Africapitalism: Re-writing the narrative since the turn of the 21st century
‘Young entrepreneurs and those they inspire are the lifeblood of Africa’s rise.’[1]
‘Africapitalism’ is a term coined by a Nigerian philanthropist, investor and former banker, Tony Elumelu who believes that private investment can be transformed into social wealth. [2]
According to him, Africapitalism has the potential to create a bridge between entrepreneurship and societal development. In his words,
‘African entrepreneurs will play a central role in bringing together private wealth and public need. They will prove a key tenet of Africapitalism: that it is both necessary and possible for entrepreneurs and society to prosper simultaneously’[.3]
Today, this philosophy is pervading different facets of the business environment in different African countries. Yet, the story captured of Africa by the Western media still paints a grim picture of suffering and poverty. Since the turn of the 21st century, the narrative is changing. This change is propelled by individuals and businesses driving innovation with social impact which has a transformational effect across Africa.
In 2006, Mo Abudu, a media entrepreneur, started the talk show, Moments with Mo. The goal was to promote local content tailored to the needs of the African market. At the time, the talk shows were dominated by the Western media which content could not be identified with by Africans. Her success as a talk show host gave an added boost to finding EbonyLife TV in 2013. Ebonylife TV currently airs in 49 African countries, in the UK and the Carribean.[4] The TV station focuses on showcasing informative and entertaining programs portraying Africa in a positive light. Her mission is to use EbonyLife TV as a platform to empower women and youths across the African continent and to engage governments in such a way that the creative industry can contribute meaningfully to GDP like in other parts of the world. In 2015 she delved into film production. One of her films, The Wedding Party became the highest grossing movie in Nigeria with revenue estimated at $1.3 million.[5]
In 2007 Sangu Delle founded Golden Palm Investments (“GPI”) as an undergraduate at Harvard college.[6] His personal experiences of Africa’s need for jobs and economic empowerment was too much to ignore. In one of his TED talks, he emphasized the need for supporting fewer higher impact entrepreneurs to build businesses that cut across different African countries and create jobs.[7] Today, his investment firm, GPI, focuses on investments in high growth sectors in the African Market. Some of these sectors include healthcare, real estate, financial services, agribusiness and technology.[8] According to Sangu Delle, “the idea is promoting this intra-African trade, intra-African investments, and creating a pan-African platform”[9]. True to type, portfolio companies with GPI investment have operations spanning across different African countries. There are currently 12 portfolio companies with GPI investments which are generating jobs in Africa.
In 2010 Tony Elumelu founded Heirs Holdings and thereafter established its philanthropic arm, the Tony Elumelu foundation. In January 2015, the Tony Elumelu Entrepreneurship Programme (“TEEP”) was launched with a commitment to invest USD $100 Million in 10,000 African businesses in a decade. The objective was to invigorate the African private sector which he believed could be a primary generator of economic development. The long term objective is to create 1 million jobs across Africa and build wealth in Africa generated by Africans. Till date 3,000 African entrepreneurs within the ages of 21-37 are beneficiaries of TEEP.[10]
Beyond these Pan-African titans, a number of startups founded or co-founded by Africans are solving problems in the continent. Some of them include the likes of Flutterwave, Andela, mPharma. Flutterwave builds digital payment infrastructure which simplifies the processing of payments across Africa by banks and businesses. Till date, it has processed 10 million transactions worth $1.2 billion.[11] It currently has offices in Lagos, Nairobi, Accra, and Johannesburg. Andela on the other hand is focused on building technology leaders in Africa to overcome the shortage of tech-talent in Africa. mPharma builds the infrastructure that streamlines the supply chain of critical life-saving drugs by connecting pharmacies to hospitals. According to Gregory Rockson who is a Co-Founder of mPharma, the eventual goal is to become Africa’s largest dispenser of chronic drugs. This he says would be accomplished by “… offering the lowest drug prices and health benefit plans for patients across the continent.”[12]
A common theme running through these individuals re-writing the African narrative is the innovative approaches they have taken towards creating opportunities for others and solving problems. It is one thing to conceive an idea, but a lot goes into execution. According to Mo Abudu, bright ideas are great, but not even half of the work. In her words, “execution is everything”.[13] In a recent investment symposium organized by the Nigerian Lawyers Association in the US, the President of the Silicon Valley-Nigeria Economic Development Inc., Denise Williams advised on the need for investors to have a product which has been tested and is in motion, before seeking seed capital. Additionally, Babawole Akin-Aina, the Managing Partner of AO Advisors LLC emphasizes the need for ideas that solve problems. It is no wonder that majority of the promising start-ups in Africa are focused on the healthcare sector, IT, consumer goods, Fintech and Agriculture. This is because these are areas in need of critical infrastructure which when provided, can promote economic activities that contributes meaningfully to GDP.
A lot of the challenges the continent faces are actually disguised opportunities. Therefore investors should look beyond the challenges and focus more on partnerships with local stakeholders to mitigate risks. As for aspiring entrepreneurs, having a business idea is not enough. Execution is key. Together we can change the African narrative to one of a continent filled with prosperity.
This article was inspired by an investment symposium organized by the Nigerian Lawyers Association in partnership with the Consulate General of Nigeria, USA. The symposium, which held on September 14, 2017, focused on addressing strategies for investing and preserving capital in an economic slowdown.
[1] Elumelu, Tony O. (November 20, 2014), The rise of Africapitalism, The Economist
[2] Id.
[3] Id.
[4] CNN, Michelle Cohan and Nosmot Gbadamosi. Mo Abudu: The Nigerian media mogul with a global empire
[5] Mo Abudu: The Nigerian media mogul building a global empire
[6] Sangu Delle Session at 21st Century Fox Leadership
[7] Sangu Delle, In praise of macro-yes, macro finance in Africa
[8] Golden Palm Investments official website
[9] Watch interview with Ndani TV Available here
[10] The documentary on Tony Elumelu Entrepreneurs Transforming Africa
[11] See website
[12] Westminster College, Changing the World through Social Medicine: Gregory Rockson ’12
[13] Forbes, Africa’s Most Successful Women: Mo Abudu
Modupe O. OTOIDE is an International Tax Consultant and licensed attorney in the State of New York and Nigeria. She has a graduate degree in International Taxation from the New York University (NYU) School of Law. With her vast knowledge of regulatory and tax law, she has worked assiduously to structure commercial and corporate transactions to ensure profitability of business enterprises in various sectors of the Nigerian economy and the US. She currently works with a Fortune 500 company where she researches, develops, and executes international tax planning strategies for taxable and tax-free mergers and acquisitions, divestitures, corporate restructuring, and cross border financing.
She researches and writes on the global economy and how changing tax rules affect competitiveness and profitability of businesses.
In her spare time she loves travelling and exploring different cultures of the world.
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