How Tony Elumelu is changing the African narrative through entrepreneurship

April 28, 2019 at 10:00 am | Money Moves

Tom-Chris Emewulu

Tom-Chris Emewulu | Contributor

April 28, 2019 at 10:00 am | Money Moves

Tony Elumelu

A few weeks ago, the internet was on fire with the news of Jumia’s Initial Public Offering (IPO). At first blush, it looked like an African tech version of a Nollywood movie storyline — an African startup defies the odds in a sector bedeviled by a deficit of product-market-fit and consumer trust to reach a moonshot goal of IPO.

But for numerous African Diaspora and tech entrepreneurs reading and following the news of the “African Amazon’s” listing on NYSE, Jumia’s claim to African nationality is nothing short of barefaced modern-day colonialism and exploitation.

Why? Out of the eight major shareholders of the company, seven are not from the continent. “While the company runs the largest e-commerce business across Africa with operations in 14 countries including Nigeria, Kenya, Morocco, and Egypt, it is incorporated in Germany, has its headquarters in Dubai with its central tech team based in Portugal as its IPO filing shows.

For a lot of the proponents of the Jumia is not an African startup debate, the dialogue goes beyond identity. It’s a matter of precedence: “This colonial-type business model is not new. Jumia is the modern-day CFAO,” tweeted Rebecca Enonchong of AppsTech.

Many African Diasporas havewondered why no real African business has been able to build a system like Jumia.

The picture is very clear. For so long, Africa has been described as “land and resource abundant, but labor scarce.” This idea and context of a resource curse have obstructed the continent’s development dynamics and global competitiveness.

While the debate about Jumia’s nationality unfolds, I thought it’s important to shed more light on Tony Elumelu’s work in changing the narrative on the continent through the Tony Elumelu Foundation. As a disclaimer, I do not or intend to receive any financial reward for writing this article.

As someone who has benefitted from the Tony Elumelu Foundation entrepreneurship program, I am writing this article to attest to the transformative power of the program. And, I think it’s important that we uphold and celebrate heroes who are stepping across the line to solve real problems – such as Elumelu.

Now in its fifth year of a $100 million commitment, the Tony Elumelu Foundation Entrepreneurship program was initially designed to support 10,000 entrepreneurs from all 54 African countries over 10 years, with the aim of creating 1 million jobs.

This year, 2019, 3,050 were selected from 216,000 applications. That is with other organizations also funding places — the African Development Bank (which funded 1,000 places), the United Nations Development Programme (which funded 754), and the International Committee of the Red Cross funding 180 entrepreneurs.

In an event hosted by The Elumelu Foundation in Brussels last week, Mr. Elumelu announced an ambitious expansion plan of reaching 10,000 entrepreneurs in one year. “We want to make sure that we impact more, reach more, touch more lives and get more women involved…We would like to reach 10,000 a year, with support from partners to empower additional entrepreneurs. We want to eradicate poverty and create wealth in a sustainable way. Ultimately, \we want a larger and broader entrepreneurship ecosystem, that supports young Africans,” Elumelu told European Commission, Think Tanks in Brussels.

Enters the question, what makes the Tony Elumelu Foundation (TEF) different from other entrepreneurship programs on the continent?

The answer to that question lies in three basic frameworks of the TEF program:

  • Education
  • Mentor support and entrepreneurship community
  • Startup Funding

As part of my work in creating programs and tools to unlock the potentials of young people, I’ve studied and tested several startup support programs over the past few years. Many entrepreneurship programs I’ve come across often major on giving beneficiaries startup capital. In most instances, the recipients end up misusing the funds they got. In other cases, the monies are spent on minor expenses that do not add much value to the business.

Conversely, TEF enrolls its beneficiaries in a 12 weeks intensive online training as the starting point. They require participants to take weekly quizzes and surveys that gauge their comprehension of and involvement in the training. At the end of the 12 weeks of training, participants are required to use the learnings to craft their business plans for funding.

Even if you’ve been in business before joining the program, you will get fresh insights and strategies that’d improve your work afterward. Some of us actually call it an entrepreneurship MBA!

The second reason the Tony Elumelu Foundation program works better than many other entrepreneurship programs is because of the mentor support and entrepreneurship community. As part of the online training program, TEF matches participants with mentors in their sectors. TEF mentors help participants navigate the training, and support them with other business related needs. If a participant’s mentor becomes unresponsive, the admins connect the participant with another mentor or allow the participant to use his or her external contact(s).

Several books and articles have been written about the value of mentorship. In fact, experts say the smartest investment you can make in your career or business is having a mentor.

Entrepreneurship in Africa is a long and arduous journey – by estimate, 4 out of 5 startups fail within the first 12 months. A top tier mentorship program is, without doubt, a prerequisite for success on this plane. And, I should know because I have seen the remarkable progress reported by my Mastercard Foundation and SFAN mentees.

Regarding a community of like-minded individuals, the foundation recently launched the TEFConnect platform which gives fellows access to a pan-African network and market. By estimate, intra-African trade costs are around 50% higher than in East Asia and are the highest of intra-regional costs in any developing region. Not only is the TEFConnect platform helping to solve the need for trade and market information, but it also provides inclusion — without which business owners cannot capture economic opportunities on the continent.

Finally, the TEF Program is different from other entrepreneurship programs because of the power of small cheques. With an incredibly skewed ecosystem and the lack of local funding pipeline in many African countries, the hope for venture capital funding for African startups often lies outside the continent. Many TEF entrepreneurs are first-time founders and the seed fund from the foundation is their first funding. In an August 2018 article published by the World Bank, providing pre-seed and seed capital is said to be the essential step to bringing West Africa and Sahel’s entrepreneurs to the next level.

Source: World Bank Africa

Without question, if the burgeoning youth population in Africa do not have financial instruments to turn their ideas into innovation, in an environment of controlled risk, efforts in achieving Africa’s development agenda is like chasing our tails.

These small cheques issued by TEF has helped entrepreneurs like me chalk-in remarkable milestones in our businesses. TEF grant recipients have won competitions, been accepted into international fellowships and covered the metrics that attract venture capital funding.

These are merits for the type of future-focused interventions that can spur wealth creation and address unemployment on the continent. As I wrote elsewhere, the economic case for unlocking the potentials of young people through entrepreneurship is simple: It is one sure way to meet the sustainable development goal of eradicating poverty on the continent by 2030.

In other words, the biggest businesses on the continent in the coming decade will be created by young people. The impact of the Tony Elumelu Foundation is proof positive that if governments, institutions, and private sector organizations collaborate in “democratizing luck”, the social and economic dividends are tremendous!

Image credit: Tony Elumelu Foundation

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