ENTERPRISE54 – Tony Elumelu, CON is a Nigerian Entrepreneur, with over twenty years of experience in the Banking and Investment sector in Africa. In the course of his career, Elumelu says he has met hundreds of entrepreneurs who carry in them the hope of Africa’s future. “Many of them young people with incredible dreams and
ENTERPRISE54 – Tony Elumelu, CON is a Nigerian Entrepreneur, with over twenty years of experience in the Banking and Investment sector in Africa. In the course of his career, Elumelu says he has met hundreds of entrepreneurs who carry in them the hope of Africa’s future. “Many of them young people with incredible dreams and business ideas but without the experience or the access to mentoring and support required in order to build a bankable business plan,” he said.
With no access to the right resources and lack of know-how, the ideas remain dreams in the hearts of the young African population, meanwhile the continent’s growth is stifled by high rates of unemployment and poverty.
But not for much longer.
Elumelu has chosen to rise to the challenge. The Nigerian entrepreneur has personally committed $100 million to empower African entrepreneurs through the newly launched Tony Elumelu Entrepreneurship Programme (TEEP).
Elumelu who is the chairman of Heirs Holdings and the Tony Elumelu Foundation, at the launch of the program in Lagos Nigeria on December 1, said that his philanthropic commitment was driven from the stance that government and big corporate companies alone cannot provide the number of jobs required by the millions of young Africans entering the job market every year.
“Demographic trend show that Africa needs to create 10 million jobs a year to sustain its young population,” Elumelu said.
TEEP will identify and help grow 10,000 start-ups and young businesses from across Africa over the next 10 years, targeting the creation of 1,000,000 new jobs and $10 billion in annual revenues.
Africa’s Booming Entrepreneurial Space
Elumelu is optimistic that Africa’s young entrepreneurs have the capacity to grow Africa’s economy. He says: if he could make it successfully on the continent, so can the next generation of Africans.
“To be able to make it at home, on a continent handicapped by narratives of hopelessness, the fact that entrepreneurs from humble beginning, like myself, like Ayodeji Adewunmi the co-founder of the Nigeria job search site Jobberman, like Monica Musonda, the CEO of Java Food in Zambia, like Strive Masiyiwa of Econet in Zimbabwe, not only speaks to the potential for success in our homeland, but it gives hope to other budding African entrepreneurs, wherever they may be, that success is possible,” he said.
Elumelu has met several young entrepreneurs who have deep insight into local consumer demand. “They can spot unique gaps in the market for specific products and services. They can tap into strong networks and often exhibit a burning drive to create innovative, often disruptive, solutions to complex challenges,” he said.
To him, these are young people who can fuel Africa’s future, but who often lack the capital, the training or the support to take their strong small business to national or regional scale. It is this gap Elumelu seeks to fill, to provide the capital investment and support for young entrepreneurs on the continent to flourish, add value to lives and help Africa rise to the top on the global supply chain.
A Pan-African Program
According to Parminder Vir, Director of Entrepreneurship at the Tony Elumelu Foundation, TEEP will be an annual program. An official application process will start in January 2015 on an online application portal managed by the foundation. African entrepreneurs who are resident on the continent will have the opportunity of applying.
Over 10,000 applications from Pan-African Francophone, Anglophone and Portuguese Speaking Africans across 54 African countries are anticipated. Vir says the program is open to both business and social entrepreneurs who have physical or technology-enabled business ideas, or existing businesses not over three years in operation.
A group of independent judges will select the best 1,000 businesses from a range of industries in Africa. The selected entrepreneurs will then be taken through a series of training, mentorship and networking opportunities. There is no age limit for application and the opportunity is open to new business ideas or existing businesses not older than three years.
“At the end of that, the entrepreneurs on our program will be provided seed capital investment of $5,000. As they develop and grow their business plan, they will be able to then access their second round of funding which will be structured as a loan or as an equity investment,” says Vir.
“The program is truly pan-African,” she says. It prides itself on the uniqueness of bringing together all the critical tools that entrepreneurs need to succeed.
TEEP is inspired by three guiding principles: the inclusive economic philosophy of Africapitalism, based on the belief that a vibrant African-led private sector is the key to unlocking Africa’s economic and social potential; commitment to drive African economic growth through African entrepreneurship; and a mission to institutionalize luck by creating an environment where African entrepreneurs can get critical elements of support in the early stages of their business life.
Why Entrepreneurs Fail
Within their first year of starting, 95 percent of businesses fail. Omololu David Aiyeola points to two factors that led to his failure as an entrepreneur, a poor business environment and lack of know-how.
Aiyeola says he experienced the hard side of entrepreneurship when he resigned from his job to start his business. After months of bootstrapping, he soon ran out of funds and turned his office space into a mini-mart where people purchased sachet water and mobile recharge cards. This was a huge shift from his initial plan to run a social enterprise that teaches adolescents how to save and be financially empowered. He says if he knew entrepreneurship was more than just launching a business, he would have stalled his desire to start up.
Like Aiyeola, many young entrepreneurs launch their businesses without carrying out a feasibility study or testing out the market to ensure their products or services will sell. Most operate on assumption.
Segun Ogunlana, the founder of Afripreneur, a media company that provides online access to training and research for entrepreneurs, says mentorship is also an indispensable element in the journey of entrepreneurship.
Ogunlana started his business out of the frustration of seeing the increasing rate of unemployment in Nigeria. He said his experience finding an internship placement during his days in the University first exposed him to the reality of the high rate of unemployment. Graduating with good grades was no guarantee that you would find a job, he said.
