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Africapitalism: Elumelu and Prospects of African Economic Community

Africapitalism is an economic philosophy attributed to Mr. Tony Elumelu, a Nigerian economist and Chairman of Heirs Holdings

Africapitalism. An ingenious word that can rub differently depending on one’s individual orientation, especially with the economic outcomes in many African countries after the Structural Adjustment Programme (SAP) of the 1980’s, which sought to promote greater involvement of the private sector in Africa’s economy.

More appropriately, Africapitalism is a rather novel economic philosophy attributed to Mr. Tony Elumelu, a Nigerian economist and Chairman of Heirs Holdings and United Bank for Africa (UBA), and Founder of the Tony Elumelu Foundation (TEF), that has the promotion of the private sector and entrepreneurial led approaches to resolving the economic development challenges of Africa.

Prof. Kenneth Amaeshi defines Africapitalism 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.”

Providing key sectors that influence African businesses with long term investment, for sustainable economic and social good is at the heart of the economic philosophy. The Tony Elumelu Foundation Entrepreneurship Programme of the Tony Elumelu Foundation (TEF) is praxis for Africapitalism. The programme which commenced in 2015, is a US$100million commitment from Tony Elumelu to provide mentorship, training and seed capital to 10,000 African entrepreneurs from every African country in 10 years with the goal of creating millions of jobs and wealth across the continent.

Just six years into the Programme, the Foundation has benefitted over 9,000 entrepreneurs across 54 African countries. The halfway mark for every programme provides an opportunity to do some assessment, and potentially recommend approaches that can not only guarantee sustainability, but possibly provide strategic fit to similar multilateral objectives.

Part of the reasons why Africapitalism requires some assessment and pointers for sustainability is because Africa has not been in lack of such philosophies. Dr. Nnamdi Azikiwe (Zik of Africa) was known for ‘Zikism’, a philosophy that itemized principles for Africa’s liberation and development. Kwame Nkrumah with ‘Consciencism’ that emphasises self-reliance by Africans, and Gamal Nasser with ‘Nasserism’, are other socio-economic and philosophical examples from African leaders in time past, which may not be very pronounced in contemporary times.

For Azikiwe, spiritual balance, social regeneration, economic determinism, mental emancipation and political resurgence are required to liberate Africa from bondage and underdevelopment. Economic determinism, which is the third principle of Zikism, identifies economic self-sufficiency as the basis for liberating the Renascent African. Stretching the argument, Africapitalism may be seen as an offshoot or idea with ideological similarity to economic determinism.

In more contemporary times, the Abuja Treaty 1991 of the Organisation for African Union (OAU), now African Union (AU) that creates the African Economic Community (AEC), has as its primary objective, “to promote economic, social and cultural development and the integration of African economies in order to increase economic self-reliance and promote and endogenous and self-sustained development.” Africapitalism can therefore be seen to be closely aligned with the objective of the African Economic Community.

The Abuja Treaty recognised Regional Economic Communities (RECs) as the building blocks of the AEC. A report by United Nations Economic Commission for Africa (UNECA) in 2018 however shows that most of the eight RECs are not on course for the attainment of set goals, which are required for a successful economic community.

Therefore, is there a possible role for Africapitalism and the Africapitalism Institute in resolving these REC shortcomings?

Nominally, the Tony Elumelu Foundation Entrepreneurship Programme has been a success, as the addition of the TEF-UNDP Entrepreneurship Programme, a partnership between the Tony Elumelu Foundation and the United Nations Development Programme (UNDP), announced last year a commitment to empower 100,000 African entrepreneurs across the continent in the next 10 years. It can however be argued that the Tony Elumelu Foundation Entrepreneurship Programme and other activities associated with the Tony Elumelu Foundation should be more focused on West Africa, if it is to have more impact and better chances of sustainability.

Its current approach may mean that the programme stretches itself too thin across Africa, by trying to engage 1,000 people annually in a continent of 1.2 billion people. A lot more can therefore be achieved in engaging the same number of entrepreneurs across the 15 West African countries, that have a combined population of 390 million people.

