By Adeola Akinremi in New York, USA
Lack of good policies is stunting Africa’s entrepreneurial growth, frustrating development and threatening the continent’s progress, a philanthropist and Chairman of the United Bank for Africa (UBA), Mr. Tony Elumelu, said at the weekend at the Harvard University, United States.
“The government must provide the enabling environment and create policies that support sustainable development. The entrepreneurs are there, but they face enormous challenges that government needs to address with favourable policies for business growth,” Elumelu said.
He spoke to an audience populated by development experts and students from across the US and from Africa at the 22nd annual International Development Conference (IDC) at Cambridge, Massachusetts, alongside the former President, Africa Development Bank, Ronald Kaberuka.
The conference themed: “Pathway to progress: exploring successes and opportunities,’ provided platform for the two economists to discuss economic stimulation from the public and private sector perspectives.
In Africa, unchecked bureaucracy, insecurity, lack of access to finance and expansion of government policies that hinder economic growth and economic opportunity are barriers to progress in new business formation.
“A good policy is like a triangle. It must be technically sound. Development is about the choice a country makes. Development is not lack of knowledge. It is not something that can be imported. It has to be homegrown. It is an internal process,” said Kaberuka, a former Finance Minister from Rwanda.
The difference between a country making progress and others at the bottom according to Kaberuka is about choices they make in development. “Those choices are possible,” he said.
Kaberuka cited the successes of India in green revolution, the deregulation of the telecommunication sector in most parts of African countries and how they triggered economic progress.
“You have the business, you have the government, business invests, provides solution, government provides support, regulates and you have progress. So it can’t be lack of knowledge. It must be lack of something else, when a country is not moving forward. In the 1990s, when we asked the government to deregulate the telecoms sector, there was explosion and with the explosion, businesses have improved. We have tried to replicate this in the energy sector. It worked in some countries, but failed in others. It can’t be lack of knowledge and it can’t be lack of money,” he added.
Both Elumelu and Kaberuka asked for realignment of interest for progress in Africa, making case for collaboration among stakeholders.
“Policy, knowledge and resource combination are the pathway to progress. The three are critical to development,” Elumelu explained.
The model of Africapitalism pioneered by Elumelu for Africa’s development piqued the interest of participants at the conference who asked varied questions on how innovative ideas can trigger development.
Over the course of the discussion, the billionaire banker shared ideas on the promotion of entrepreneurship development and his economic philosophy of Africapitalism which encourages long term private sector investments in strategic sectors of the economy that create economic prosperity and social wealth.
The Tony Elumelu Foundation Entrepreneurship Programme (TEEP), a 10-year, $100m commitment to help identify and empower 10,000 African entrepreneurs with the aim of creating one million jobs and adding $10 billion to African economies, is one of the ways Elumelu is working to turn African continent to a truly prosperous economy that will change the statistics.
Later, at the Columbia University, New York, Elumelu shared the story of how he moved his bank from one branch on a corner street to having branches in several countries in Africa, France, the US and the United Kingdom.
“While Entrepreneurship is key to development, Africapitalism an economic philosophy that encourages long term investment in key sectors that create economic prosperity and social wealth is also critical to sustainable development.
“In 1997 some of us came together and acquired a distressed financial institution and turned it around. We set out with three strategic intents. The first was to turn the bank around. The second was to become a leader in the continent and the third was to expand globally.
“Today we have achieved all. UBA is operating in 19 countries in Africa and we are in three global centres: London, Paris and here in New York. In fact, we are the only African bank regulated by the OCC. What started as a not so huge investment in 1997 has grown exponentially, creating wealth for us and other stakeholders.
“The lesson here is that there was an overriding drive and the need to invest long term in a key sector-financial services- and helped to democratise banking by creating access to financial services for all.
‘No one but us would develop Africa’. It is this belief that is driving a lot of the things that we do. We have to move away from the concentration of resources in the extraction. Value creation has been lacking in the exploitation of our resources. Consequently GDP growth figures for African countries are not really felt by our people.
“Africapitalism and entrepreneurship including the entire ecosystem of it in my view will lead to development in Africa,” he said.