Chairman of Heirs Holdings and founder of the Tony
Elumelu Foundation, Mr. Tony Elumelu, has launched a
$100 million program to support and promote
entrepreneurship across Africa.
Elumelu first hinted of the programme in August at
the 2014 US-Africa Leaders Summit held in
Washington. He said that the initiative, which he
described as “a $100 million endowment to
encourage the maturation of African
entrepreneurs”, is intended to help up to 10,000
budding African entrepreneurs to develop their
ideas into sustainable businesses.
“We will be providing $100m to 10,000
entrepreneurs across Africa through the soon-to-
be-launched Tony Elumelu Entrepreneurship
Programme. By democratising access to
opportunity, with an emphasis on tapping into the
talent of Africa’s young people, this programme
strives to “institutionalise luck”, which is a key
factor in the success of any entrepreneur,” he
stated.
Seed capital and mentoring
Specifically, the programme is to provide 1,000
entrepreneurs a year for the next 10 years with
seed capital of $5,000 and additional returnable
capital of up to $5,000. According to Elumelu, by
making half of the money returnable, programme
participants are encouraged to develop a sense of
responsibility. “I want to make sure there is some
spirit of accountability,” he added.
The application process will begin in January 2015
with the announcement of the first 1,000
participants expected by the end of March. In
order to be eligible for the initial $5,000 seed
capital, successful applicants will have to go
through a 12-week online mentoring and training
program.
Parminder Vir, Director of the entrepreneurship
program, explained: “The business skills training
program will give them tools they need to go out
and physically implement the lessons they learn.”
The online program will draw on content specifically
designed to address the challenges African
businesses will face.
“During that stage they will have mentors to help
them, as well as access to a curated online library
to enable them to find information that is relevant
to their business,” Vir added. At the end of the 12
weeks, the 1,000 start-ups will attend a three-day
forum in Nigeria. “That event will sow the seed for
intra-Africa trade, for pan-Africa trade,” she
said.
Africa’s economic integration
Elumelu, promoting the long-term growth of intra-
African trade is one of the key goals of the
project. “Intra-African trade is quite low, partly
because Africa was wired from colonial times to
facilitate trade only with the rest of the world,
and partly because of the nature of what we’re
trading. We have raw materials but we don’t have
the processing capacity to transform them into
products that will be useful in Africa.
We hope that the successful entrepreneurs in this
program will show interest in industrialisation of
the continent.
That will help us produce more finished goods, which
will encourage trade and also put pressure on
political leaders to create economic zones, or to
enable the movement of goods, people and
payments that will facilitate intra-African trade,”
he stated.
Elumelu acknowledged that the program is ambitious,
both in its scale and complexity, and that it is
unlikely all the entrepreneurs who join will emerge
with successful businesses. “If we achieve 30
percent to 50 percent success rate we would have
helped significantly in helping the development of
the continent,” he added.
Job creation
Wiebe Boer, CEO of Tony Elumelu Foundation, said
the businesses supported by the program are
expected to create at least one million new jobs
and generate $10 billion of new revenues.
Beyond the promise of receiving financing,
mentoring and support, entrepreneurs have an
additional incentive to apply – the chance of having
their business noticed by Heirs Holding as a
potential investment opportunity.
According to Elumelu: “Heirs Holdings is a pan-
African private investment company. If we see
very promising companies that need support, we
can do that – through impact investing, through
pure commercial investment, through financial
support, or even through wider capital raising.”
Elumelu believes that the initiative will enable
African entrepreneurs transform the continent.
“In 2015 the African entrepreneur will emerge on
to the global stage, as a new generation shows the
world what those of us doing business in Africa
have long known: that our continent is home to
some of the most exciting and innovative
entrepreneurial talent.
From advanced mobile-payment systems to new
agricultural-insurance models, we are already
seeing how entrepreneurship is transforming
Africa. But in Africa, business growth alone is not
the full story. It is perhaps not even the most
important part. Entrepreneurship matters especially
for its potential to transform society.
“For centuries, the continent was impoverished by
the extraction of raw materials by colonial powers.
Africa was unable to generate or sustain its own
wealth, as it was forced to buy finished goods
created with African resources at premium prices.
And it lacked basic infrastructure except for the
roads and ports built to move exports. If Africa is
to transcend that chapter of its history and
realise its economic potential, it must first become
self-sufficient – and the private sector is vital to
this process.
“Imagine the same continent filled with businesses
that can process crude oil into petroleum, cocoa
pods into chocolate and cotton lint into fabric, all
while retaining the finished-goods premium instead
of sending wealth overseas.
As homegrown businesses meet social and economic
needs by creating goods and services with an
innate understanding of the local environment,
they can bring private capital to vital
infrastructure like road transport and power
generation. And they can create jobs for
Africans, which will in turn create an African middle
class – a new generation of African consumers,”
he stated.
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