Tony O. Elumelu CON speaks at the launch of the East Africa Exchange

In attendance: Presidents Paul Kagame of Rwanda, Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda, and Salva Kir of South Sudan.

Kigali, Rwanda

Thursday, 3 July 2014

 

Good Afternoon to all of you:

I stand before you as the Chairman of Africa Exchange Holdings (AFEX), and Chairman of Heirs Holdings, an African investment company that pursues investments on the continent that are designed to:

1. Create value for our stakeholders;
2. Create more jobs; and
3. Improve the macro-economic climate, consistent with the philosophy of Africapitalism.

Africapitalism is an economic philosophy that promotes long-term investment in strategic sectors that will create economic and social wealth.

Practitioners of Africapitalism understand that Africa’s future growth depends on the private sector making long-term investments in key sectors— like agriculture— that produce real profits for investors while creating long- lasting, fundamental social wealth.

I’m delighted to be here today to launch the East Africa Commodities Exchange with Presidents Paul Kagame of Rwanda, Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda, and Salva Kir of South Sudan.

If you are wondering why 4 leaders would assemble to launch a commodities exchange, the facts are that:

• The world’s population will reach 9.1 billion by 2050 and half of that growth is projected to come from Africa.  Farmers will need to grow 70 percent more food to keep up with the additional population.

• 70 percent of the world’s population of employed people are engaged in the agriculture sector.

• Africans desire development, and no leading economy has ever developed without making significant progress in the agriculture sector.

Therefore, agriculture is a key transformative sector for Africa, and to make progress in Africa, we must make progress in agriculture.

We must have food security. We must have food self-sufficiency.

The private sector has the innovation and entrepreneurship capacity to make up this food production gap, but needs government to create the enabling environment required for success.

So if we want to forever consign to the archives of history, the images of donor aircrafts landing in Africa to save our starving, huddled fellow Africans,

• What Africa must do is grow more food, increase access to markets and get better and more stable prices for our farmers.

• How Africa must do it is by treating agriculture as a business sector that generates jobs, tax revenues and commercial value, and not as a government welfare program.

Because despite increased commitment and spending by governments on agriculture, the challenge of attaining food sufficiency is bigger than the might of any single sector or actor.

In spite of all the good intentions, strategies and dollars of donors this cannot bring food security, without private sector investments and expertise.

Governments, donor agencies, or the private sector cannot fix it alone.  They must all work together.

If we aim to improve African lives on a large scale, we must institute fundamental, revolutionary changes to the overall agricultural process that brings in private sector capital- both foreign and domestic; technology- that enlarges the pool of players; and institutions, such as banks; all to generate solutions and value for all parties involved.

And that is exactly what EAX does.

That is why you see here governments, the private sector and international financing and expertise coming together to support this launch.

EAX puts our smallholder farmers at the center of our business model because, they are the most critical actors in any food security strategy. EAX is a commercial platform that will:

1. Give farmers access to multiple and competing buyers in more markets, so they can get up to 25 percent more for their produce;
2. Provide farmers with access to credit and financial services by making them bankable; and
3. Very critically, help farmers to reduce post-harvest losses, through warehousing

The over-all effect will be to increase their income and transform their lives and communities, an outcome that is consistent with the philosophy of Africapitalism.

Given that belief, that guiding principle, there is a clear need for more private sector players to commit to these kinds of initiatives, Heirs Holdings and the Tony Elumelu Foundation have partnered with Berggruen Holdings and 50 Ventures, using NASDAQ technology, to bring commodity trading that will increase market efficiency in the East African region and empower farmers.

The intent of AFEX is to establish such exchanges across Africa, in a manner that encourages integration across borders.  In light of this, in recognition of how far the East African Community has moved in this direction, we started here.

I have done this before by establishing the United Bank for Africa in 19 African countries.

The secret to that success was working and partnering with local and regional investors.  In the case of EAX, this will be no different.  The track record speaks for itself in this regard and we look forward to welcoming new investors for the EAX.

I am African, so making an investment on the continent that will impact lives is something I need to do, because if Africans do not do it, who else will.

I therefore want to give special recognition to both Nicholas Berggruen and Jendayi Frazer who genuinely believe in Africa’s potential and have personally invested their own money and time to make AFEX a success.  We need more partners like this – Western partners looking for genuine and equal partnerships with the African private sector.

I want to pay tribute to the Presidents here for their visionary leadership that recognizes that in the 21^st century some problems can be better solved through regional cooperation.

Specifically, I want to commend President Paul Kagame for creating the right enabling environment to attract investors like myself.  In addition, I want to thank him for his personal interest and commitment in making EAX take off here in Kigali.

I must especially pay tribute to our smallholder farmers, most of whom are women.  They work long and hard, often in isolation and economic vulnerability, to feed not only their families but entire nations, and ultimately the world, and who have too long gone unnoticed.

No longer will this happen because we now understand that the transformation of Africa will happen farmer by farmer, and that what is good for our farmers, is good for all of us.

Thank you.