-Says Tony Elumelu
November 1, 2019
By Hassan Gbassay Koroma
Founder of the Tony Elumelu Foundation, who also doubles as the Chairman of the United Bank for Africa, Tony Onyemaechi Elumelu has stated that he sees potential for investing in African youth and businesses every day.
“I see the potential for investing in African youth and businesses every day, through our foundation, as we empower young Africans with the tools required to grow their ideas and nascent businesses; non-refundable seed capital, mentoring and training, access to the largest online platform for African entrepreneurs – TEF Connect – which connects them to other entrepreneurs on the continent for collaboration as well as access to investors for second-stage funding,” he said.
While speaking on Wednesday 30th October at the Invest for Growth in Africa Conference Organized by the French Ministry of Finance and Economy, in Paris, France, Mr Elumelu said Africans do not need aid – rather its young people need investment.
He said 60% of Africa population is below the age of 25 and it has the youngest workforce in the world and mostly mobile, thus adding that such mobility can sometimes create tragedy as Africa youth are driven across the Mediterranean.
He further noted that Africa youth population has the potential to create businesses that would contribute to economic growth and also create jobs for millions of other African youth anchoring families, sustaining communities, and creating sustainable growth.
He said his foundation is the leading African philanthropy that is committed to empowering young African entrepreneurs from all 54 countries on the Africa continent, which is now 5 years into a journey of catalysing young people, with seed capital, training and mentoring.
He said it is important to salute the important work that France Invest is doing to ensuring the growth of start-ups, SMEs and mid-caps in France, which shows that private equity can be a force for the positive development of companies and underlining the criticality of the SME sector in any economy.
He said Africans need to encourage the growth of SMEs so that they have the ability to create jobs and wealth in communities, noting that their focus had been primarily on the creation of jobs and employment, through the public sector, which has to change.
“We know there is only so much that governments can achieve through direct job creation and it is the private sector’s responsibility and role to lead the way in the sustained creation of wealth and the broader social benefits that flow from a vibrant private sector, he said.
He added that in Africa today, they have a large youth population, who are eager and innovative and are looking at solutions to problems in their communities but are hampered by the access to capital and investment, mentoring and training.
He said according to the International Finance Corporation IFC, private equity accounts for about $200 billion in investment worldwide each year, adding that only 10 percent of it reaches emerging markets in Africa, despite the good intentions of the development finance institutions.
He said Africa need to do much better and be much smarter in channeling these funds to emerging markets, which present huge opportunities as well as risk for investors, thus saluting French companies, such as Total, Bouygues, Accor, Orange and Bolloré, who have accepted this challenge.
He said in many Africa economies, capital markets are neither nascent nor non-existent, small and medium size enterprises lack access to debt finance and cannot secure critical financing through private equity.
He said there is a significant energy power gap across the continent, which increases the cost of business and is often the reason SMEs are unable to scale their enterprise, noting that power is an opportunity for an entrepreneur and it is a call to anyone with innovative solutions to the problem to reap the benefits of investing in what he described as underdeveloped sector, from small off grid networks, to hydroelectric, to green energy.
He said through their Group’s power company, Transcorp Power, they have invested in power and they are today the leading power generating company in Nigeria, with an installed capacity of 900 Mega Watts and are currently closing the acquisition of another 1000 Mega Watts to double their capacity.
He said they are interested in innovation and disruption to light up schools, power hospitals and drive industry, adding that he has a philosophy that Africapitalism champions a private sector led approach to the development of the continent through long term investments that create economic prosperity and social wealth.
“We are all aware of the skill and knowledge gap, we need people like you to come to the continent and fill this gap, in doing so, you will undoubtedly reap the benefits of doing so. I am fully aware of the challenges of doing business in Africa, we have long been plagued by bureaucracies – red tape- corruption and lack of infrastructure,” he said.
He said things are changing and the environment is getting better for business, and that Nigeria has moved up from many places in the World Bank ease of doing business report, in 2 consecutive years, a step he said was in the right direction.
He said tax laws still need to be simplified, bureaucracy streamlined, and the rule of law firmly entrenched in their business practices across Africa to ensure that investors have confidence in the system and do not shy away from the continent.
He said they must be prepared to take risks if they are to drive lasting benefits, noting that the great industrialists of recent history, the Rockefellers, Vanderbilt’s the Rothschild’s the Peugeots and the Dassault’s recognised that risks must be taken for great rewards to be obtained.