Founder’s Session at the TICAD 7 Plenary 3 Public-Private Business Dialogue

Founder’s Remarks:
Founder’s Session at the TICAD 7 Plenary 3 Public-Private Business Dialogue

(August 29, 2019)

• Good morning all;
• Our Host, H.E., the Prime Minister of Japan, Mr. Shinzo Abe
• African Heads of States and leaders of the Africa Union;
• Mr. Abdel-Fattah El-Sisi, Chair of AU, President of Arab Republic of Egypt;
• Mr. Muhammadu Buhari, President of Nigeria;
• Mr Cyril Ramaphosa, President of South Africa;
• Dr. Hage G. Geingab, President of Namibia;
• Mr. Issoufou Mahamadou, President of Niger;
• African and Japanese Business Leaders in attendance
• My name is Tony Elumelu, and I stand here before you today wearing two hats: first as the Chairman of the United Bank for Africa, Africa’s global bank with presence in 20 African countries as well as in the United Kingdom, France, and the United States of America where we are the only African bank with deposit-taking capacity.
• I am also the Founder of the Tony Elumelu Foundation, the African philanthropy empowering young African entrepreneurs from across all 54 African countries.
• First, I would like to start by commending the Japanese government under the leadership of H.E. Prime Minister Abe, for creating this platform to foster high-level policy and business interactions, as well as the collaborations necessary for the socio-economic development of the African continent.
• As I have always said, we must attack poverty wherever it is present because poverty anywhere is a threat to all of us everywhere. Prosperity brings a reduction in instability, illegal migration and extremism.
• The conversations, dialogues and partnerships that will occur over the course of the next two days will be fundamental in advancing the economic ties between Africa and Japan, facilitating trade and commerce, strengthening business relationship and investment ties, which will support the sustainable development of Africa while reinforcing Japan’s global competitiveness and positioning.
• Africa is one of the world’s viable destinations for investment.
• Our huge population of nearly 1.5bn people forms one of the most attractive markets anywhere in the world.
• The world is paying close attention to Africa, but is Japan at the center of this conversation or is it on the sidelines?
• Japan can and should play a lead role in the business and investment activity that is flooding into Africa. Indeed, there is huge opportunity for discerning investors.
• The global news cycle monitors and reports consistently of China’s aggressive foray into Africa, which all of us here in this room are keenly aware of.
• The Japanese government has shown great foresight in conceptualising, developing and expanding TICAD to what it is today, but it should go beyond that.
• Japan’s relationship with Africa must go deeper: The benefits will be immense for those who recognise and appreciate the opportunities Africa offers, and actively leverage these possibilities present across the continent – each of the 54 African countries with its own unique set of competitive advantages.
• The average income per capita in Africa is rising; the household income is increasing, disposable income is growing. Purchasing power is stronger than it has ever been and the projections remain extremely positive.
• I speak as a representative of the African private sector, but also with active investments in other parts of the world.
• Nowhere else in the world offers you the returns on investment that you would enjoy in Africa.
• Many of Africa’s stock markets are delivering stellar returns, while institutional, retail mutual fund and private equity capital is flowing rapidly into African markets.
• Many multinationals and global conglomerates are investing heavily in Africa.
• I encourage you not to see the glass as half empty, but to see the opportunities Africa offers beyond the prevalent stereotypes.
• The new Japan-Africa partnership should prioritize three “pillars” of development, which all work together to form a virtuous cycle of prosperity:

1. investment in infrastructure,
2. a commitment to partnering with the African private sector for the development of Africa’s manufacturing and processing industries to achieve increased local value creation;
3. investing in African youth to create employment and economic opportunity