But in 2011 after launching his business, he decided to spend the next three years conducting in-depth research on the challenges of entrepreneurship. He says his findings will enable him to better position Afripreneur for its 2015- re-launch. Ogunlana says he is excited by TEEP. This is an opportunity long overdue, he says.
Not Funds, but early mentorship, is vital for young entrepreneurs
A member of the selection committee, Dr. Ayodeji Adewunmi, the CEO and Co-founder of Nigerian job search site, Jobberman.com, while expressing his views described the program as ambitious and encouraged entrepreneurs in Africa to maximize the opportunity.
The most important thing about entrepreneurship itself is to “believe”, Adewunmi says.
In his opinion, the program is one that will help entrepreneurs increase their chances of moving from zero to one on the growth scale. The organizers have democratized the application process to ensure that people who are genuinely in business and have a product or service that can fundamentally change people’s lives get the opportunity to do exactly that.
Adewunmi has experience in starting and growing a business as an entrepreneur. In August 2009, Jobberman.com, an online job search portal was launched to help jobseekers find new opportunities. Within its first three years, it had over 50,000 daily unique visitors. Today, the online portal is one of the most popular on the continent. It prides itself in the high number of users as well as the quality of jobs recruiters post on the site.
The young entrepreneur started the venture as a student, with two of his friends- Opeyemi Ayodeji and Olalekan Olude. His background in Medicine and Surgery from Obafemi Awolowo University was not a limiting factor. But he says if he had received access to an opportunity like TEEP when he started out, he would have had a better entrepreneurial journey because of his trust in the pedigree of the founder of the program.
“He has exposure to at least 20 African markets,” he says. Elumelu also works closely with the Nigerian government and business leaders to tackle the challenge of unfavorable business eco-systems through policy reviews and the creation of proper infrastructure.
Although some entrepreneurs might gravitate towards TEEP because of the promise of seed capital investment, Adewunmi says funding is not the only challenge to today’s entrepreneur.
In addition to a lack of funding, access to the right mentors and network of people to help take the business to the next level is also a challenge. “Those are the things that money potentially cannot buy but experience, expertise, know-how, network and of course local understanding of the culture and context are very important. So I think it [TEEP] would have made a huge difference,” he says.
TEEP has a strong mentorship plan as a component of the program. “We have over 500 mentors that we have selected to support the program,” says Vir.
The program will also provide information in the form of an online resource library with access to case studies, information about finance and funding opportunities. “We are going to supplement online learning with offline and face-to-face bootcamp,” Vir explained. Part of the initiative will be to host a global entrepreneurship forum in Lagos to connect the entrepreneurs and also help those in the program develop soft skills.
Elumelu who is regarded as one of Africa’s most successful entrepreneurs, describes himself as lucky, thus his ambition to institutionalize the concept of luck through TEEP’s support system for young entrepreneurs.
His success was made possible because he had access to the right mentors and capital investment. He says, “I believe one of the key reasons why I made it in business is because early on in my career in Nigeria, I benefitted from the mentorship of Chief Ebitimi Emmanuel Banigo at Allstates Bank.”
Like Elumelu, young Adewunmi’s success was facilitated by an early mentorship. “Chika Nwobi was the first investor in Jobberman via his angel financing vehicle, L5Lab and the mentorship that came with that was priceless,” Adewunmi says.
Stepping up to the next level
For entrepreneurs, beyond launching a business, it is also critical to nurture and grow it. Adewunmi and his co-founders are working to make Jobberman.com the best destination for jobseekers and employers in Africa. “The goal is to build the pre-eminent employment franchise on the continent. Africa is going to be home to 1 billion people in the working population over the next 40 years and we want to play a big role in placing people in jobs across the continent,” he says.
Moving his business to the next level does not include venturing into a new line of business but rather strengthening the core of the existing business. “We don’t want to be all things to all people but rather be known for facilitating recruitment, employment and career advancement on the continent,” Adewunmi says.
“Whether you are in Lagos, Accra, Johannesburg, Nairobi or Dakar, Africa is buzzing with entrepreneurs who need a platform to enable them to take their business or idea to the next level,” says Vir.
Adewunmi shares in the optimism. He says the opportunities in Africa are not only to create wealth but also to add value to the continent through products or services rendered as well as through entrepreneurial mentorship.
“For me, it’s been five years of fun but it has also been five years of ups and downs. I think in general it’s a perfect time to be an entrepreneur on the continent. A lot of the economies in Africa are changing very fast. The economy on the average is growing at about 5 percent GDP growth rate across the continent,” he says.
TEEP has been designed to provide a mechanism for entrepreneurs to grow the African economy, says Vir.
“Entrepreneurship and Entrepreneurs worldwide are the drivers of economy. They are the drivers of job creation and Africa in that sense is no exception,” she says. Adding, “If you look at it, entrepreneurship is driving that across Latin America, across America. Europe, as it emerges from austerity is turning to its startups and entrepreneurs to help drive the economy. So they are a vital part of the economic growth of the African continent.”
Although Elumelu has a background in Banking and Investment, the program is open to the growth of entrepreneurs in any sector or field. “We are building an eco-system to identify and cross-pollinate grassroots innovation across Africa, sparking intra-African trade and investment and accelerating success,” Elumelu says.
TEEP is the first of its kind to be launched by an African philanthropic organization.
Editor’s Note: This piece first appeared on Harvard University Africa Policy Journal