LAGOS, Nigeria – “Nobody is going to develop Africa except us,” writes Tony Elumelu, entrepreneur, philanthropist, and founder of The Tony Elumelu Foundation. In the midst of calls for aid from the African continent – and its increasing opportunities for foreign investment and development – Elumelu’s bold report “Africapitalism: Path to Economic Prosperity and Social Wealth” seems out of place, but certainly not incorrect. As the creator and key proponent of the term “Africapitalism,” Elumelu highlights obstacles that Africa faces, advocating that Africa not look outward for the help it needs.
“Africapitalism,” a term Elumelu coined, describes “long-term investment that creates economic prosperity as well as social wealth.” Instead of focusing on foreign investment on the continent, however, Elumelu is quick to assert that private sector development — money coming from wealthy philanthropists from Africa itself — has a greater capacity to make Africa self-reliant.
Elumelu recognizes that those who invest in entrepreneurial efforts “do not invest out of altruism” but for capital, but points out that business investment creates social value as much as economic value. The dangers of thinking in terms of short-term value — i.e. the risk of societal and environmental harm — should be carefully addressed, Elemelu argues, by “addressing needs and challenges” left in the wake of short-term speculative investment.
Furthermore, Elumelu asserts that how people invest in Africa must change because the opportunities for investment have changed. With an evolving population, increasing reforms, and expanding workforce, Africa has developed consumer groups with increasing capacity for spending. At the same time, Africa’s wealth of natural resources has opened avenues of extraction and profit. But Elumelu poses a distinct question from the perspective of the expanding class of African consumers: “Which company would you choose to do business with, one that creates jobs and wealth, or one that ships resources and profits out of the country and leaves behind merely scraps, or worse, degradation?”
The role of government in internal investment is also addressed. Part of what blocks regional cooperation, Elumelu points out, is the reluctance of governments to lift restrictions on trade, business licenses, taxes and fees, and visas. Equally important is the necessary environment that encourages private investment — a “transparent, supportive” government that is efficient and open. “In fact,” Elumelu writes, “It is an essential responsibility of African governments to create a hospitable environment for private investment. It should be a primary focus as it is something only they can do.”
Even though wealth is made on-continent by many African entrepreneurs, Elumelu strongly rebukes those entrepreneurs who move their wealth overseas. This practice, Elumelu argues, cedes “first-mover” status to foreign investors, “once again leading to the forfeiture of Africa’s economic self-determination.” Self-determination is key for Africa’s economy, as without it Africa’s future is in the hands of those with less motivation to create lasting economic and social value.
Elumelu’s call for “Africapitalism” has been answered by a number of African billionaires who have made entrepreneurial investment a top priority with their wealth. This kind of philanthropy — “by Africans for Africans” — provides keen insight into Africa’s economic future and the cornerstone role of African capitalism in the elimination of poverty.
– Naomi Doraisamy
Source: Tony Elumelu Foundation,Daily Nation,All Africa
Photo: This Day Live