The Tony Elumelu Foundation has announced the launch of a $100 million Pan-African entrepreneurship initiative.The first of its kind, the programme is set to empower the next generation of African entrepreneurs. The programme, championed by Nigerian industrialist and Africapitalism proponent, Tony Elumelu, is the largest single commitment made by an African towards developing budding entrepreneurs on the continent.
The core vision of the programme is to provide financial and structural support needed to make the leap from an entrepreneurial startup to an industrial powerhouse. This Elumelu believes is what Africa needs to propel its strive for sustainable development. It will identify and help grow an initial 10,000 start ups and young businesses from across Africa.
“The Tony Elumelu Foundation Entrepreneurship Programme will offer structured, multi-year opportunity to access funding, knowledge and perhaps most importantly mentoring, on a scale that is unprecedented in Africa”, said Mr Elumelu. “It is our opportunity to empower a generation”. This project has a target of creating 1 million new jobs and $10 billion in annual revenues over the next ten years. This makes a strong case for a sustainable solution to the unemployment challenge plaguing Africa.
Unemployment challenges
African countries face a daunting challenge of high urban youth unemployment. Results show that the level of youth unemployment across the continent is on the increase, slipping rapidly into crisis levels. The unemployment rate across sub-Saharan Africa’s top four markets – Nigeria, South Africa, Kenya and Ethiopia – averages 20 percent, well above the global average rate of 12 percent. However entrepreneurial projects like this are expected to give young innovators the opportunity to attain their full potentials with the required funding and guidance. A selection Committee of African business leaders will select the most promising 1,000 start-ups annually from across the continent.
Speaking in an interview with THISDAY, Elumelu stressed the need to float more initiatives aimed at tackling unemployment in the continent. “I am a bit concerned about the challenges that stare us in the face and we must do something now or it will be very challenging. The major thing is unemployment. It is a major challenge in Africa,” he said.
SME Dominance
Mr Elumelu described small and medium scale enterprises (SMEs) as the engine of growth in any economy because of their ability to create employment. “Entrepreneurship is the cornerstone to African development and the key to local value creation in Africa” Elumelu stated.
Africa’s small enterprises, from trading to farming, contribute more than 80 percent of output and jobs in most African nations. They also offer the best opportunities for growth, diversification and job creation. But SMEs are constrained by limited access to stable energy services, business management, skilled labour and especially access to sufficient finance.
In response to some of these challenges, the African Guarantee Fund for Small and Medium-sized Enterprises (AGF) was created by the African Development Bank (AFDB). Since its official launch in 2012, AGF has provided over $300 million in financial support to more than 300 SMEs across Africa.
Improved funding and mentorship
With mentorship from the likes of Tony Elumelu and Ashish Thakkar’s Mara Mentor, a greater percentage of the African youth population and budding entrepreneurs now have access multi-year training programmes, funding, and mentoring. This creates an environment where African entrepreneurs can get critical elements of support in the early stages of their business lives.
Last month the Central Bank of Nigeria (CBN) granted $10.9 million for SME development in Delta state, one of Nigeria’s most prolific oil producing areas. During the event that commemorated the grant award, the CBN governor, Mr Godwin Emefieli, said the fund was meant to help entrepreneurs with brilliant business ideas but lacking the necessary funds to succeed.
SMEs have suffered major setbacks due to lack of funding and mentorship.
An Entrepreneurial Solution
Entrepreneurs, mostly at the start-up level, are increasingly holding an influential position in business participation and economic contribution not just in Africa, but globally. They constitutes about 30 percent of the global GDP and employment generation capacity of about 58 percent of the global working population.
SME’s in Nigeria, Africa’s leading economy, have manifested in the following areas; employment generation, rural development, economic growth and industrialisation, utilisation of indigenous resources. Similarly, many emerging economies have come to realise the value of small businesses which are characterised by dynamism, witty innovations, efficiency, and their small size allows for faster decision making process.
With the gradual rise of entrepreneurship in Africa, there is currently a shift in the approach to dealing with unemployment. So far The Tony Elumelu Foundation is enabling these entrepreneurs achieve success and significance. Many more of such initiatives are fast emerging, but the question remains; Are these entrepreneurs ready for the next step?
