Africa: Invest in Ourselves for Profit and Social Good – Elumelu
Tuesday, July 16, 2013
When President Barack Obama announced his administration’s US$7 billion ’Power Africa’ initiative in Tanzania this month, Nigerian businessman and philanthropist Tony Elumelu was at his side. His Heirs Holdings investment firm pledged $2.5 billion towards an estimated $9 billion private-sector fund to boost the electrification project.
A few weeks earlier, he stood with Rockefeller Foundation President Judith Rodin in Cape Town to announce the Tony Elumelu Foundation’s partnership with Rockefeller to launch the Impact Economy Investment Fund. The new fund, administered by the Global Impact Investing Network, is competitively funding 12-month projects by seven or eight applicants that demonstrate potential to create jobs and social impact. Elumelu sees both the for-profit and the philanthropic engagements as part of his commitment to the philosophy of ’Africapitalism’ – a prescription for private-sector investment in Africa’s future. Africans with the means to do so, he says, should commit to “long-term investment in key sectors that will create economic prosperity while addressing society’s needs, producing both profits and social worth”. It is a model he pioneered as a 34-year-old, investing $5 million to purchase a small Nigerian bank that became UBA – United Bank for Africa – a financial services group employing 25,000 people in 19 African countries, the UK, France and the United States. Before joining the Obama delegation, he sat down at his headquarters in Lagos to discuss his views on business, philanthropy and Africa’s development.
There is a major debate about whether Africa needs international assistance to move forward or whether aid should be curbed in favor of trade and investment. Are you promoting a sort of ’third way’?
First you must accept the fact that philanthropies, like the Bill and Melinda Gates Foundation, have done and continue to do a lot for Africa. Aid intervention also helps in situations as we experienced in Nigeria last year, when we had the flood disaster. Some of us were called upon to assist. Some of us also volunteered on our own to support the victims. I donated a billion Naira, which is about $6 million dollars, in addition to visiting the relief sites and talking to the people, trying to create hope for them.
At the same time, we need private-sector solutions to development issues. Personally, I believe that the best form of charity for Africa is aid for business. We need to fight, preach and believe that aid intervention should help businesses to do well. The private sector holds the key to sustainable development.
You think the private sector can create a sustainable solution in areas traditionally supported by governments or international aid, such as health?
Charity can be productively allocated to business solutions. Look at the issue of pharmaceutical breakthroughs. Additional approaches to society’s health problems will come through research. If you donate to research institutes and give them tax breaks and let them innovate, they will come up with solutions that can help address society’s health issues. And look at delivery of preventive health services. Sometimes there is local resistance from suspicion, lack of understanding. But if it is a for-profit intervention that engages the people from that area, they will interact with their own people – selling it – saying, “We need this.” So the question becomes: What can we do to break the dependency system, affect the health ecosystem and save lives in a way that’s sustainable?