This proposed approach strategically aligns with the Abuja Treaty of 1991 that establishes the African Economic Community (AEC). The AEC has the African Union recognized RECs as the building blocks of the AEC, as previously mentioned.

The Economic Community of West African States (ECOWAS) is the REC for West Africa, where it is expected that the Tony Elumelu Foundation Entrepreneurship Programme be more concentrated. ECOWAS has entrepreneurship supporting programmes and policies such as single currency; Quality Management Training for production processes; ECOWAS Common Investment Coode (ECOWIC); ECOWAS Investment Policy (ECOWIP); West Africa Common Industrial Policy (WACIP); ECOWAS Investment Climate Scorecard; and ECOWAS Business Incubator for African Women Entrepreneurs (BIAWE) for just 300 women, in first phase and 200 in second phase; which needs to be scaled up for entrepreneurship, industrialization and investment to thrive in the region.

Revamping the ECOWAS Youth and Sports Development Centre (EYSDC) to increase its ability to train more west African youths, as centre has trained less than 1,000 youths; capitalization and strengthening of ECOWAS Bank for Investment and Development (EBID)- which has the promotion of privates sector activities as part of its core mandate through the financing of projects and programs of ECOWAS that are related to transport, energy, telecommunications, industry, poverty alleviation, the environment and natural resources; and enhancing the ECOWAS Volunteer Programme and Nnamdi Azikiwe Academic Mobility Scheme are required.

West Africa is a largely young population with 64 percent of population under the age of 24, and the ECOWAS Youth Entrepreneurship and Empowerment Programme (EYEP) should and can be consolidated with the Tony Elumelu Foundation Entrepreneurship Programme, as EYEP has capacity for only 20 youths in the first year.

Same consolidation and strengthening should be done for ECOWAS Youth Policy and Strategic Plan of Action, with improved implementation fervor. Why these have not been achieved under the two year MOU signed between ECOWAS Commission and TEF in September 2016 to promote small businesses, entrepreneurship and wealth creation is up for conjecture, but it can be mentioned that new and more effective approaches are required to deliver the desired results.

In particular, some of the objectives of the collaboration with ECOWAS Commission such as the spreading and strengthening of the philosophy of Africapitalism by socialising it with key stakeholders; and the teaching of entrepreneurship in the ECOWAS region, including Africapitalism as a study in the national education curriculum (starting from primary school) of ECOWAS member states, seems not to have been very successful. Whatever the reasons may be, the lessons learnt from the two year collaboration should provide TEF with the experience of working with African multilateral organizations, and also enable successful collaboration with the AU in attaining the AEC.

In providing more vigour to ECOWAS as a REC, Africapitalism can therefore be strategically aligned with the success of a true African Economic Community, driven by African entrepreneurs. If some of the issues prove too political, TEF and the Africapitalism Institute can provide conditional funding and technical support to organizations such as the Nigerian Institute for International Affairs (NIIA) to promote the desired objectives. In the US, Rockefeller Foundation, Ford Foundation, Carnegie Corporation and Bill and Melinda Gates Foundation provide support to think-tanks and organizations such as the Council on Foreign Relations and Brookings Institution for the promotion of defined international objectives.
It can also be stressed that the agenda these groups promote are primarily for US and North American benefits, before the Americas and the rest of the Western world. The Carnegie Endowment for International Peace actually has Democracy and Rule of Law, as one of its eight programs.

Economic activities can provide sustainable forms of international cooperation and integration. Trade within West Africa in the formal sector stands at 12 percent, and financial institutions can help facilitate trade as well as formalize the informal sector.

The United Bank for Africa where Tony Elumelu is Chairman, has operational presence in 10 out of the 15 ECOWAS member countries. UBA owns majority stake in the biggest bank in Burkina Faso, and is one of the four Tier 1 banks in Nigeria. This therefore positions the promoter of Africapitalism as a principal enabler in enhancing not only economic integration, but also the opportunities available to entrepreneurs across West Africa. Adopting this regional approach will to some extent, align with the concentric approach of Nigeria’s foreign policy, thereby securing the support of the Nigerian government.

