Tony Elumelu, the chairman of Transcorp, one of the biggest publicly traded conglomerates in Nigeria, says Africapitalism works by not just theorising, but by practising what it preaches. Elumelu also provided details of how his economic philosophy, Africapitalism, will promote inclusive prosperity throughout the continent.
Africa is the world’s second-largest and second-most-populous continent, after Asia in both aspects. At about 30.3 million km2 (11.7 million square miles), including adjacent islands, it covers 20% of Earth’s land area and 6% of its total surface area.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit.
Africapitalism argues that the continent’s social and economic advancement is mostly driven by the private sector, particularly by entrepreneurs.
On Tuesday, October 24, 2023, at the 7th Future Investment Initiative: The New Compass in Riyadh, Saudi Arabia, as a guest of Richard Attias, Chairman of the FII Institute, and Yasir bin Othman Al-Rumayyan, Tony Elumelu, the chairman of Transcorp and a prominent investor, gave insightful details of what Africapitalism means.
What is Africapitalism
According to Elumelu, the core tenet of Africapitalism is the encouragement of long-term private sector investments in vital African economic sectors that can advance the continent’s economic empowerment and prosperity.
“Africapitalism is a call on the private sector to invest long-term in critical sectors of the African economy that have the potential for transforming and catalysing economic empowerment and prosperity. So that at the end of the day, we all go far and go together and no one is left behind. And embedded in it is the philosophy of inclusive growth, the philosophy of empowering young men as well as our women, who have for a long time been left behind,” Elumelu explained in a chat with Richard Attias on ‘How Africapitalism Drives Inclusive Growth’.
He further provided a very clear example “I think one of the reasons that Africapitalism has been accepted and is being practised by a lot of people is that we don’t just preach; we don’t just theorise; we practise. In our group, we have Transcorp (Power), which is the largest electricity-generating company in Nigeria today. Transcorp (Power) has a combined energy-generating capacity of 2,000 megawatts. So, for the ordinary eye, that is an economic investment that yields profit for the investors.
“Fine, I will support that, but more importantly, we all know that access to electricity is the single most critical factor that we need to fix if we must develop Africa. For our young ones to go to school, they must have access to electricity; for our hospitals to function very well, they must have access to electricity; and for businesses to grow and develop, they must have access to electricity. So that is Africapitalism in action, where, while investing, you make a profit at the same time. Simultaneously, without waiting for others, you also invest in critical sectors—not just trading—critical sectors that help to move the needles.
“We need massive investment in electricity on the continent. So, an investment in electricity is not just for profitability; it is for profitability because we need sustainability, but more importantly, it helps to fix the challenges that we have, the challenges that hold us from taking off as a continent. That is the philosophy of Africapitalism.”
Moving forward, Elumelu recommended creating mechanisms to promote intra-African trade by eliminating all outward and intrinsic obstacles.
He emphasised that all hands must be on deck to develop the continent: “We need to empower the young generation of Africans to be able to create, because if you trade and you don’t produce what your neighbour needs, your neighbour would go outside to look for who can produce it. So, we need to make sure that in Africa, we can produce what we need, and again, that speaks to the philosophy of Africapitalism: we must realise that no one owes us our development. We as Africans must work hard to develop our continent.”
He further noted that some of the continent’s enormous potentials, such as its large youth population and availability of natural resources, were explained as “We need a marshal plan for Africa. We need to mobilise long-term capital on the continent to enable us to leapfrog and fix the infrastructure that we need to develop. Japan, Germany, Korea, and even China have benefited from massive global capital infusions; Africa needs this. I use this opportunity to draw the attention of the world to the opportunities on the continent, the need to invest in Africa, the need to collaborate with African business leaders, and, more importantly, those like the Tony Elumelu Foundation, which likes to support young African entrepreneurs. Let’s see how we can work together to create a better future for everyone.”