit to build our continent since “no one but us will develop Africa”.