As African economies continue to grow at breakneck speed, business leaders like Nigeria's Tony Elumelu don't dwell too much on the concept of "African solutions to African problems," at least not in the traditional sense. Rather, he encourages the private sector to look at Africa as an investment opportunity. Elumelu's even coined a new term that is quietly gaining traction: Africapitalism.
Like fellow philanthropist Mo Ibrahim, whose Ibrahim Prize focuses on fostering better leadership across Africa, Elumelu is backing his words with action -- and money. His Pan-African investment firm Heirs Holdings recently pledged $2.5 billion to President Obama's "Power Africa" initiative, which aims to give citizens and businesses in Ghana, Tanzania, Kenya, Liberia, Nigeria and Ethiopia better access to electricity. And The Tony Elumelu Foundation fosters entrepreneurship and competition within the African private sector through philanthropic endeavors, including a fellowship with the Tony Blair Africa Governance Initiative.
I spoke with Elumelu during a recent trip to New York City about the current state of African economies, the strategic investments needed to sustain recent growth and the development challenges facing the continent today.
You've coined a term that's now gone viral known as Africapitalism. What is it?
Africapitalism is a call on the private sector to help in the development of Africa by investing long-term in key sectors of the African economy that have maximum impact, sectors like electricity, infrastructure, transportation, agriculture and financial services. The intent is that through long-term investing, we will end up creating economic wealth, economic prosperity and social wealth by addressing most of society's challenges.
African economies have been growing at a steady clip in recent years. Is it sustainable?
Africa cannot sustain its current growth if we do not invest massively in infrastructure, so we need power to unleash the economic potential of Africa. We need transportation to increase competition in Africa. Current economic growth is good but we need to get the private sector more involved. We need to get developers involved so they can invest and channel money into Africa. The challenge for us is create economic prosperity across the entire continent.
Some people have been critical of the Obama administration and the American private sector for not paying enough attention to African economic growth. Is that a fair assessment?
No. I don't think that investments are something that you legislate. I think that if the environment is right, people will go. I don't blame any non-African who was not excited about investing in Africa in the past, but now things have changed. The African business opportunity environment has improved significantly. Ways of doing business are improving and African leaders have realized there is a positive correlation between creating the right business environment, and progress and development. So it's not a question of whether the Americans or the Chinese are coming or not, rather it is how well prepared we are to attract this kind of investment.
You call the lack of access to energy and electricity shortages the biggest challenge to African economic growth.
Children who come home from school need electricity to do their homework. That does not happen now because less than 10 percent of Africans have access to electricity. We need hospitals to have the ability to operate for 24 hours, and this cannot happen if we do not have electricity. There are no alternatives to electricity, so fixing power in Africa is a tremendous tool for change across the board, from security to economic development and economic progress across the entire continent. The lack of electricity affects more than 80 percent of the population.
Your company, Heirs Holdings, has put up $2.5 billion to help fund President Obama's "Power Africa" initiative. How will that money be spent?
President Obama's recent visit to Africa centered on two things, one trade and the other, power. Power because he realizes the power of electricity to help spur the African economy. That's why in Africa we call Obama a true Africapitalist.
In order to demonstrate the 'power of power' to fire the African economy we decided to commit $2.5 billion to the Power Africa initiative.
The challenge is to make basic human needed utilities available to the public. Power Africa will create jobs and employment, help more young people go to school, and more. Electrifying Africa will help to do all of the things we need to further develop Africa.
Robert Nolan is an editor at the Foreign Policy Association and producer of the Great Decisions in Foreign Policy series on PBS. You can follow him on Twitter @robert_nolan.