What then happens to the rest of ‘Africa’ in Africapitalism? Using the geographical framework of the continent and the AEC, other philanthropists and people of means should be involved in a commitment towards the principles and philosophy of Africapitalism, but with concentration in their regions of Africa. For example, Mo Ibrahim through the Mo Ibrahim Foundation could be encouraged to contribute similar investment in North Africa; the Oppenheimers through their Brenthurst Foundation in Southern Africa; Vimal Shah, who as Chairman of BIDCO Africa has been providing mentorship to entrepreneurs in especially East Africa; and Paul Fokam in Central Africa.

In Southern Africa, the ‘Oppenheimer Elumelu Research Series’ which is an African development collaborative attempt between TEF and Brenthurst Foundation, provides a good footing for this AEC driven role. The Giving Pledge created by Bill and Melinda Gates and Warren Buffett is a demonstration of how people of means can be mobilized towards a noble cause, albeit in this case, towards providing private sector and entrepreneurial solutions to developmental challenges in Africa.

It is a responsibility that Tony Elumelu should take, if Africapitalism and the practice of it are to be sustained. Africa beckons on Elumelu to play similar role that the Gates and Buffet have played with the Giving Pledge, but this time with emphasis in Africa, and in alignment with the continental ambitions of the people of Africa towards the successful attainment of the AEC.

Managed properly, Africapitalism could therefore be the major catalyst that leads to the attainment of the goals of the Abuja Treaty and AEC. The Arab Maghreb Union (AMU) which is the REC for North Africa, has had it operations stalled since 2008. Mo Ibrahim’s Africapitalism activities could potentially provide the impetus for renewed cooperation in AMU and North Africa at large. The Africapitalism Institute (it no longer exists) already established by TEF, can provide the structural and institutional framework for this approach that aligns with the goals of the African Union and the AEC.

Is this proposed realignment of the Tony Elumelu Foundation Entrepreneurship Programme towards West Africa bound to meet some resistance? Probably, yes.

The fact that Tony Elumelu is Chairman and former Managing Director of UBA, which has operational presence in 20 African countries spread across most regions of the continent, as well as in the United States, United Kingdom and France means that he most probably has a worldview that is beyond West Africa. He has also been involved in ‘Power Africa’, which is an initiative supported by the US government to promote increased access to electricity in Africa. The vigour with which he has pursued and promoted the philosophy of Africapitalism makes it more challenging, and ideologies can be difficult to change.

However, such zeal can be adjusted to the practicalities of strategic planning for sustainability. Elumelu’s involvement in the ‘Power Africa’ initiative under President Obama has largely been concentrated in Nigeria through Transcorp Power, the owner and operator of the 972 MW capacity Ughelli Power Plant, where he has controlling interest- a demonstration of domestic practicality and realism on his part.

With the suggested approach, his electricity investment expansions can be targeted at the West African Power Pool (WAPP), which is an agency and approach by ECOWAS to enhance access to competitive and more reliable electricity across West Africa.
The approaches of similar foundations such as the Rockefeller Foundation and Carnegie Corporation which have been in operation for over 100 years, and who concentrate more on the US and North America are pointers to realist and more sustainable approaches.

A little digression here. Africapitalism exempts politics from its development concerns, while leaning more on economics and social side of development. While it is understandable that the need to remain apolitical is wise for TEF, it beggars belief as to how the absence of the appropriate political environment and investment in liberal democratic principles can produce the outcomes and enabling environment for entrepreneurship to thrive. This will be a discussion for another day.

Now back to the point. It is therefore expected that TEF and the Tony Elumelu Foundation Entrepreneurship Programme will be more engaged in programmes and policies of ECOWAS such as EYEP, BIAWE, ECOWIP, WACIP, ECOWIC and common currency issues for greater impact and sustainability of Africapitalism, while African philanthropists from other regions of the continent buy into the vision, and play similar roles in their regions of origin.

That way, it can be argued that the objectives of the African Economic Community for a prosperous Africa, as well as the vision Africapitalism, can be aligned, implemented and sustained. Surely, Africapitalism has come to stay.

Originally published by This Day