The founder of Tony Elumelu Foundation (TEF), Mr. Tony Elumelu, spoke with journalists at the recently concluded IMF/World Bank Spring meetings in Washington DC, emphasising that what many young and intelligent entrepreneurs in Africa require to compete with their peers in other climes include functional infrastructure and favourable regulatory environment. Excerpts:
For someone that wants to be an entrepreneur, what should such a person study in the university?
Let’s look at what we do at TEF. Every year we try to support 1,000 African entrepreneurs, we say to them that the programme is sector agnostic and it is not important whether you are educated or not.
We want you to follow your passion, because ideas that come from your passion to a large extent succeed. And we have seen medical doctors express interest in fashion; we have seen computer scientists express interest in ICT.
What we are seeing to some extent addresses the new way forward. It is more of skill development and what you instinctively can wake up at night and want to do and what you do without feeling that you are inconveniencing yourself or being stressed.
Any and every area can lead to success. So, my advice to people and even my children is to follow your passion. If you are already in the university, finish whatever you are studying, but after that, follow your passion because passion is important.
People who have made great strides in life are people who followed their passion and anything you do, do it very well. Oprah Winfrey became a billionaire just by talking, organising people and having fun so to me, it doesn’t matter what you do because passion makes you keep improving at anything you do.
Tell us more about the TEF Entrepreneurship Programme.
What we are doing is private sector driven and our own contribution to the development of our country. Since we started, TEF has supported young Nigerians. Every year, we have 50 percent of the 1000 we select from Nigeria.
Not by design, but somehow due to the energy and entrepreneurial spirit of our people. This is the fourth year; this means that we have 2000 TEF entrepreneurs across Nigeria in every state. I am happy that Nigeria is well represented in the programme and that they are doing well.
It’s only a matter of time before we begin to feel the impact of what they are doing. The International Red Cross has come in, they have now committed to support 200 people, 100 from the Niger Delta and another 100 from the North Eastern part of Nigeria so that increases the participation of Nigeria from 500 to 700. The UNDP has also committed to support another 40. Collectively, we are making progress. This is how the private sector and development partners can play their own role.
You were with the IFC, de-risking the environment to encourage inflow of funds. The major challenge is de-risking SMEs and getting banks to release funds for seed capital, what is happening to banks?
First, I was a bank CEO and today, I am an investor in a bank and I continue to have interest in that sector. Two is, I don’t speak for the banking sector; but it is so easy to blame banks about lending to SMEs but if banks go under, the same public will say the banks were reckless, that’s the dilemma. Nobody will say this bank went under because it tried to support SMEs.
SME is a difficult sector to fund but those who have managed to develop the skills to support that segment are doing so. I speak from personal conviction that we need to support the SMEs and that is why TEF has put aside $100 million to support entrepreneurs.
And I just spoke about the fact that 2000 of them are from Nigeria and if I didn’t say it today, you wouldn’t have known that I was with the IFC and not just the IFC but also the CEO of IDA talking about how to support entrepreneurs in Nigeria and other African countries. We spent hours theorizing about risk mitigation, risk guarantee so they can come into the sector. I do hope that all these efforts will yield the desired results to make sure that money gets to SMEs.
The government has a role to support this initiative with incentives and policies that will make SMEs grow because if SMEs grow, they will attract more capital funding but if SMEs die, nobody will want to invest in SMEs. One thing about SMEs is that they don’t have enough collateral to provide banks and if they go under, what will banks hold on to? We need to see more successful SMEs. All of us need to work together to make them succeed.
What can Africa do to move from digital consumption?
We have young Africans who are intelligent who can do great things but if they don’t have internet connectivity, there is a problem for them. If they don’t have access to electricity, they cannot make it; so if we can create the right environment for them, then they will come with ideas that will reverse the trend of things happening in Africa.
There is no two ways to that. We need to create the right environment. Unnecessary taxation, tough operating environment kill these companies, we need to encourage this sector, they are the ones that create employment not the big companies. Imagine you were in an environment where you don’t have to worry about electricity, water then you can do things.
Why is it hard for African countries to invest in human capital development?
I think it’s about alignment of interest, I think it’s about understanding. We need leaders who are focused on results who want to make a difference, who understand how the system works. Some people will look at it from a different perspective but for me, internet connectivity is a major issue also, electricity; you can’t fix connectivity without electricity. Leaders who understand these things can connect the dots and then know what to tackle and do it in a transparent fashion.
You said Africa should stop going cap in hand that Africa must develop Africa, how is that playing out?
In my closing remarks, I said African private sector leaders should invest in Africa, mobilize resources that we have a lot of resources. I also called on development partners, I said please don’t relent, keep engaging in areas of advocacy and channel more resources to Africa. It is more about Africa, we should play a role in Africa, we won’t say no to people that want to help us. Just sitting down with mentality that you owe it to us to help us should go. The countries that are helping us did not have the kind of resources we have when they started. That mentality is one of the reasons we are where we are.