The growth of African economies over the past decade has created great excitement amongst investors and encouraged a surge in foreign direct investment from those who see Africa as the new frontier. This has in turn prompted African philanthropist to recognise the potential of further growth through skills investment.
There is currently a growing trend of Africa’s high net worth business men and women, who are focusing on investments that address social and environmental issues. Many are on a mission to change the narrative of Africa that has for a long time been dependant on handouts from the West and being reaped off by multinational corporations, engaging in tax evasion leading to massive capital flight on the continent.
The story of how Africans are investing in Africa is being re-written . In the spirit of Pan-Africanism, philanthropist’s are galvanising themselves across the continent. They are not just focusing on their countries of origin to create opportunities for the growing young job seeking population. This is particularly evident in the way business mentorship programs and conferences that have become popular over the years feature business leaders from across the continent work together to nurture the next generation of emerging African business leaders.
There is a sense of excitement because this is seen as a chance to capitalise on the youth demographic which has been considered as an advantage for the future of the continent to prevent brain drain and encourage skills development.
The launch of various programs providing funding to startups in order to enhance economic growth, encourage integration across regions and reduce high levels of poverty continues to gain ground.
Initiatives such as the Tony Elumelu Foundation which has been highly publicised as well as many other initiatives by African philanthropist’s are now seen as a way to champion high impact investment that will encourage entrepreneurship among young people and spur on job creation.
More and more business leaders look to a future where Africa is self-sufficient. There has been a drive in particular, to make agriculture more attractive to young people. This was actually one of the issues that was recently discussed at the World Economic Forum in June this year when some business leaders made it clear that there is a need to transform small scale farming into viable businesses to ensure food security for Africa.
It is interesting to see the sense of urgency amongst many philanthropist’s who are of the view that if government and private sector get together, great things can happen in terms of moving the economy forward, with government playing a crucial role in creating an enabling environment.
According to Bloomberg news, at least 20 million young Africans come to the job market every year. African governments as we all know can not provide jobs for this huge number of job seekers that continues to swell each year. It is becoming more apparent that governments across Africa can work with private sector to enable and promote rural transformation to attract more young people into primary production in the agricultural sector. High impact investment being championed by African philanthropist’s and equity investment are now stepping in to help provide the funding.
We are already seeing young people getting into agribusiness not just at the primary production level but at all levels of the supply chain. From Rwanda to Uganda, young people are entering the food processing sector while others are developing technology that will make farming more interesting and accessible. Some interesting startups have emerged over the past few year and funding from philanthropists and other sources of funding has no doubt been instrumental in many small businesses getting off the ground and growing considerably.
The food processing business still remains relatively small in many countries and this is evident in the high levels of imported food that is shipped into Africa. In 2013, at least 35 Billion dollars was spent on importing food. This is a substantial amount of money being spent abroad to buy food that can be processed in Africa. We are essentially creating jobs elsewhere leaving many people unemployed in Africa. The initiatives being spearheaded by the likes of Tony Elumelu to encourage entrepreneurship in a wide range of sectors will help Africa be more sustainable and promote intra-Africa trade.
As more people engage in the discussion on breaking the chain of dependancy on development aid, it is become clear that Africa is capable of developing in a sustainable way based on it resources and ingenuity of its people.
In 2013, the extractive industries – oil, gas, diamond – racked in revenues of up to 394 Billion dollars. Africa is the richest continent in the world and yet a large percentage of its people continue to live in inhumane conditions.
This state of affairs is certainly a wakeup call particularly amongst some of the high networth individuals such as Van Niekerk of South Africa who is known to have given away 70% of his equity in the company he founded, Mertech group. Another South African philanthropist’s Cyril Ramaphosa is known to have been inspired by Bill Gates and gave away most of his wealth to social enterprises which he continues to support.
There is optimism that if Africa continues to grow in a sustainable way though African investment aimed at retaining wealth within the continent, this could inevitably lead to the so called ” cutting of the umbilical cord in a relationship of aid dependency” which has undermined the potential of Africa.