Tony Elumelu, The Chairman of Heirs Holding and Founder of the Tony Elumelu Foundation speaks at Chatham House, London. (Courtesy Photo)
The portrayal of Africa in the media has for centuries been in a negative light. This negative and pervasive narrative of the continent has led to several critical setbacks on the amount of investment into the continent. As such, a perpetual cycle of low investor satisfaction has resulted from these stereotypes of Africa.
A “reset of mindset” toward the stories that are told about Africa has the potential to reduce the amount of mindless, biased and uninformed sanctions that are placed on African states. Resultantly, more positive investment decisions will be made to attract global capital to drive job creation and reduce poverty.
Tony Elumelu, the Chairman of Heirs Holdings and Founder of the Tony Elumelu Foundation, spoke at Chatham House, London on September 11, 2017 and challenged the general stereotypical perception that investors have towards Africa. He condemned the pervasive stereotypes in the media around Africa and said the resulting negative narrative was “Africa’s greatest challenge.”
“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 contextualized, and has led to the kind of narrative that we have had for so long on Africa,” said Elumelu.
"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." ~ Tony Elumelu.
“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,” said Elumelu.
He spoke on a panel at a gathering of senior policymakers and development experts hosted by UK’s leading foreign policy institute. This was alongside United Kingdom Minister of State, Department for International Development (DFID), Rory Stewart, OBE.
Elumelu called for an urgent “reset of mindset” to attract the level of global private capital that will 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,” said the Chairman of Heirs Holdings, a pan-African investment firm with interests in financial services, power and oil & gas.
As the Founder of the Tony Elumelu Foundation, that has committed $100m to African entrepreneurs, he emphasized the critical importance of mentoring and funding for the survival of small businesses. He rallied Public and Private Sector stakeholders and the development world to increase support to African SMEs, describing them as “the lifeblood of our economy”.
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 because, “when there is prosperity, security is not an issue, but when there are fewer jobs, insecurity heightens.”
In Africa, only 700 companies generate over $500m in annual revenue, half the number in other regions. This for Elumelu is reason enough to direct targeted support to grow these small businesses into scalable companies capable of becoming big corporates in the future.
“Long term private investment in electricity infrastructure will create an enabling environment for business growth." ~ Tony Elumelu.
A case in point is another energy conglomerate of Elumelu, Transcorp Power Plc that has invested $2.5b in President Obama’s Power Africa Initiative. It is currently the largest thermal generator of electricity in Nigeria. Access to electricity is a key ingredient for businesses to thrive in Africa-- an investment area that both local and foreign investors can tap into and, “encourage the creation and growth of businesses of scale in Africa.”
“Long term private investment in electricity infrastructure will create an enabling environment for business growth,” he said.
In addition, a new Chatham House report, “Developing Businesses of Scale in Sub-Saharan Africa” was launched at the event. It referenced Elumelu’s economic philosophy of ‘Africapitalism’, a concept that 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 in order to enhance job creation, encourage innovation and drive industrialization.
Therefore, for Tony Elumelu, the urgency to change the negative narrative of Africa in the media is the biggest challenge that Africans must deal with in order to improve the state of investment inflow into the continent.
The perpetual biased, pervasive and negative stories of the continent downplays the investment potential in Africa. There is an urgent need for Africans to write their own stories and in their own context. This is what will challenge the negative narrative that has plagued the continent for centuries and consequently increase economic development.