The Chairman of Heirs Holdings, Mr. Tony Elumelu has identified the pervasive stereotypes in the media around Africa and the resulting negative narrative as “Africa’s greatest challenge.”
Elumelu, who spoke at a gathering of senior policymakers and developments experts hosted by UK’s leading foreign policy institute, spoke on a panel alongside United Kingdom Minister of State, Department for International Development (DFID), Rory Stewart.
“I believe that the greatest challenge Africa has as a continent when it comes to attracting investment is in the way it is portrayed. Information presented about Africa is neither holistic nor properly contextualised, and has led to the kind of narrative that we have had for so long on Africa.
“As an investor, when all you have heard about Africa is corruption, how would you pass a positive investment decision to go and invest in the continent? The result is that the vicious cycle of neglect continues and is even reinforced,” he added.
Elumelu, who is the chairman of the United Bank for Africa Plc, therefore called for an urgent “reset of mindset,” to attract the level of global private capital that would drive job creation and reduce poverty on the continent.
“We must reset the way we see and discuss Africa. People do business with people they are comfortable with. Investors who repeatedly hear horrible things about our people and the continent will never invest here.
“We will continue to host national gatherings and seminars to discuss unemployment, poverty and income inequality if we do not fix the existing information asymmetry, the poor quality of information that is put out,” he added.
The Founder of the Tony Elumelu Foundation also rallied public and private sector stakeholders and the development world to increase support to African SMEs, describing them as “the lifeblood of our economy”.
Elumelu, who had committed $100m to African entrepreneurs, emphasised the critical importance of mentoring and funding for the survival of small businesses.
In a continent where only 700 companies generate over $500m in annual revenue, half the number in other regions, he called for targeted support to grow these small businesses into scalable companies capable of becoming big corporates in the future.
According to Elumelu, SMEs are known to be the largest job creators and should be prioritized because of the inverse relationship between security and prosperity – “when there is prosperity, security is not an issue, but when there are fewer jobs, insecurity heightens.”
Elumelu called on local and foreign investors to invest in electricity, stating that this more than any other investment “will encourage the creation and growth of businesses of scale in Africa.” According to him, “long term private investment in electricity infrastructure will create an enabling environment for business growth.”
Also at the event, a new Chatham House report, “Developing Businesses of Scale in Sub-Saharan Africa” which referenced Elumelu’s economic philosophy of ‘Africapitalism’ was launched. Africapitalism calls on the private sector to invest in strategic sectors for the long term to transform the continent. The report outlined the policy issues Africa must address to support the private sector to enhance job creation, encourage innovation and drive industrialisation.