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AFRICAPITALISM

• This virtuous cycle forms the heart of Africapitalism: Africa and Japan coming together, united in a common objective of creating wealth and jobs.
• Infrastructure investment, particularly in electricity and transportation, without which business cannot function, is of utmost priority because of its twin outcome of transformative impact as well as a stellar return on investment.
• Today, more than 70 percent of sub-Saharan Africa lacks access to electricity. This is a glass that can be seen as either half full or half empty.
• The vast number of potential consumers that are yet to be reached and connected to the grid, offers incredible opportunity for investing in the power sector for discerning investors.
• The social benefits are also immense: 1 percent increase in electricity outages reduces Africa’s per-capita GDP by approximately 3 percent. Access to affordable electricity is essential to unlocking the continent’s growth potential — reducing costs and enabling business growth, including homegrown businesses that create jobs and sustainable local economies.
• Investment in transportation infrastructure also promises to have an equally transformative impact for investors.
• Consider that today in Africa’s largest economy, Nigeria, despite President Buhari’s and the Central Bank Governor’s genuine commitment to agriculture development, 65 percent of agricultural produce spoils for lack of storage infrastructure and adequate transport connections.
• This is an opportunity for investment in the transport space to connect the continent and enable more exports to other African markets via roads, railways, waterways and airways.
• Major multinationals are ramping up African operations in spite of “infrastructure challenges” because they know and understand that the benefits far outweigh the negatives.
• For the second pillar, investing in and building the manufacturing and processing industries in Africa, offers an attractive opportunity to access, process and refine Africa’s natural resources on the continent.
• Africa needs more local value creation.
• The continent has abundance of natural resources ready to be transformed into higher end products on the value chain.
• To give a few examples: Africa is home 12% of the world’s oil reserves, 40% of its gold, and 80% of its chromium and 90% of its platinum respectively.
• Africa is also home to 60% of the world’s underutilized arable land and has vast timber resources.
• The realisation that these abundant natural resources can be the driver for an industrial revolution across the continent is growing.
• See this therefore as an opportunity to practice what we preach with Africapitalism, of partnering with Africans to invest in key sectors beneficial to the continent, but also profitable for your business.
• It will be a highly profitable venture for businesses who enter these sectors to create local value in Africa, instead of shipping raw materials such as oil, cocoa and gold overseas, where they are processed into high-margin products and often re-imported into Africa.
• On the third pillar of investing in African youth to create employment and economic opportunity, it is very well know that Africa is a continent of people that are extremely entrepreneurial in nature.
• We have a young and growing population with many brilliant ideas for innovation and growth that can reduce unemployment across the continent.
• Investing in these small businesses is akin to investing in silicon valley startups; they have the same levels of passion, intellect, skill and capacity to transform your investment into wealth.
• They have the resilience, doggedness, and determination and a mindset of success against all odds that their counterparts in other parts of the world may not have developed yet.
• Though this young population is hampered by several obstacles: access to capital, training, mentor networks, overly bureaucratic institutions, problems of power and infrastructure among others, they remain incredibly optimistic and determined to succeed despite the odds.
• I, as an entrepreneur myself, am keenly aware of the struggles of being an entrepreneur in Africa, and the amount of courage it takes to build a startup, to turn an idea into a business.
• And now as a philanthropist, through the Tony Elumelu Foundation, we are helping to alleviate these challenges by equipping and empowering these young entrepreneurs with the capital, tools and skills for their businesses to thrive.
• Through the Tony Elumelu Foundation, we have committed US$100 million over 10 years to empower 10,000 African entrepreneurs across the continent and create 1 million jobs and add $10 billion in revenue to the African economy.
• Just five years into the programme we have empowered over 7,500 beneficiaries and counting.
• This presents a unique opportunity for collaboration between Japan and Africa, at both the government and company/individual levels, to help invest in the real future of Africa which is our young ones.
• The good news is that the world is listening, and we want Japan to become a part of this new paradigm.
• The biggest asset we have in Africa is our people – and what we do at TEF, is a testament to the transformative power of entrepreneurship.
• Indeed, the investment in these young Africans is the most impactful investment you can make.
• Global development partners like – UNDP, GIZ, ICRC, AFDB, etc. are embracing Africapitalism through the empowerment of young Africans.
• For instance, at the recently held Africa Union Summit in Niger, the Tony Elumelu Foundation and the United Nations Development Programme (UNDP) announced a new groundbreaking partnership to empower 100,000 young Africans.
• And all of us here at the TICAD summit can do even more!
• One of the ways TICAD can also participate in empowering our youth, the engine of Africa’s future, is to partner with credible local partners to deploy the Tony Elumelu Foundation Entrepreneurship Programme as a tried and tested model for the new Japan-Africa partnership.
• The Tony Elumelu Foundation Entrepreneurship Program is holistic in nature and targets all aspects of the entrepreneurial value chain across the 54 African countries.
• It consists of non-returnable seed capital of $5000, business management training, mentoring, country meetups across the 54 African countries, membership to the dynamic TEF alumni network, the largest database of African entrepreneurs; and access to TEF Connect, the largest digital networking platform for African entrepreneurs
• TEF Connect, which launched under a year, already has close to a million young African entrepreneurs as subscribers, actively trading, engaging, learning and growing. This database also offers an attractive pipeline for your businesses and I encourage you to sign up.
• We encourage Japanese companies and agencies to invest in Africa, in this youthful energetic population and their ideas, and see this young pipeline as an opportunity for investment, knowledge sharing and training on global best practices.
• Indeed, from our experience at the Tony Elumelu Foundation, these entrepreneurs and their businesses demonstrate over and over again that there is no better time to invest in Africa than now.
• Ladies and Gentlemen, in 2016 during the TICAD conference in Kenya, Japan pledged $30b for Africa over three years. Plus this year’s $20b is $50b.
• 10% of this is $5 billion, while 5% is $2.5billion!
• If we invested only 5% of this $50b fund in African youth, by just adopting the TEF model, we would have touched 500,000 lives across the 54 countries, broadening markets, facilitating job creation, improving income per capita and transforming not only countries but LIVES.
• From Japan’s own story and experience, we know how SMEs greatly contribute and define economies.
• Let us make this 2019 TICAD count for African youth by dedicating a percentage of the total sum to be announced at the end of this conference, to be directly invested in African youth.
• I welcome the discussions that we will have during the conference and look forward to a future of stronger economic ties between Africa and Japan.

Tony O. Elumelu, CON

Chairman, United Bank for Africa

Founder, The Tony Elumelu Foundation