Nigerian business moguls offer help to fledgling entrepreneurs – FT

November 26, 2015
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By Andrew Jack

As Hauwa Katena, from Nigeria’s north western city of Kaduna, began researching how to overcome barriers to the expansion of her designer African women’s clothing business at the start of this year, she turned like so many others to the web.

She came across the Tony Elumelu Foundation Entrepreneurship Programme, and by April had been selected to participate. She joined hundreds of others across Africa for a two week “boot camp” in Ogun state, followed by three months of training, support from mentors and seed capital.

“Before, my business was a hobby,” she says. “I learnt the importance of being driven, committed and able to do something different. It was a great way to meet other fashion designers, develop a business plan and set milestones for the next 12 months. Now I have expanded production, hired new staff, sewing machines and fabrics and I am receiving orders from all over Nigeria. The next stop is to launch my own website.”

She is a beneficiary of a fledgling but growing trend: business people who have amassed substantial wealth in Nigeria, and who are now starting to give something back. They are doing so in distinctive ways, while stoking a debate about how best to practice philanthropy with a national twist.

Mfonobong Nsehe, a Nigerian journalist who launched Forbes’ annual list of Africa’s richest people, has identified a number in his country who are active — from Mr Elumelu and Aliko Dangote, the continent’s richest man, to Emeka Offor, Theophilus Danjuma, Femi Otedola and Folorunsho Alakija.

Some seem genuinely interested in giving back, he says, such as the oil magnate Femi Otedola, who funds annual scholarships for bright university students from his native Epe in Lagos state. For some, donations can attenuate criticism over how they made their money. “It’s good for business. Throwing a few millions at some causes and making a public show of it is a sure-fire way to win back affections. Many decide to be philanthropists because it’s the politically correct thing to do,” says Mr Nsehe.

He points to trends and labels seized upon by their peers elsewhere around the world, from partnerships and “impact investing” to venture philanthropy. “Most Nigerian philanthropists channel their resources towards causes in education and health, as well as soft loans and grants to small-scale entrepreneurs.”

The best known and most prominent is Mr Dangote, whose cement-led business has expanded across the continent and beyond. He says he began making donations 20 years ago, with annual grants totalling more than $75m in recent years before he allocated $1.25bn for an endowment to his Dangote Foundation in 2014. Much of his focus has been on health, education and economic empowerment, triggered by his desire to tackle the poverty in his native Kano state.

“We have an enormous under-nutrition problem in Nigeria, which is a fundamental development issue,” says Mr Dangote. “There is no possibility of good health without the problem of hunger and under-nutrition being solved. Half of the children who die of malaria, diarrhoea and pneumonia have that as the underlying cause of death. If they are undernourished, their brains become stunted and their ability to learn and be successful in school is compromised.”<

He has worked with external funders, including the Bill & Melinda Gates Foundation, helping a campaign to eliminate polio. Yet he also believes that while “the western world and development agencies have the right intentions . . . true development can never fully come from the outside. There are no examples of countries that have actually developed through foreign aid.”

The focus on fostering local economic growth is a common theme. “I felt the best form of philanthropy is one that creates self reliance and not dependency,” says Mr Elumelu, who earmarked $100m from profits of his banking business for his own foundation to support 10,000 entrepreneurs over a decade.

He has teamed up with Tony Blair’s Africa Governance Initiative to create fellowships supporting leaders, partly to find ways to boost competitiveness. “I believe the development of Africa lies essentially in the private sector,” Mr Elumelu says. “Looking around me, across Africa, we have a youthful population with very bright ideas who lack economic opportunities.”

Jamie Drummond, head of One, the anti-poverty campaigning group, says Nigeria should do more to lead efforts in Africa to encourage improved public policy. “It’s our hope that African philanthropists will invest more and more into think tanks, and non partisan pressure groups that focus on effective service delivery, open government, regional co-operation, job creation.”

More broadly, Mr Dangote says: “I think that wealthy Africans are already doing a lot — this is not always recognised because their investments in charity and philanthropy are not always properly advertised, communicated and shared. There is always scope to do more, and in collaboration with others.”

This article first appeared here.