By Arize Nwobu Acs
27 JUNE 2016– Capitalism is defined as an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. It is ‘’a way of organizing an economy so that the things that are used to make and transport products such as land, oil, factories, ships etcetera are owned by people and companies rather than by government.’’ The synonyms for capitalism are private enterprise, free enterprise, privatized industries, laissez faire, private ownership.
Africapitalism would seem like the African version of capitalism, but not so, according to the proponent, and Founder, Tony Elumelu Foundation and Chairman, Heirs Holdings, Mr Tony Elumelu, an audacious strategist and quintessential entrepreneur, who led the team that gave birth to Standard Trust Bank(STB) from the ashes of Crystal Bank, at a period the banking industry was steeped in a crisis of confidence, and made great success of it through innovative and aggressive marketing and best practices. STB was to later merge with a much bigger and more established United Bank for Africa Plc (UBA) in one of the most strategic mergers in the Nigerian capital market.
According to Elumelu, ‘’Africapitalism is the middle ground between business and philanthropy. The key tenet of the concept is that it is both necessary and possible for entrepreneurs and society to prosper simultaneously and entrepreneurship should be the cornerstone of Africapitalism and a defining feature of market liberalization in Africa’’. He believes that despite laudable progress, the private sector is moving too slowly towards entrepreneurial value creation: ‘’If Africa is to meet the demand for new jobs, and to create wealth sufficient to sustain domestic economic growth, we must sharpen our entrepreneurial focus and make fast progress.’’
To walk the talk, Elumelu declared the year 2015 as the Year of the African Entrepreneur and backed it up with a launch of US$100million Tony Elumelu Entrepreneur Programme(TEEP) which is aimed at identifying and providing mentoring, training, networking and funding for 1000 African start-ups per year for the next 10 years. TEEP kicked off in January 2015 with 20,000 applications from 54 African countries and territories, and with support from Accenture and a pan African selection Committee. 1000 budding entrepreneurs from 54 African countries underwent 12 weeks online business skill training programmes and paired with 400 expert mentors around the world. And towards the end of 2015, a Boot camp held in Lagos where entrepreneurs got US$5000 in seed capital with the option of a further $5000 low interest loan or equity each year to nurture their ideas and ultimately develop the continent.
Africapitalism has received rave reviews in international publications such as the Financial Times, Fortune and the Economist. It has also been a theme of discussion at several international conferences such as the Oxford African Conference organized by Oxford University, London, Africa CEO Forum in Germany in 2014 and US Africa Summit hosted by President Obama in Washington, also in 2014. An African Business news website, Ventures Africa, reportedly referred to the US President as ‘’Obama the Africapitalist’’ following his pledge of $7million to the ‘’Power Africa’’ initiative which aims to advance access to power in Ethiopia, Ghana, Kenya, Liberia , Nigeria and Tanzania. And in a keynote speech at the 2014 Global Entrepreneurship Summit, US Vice President, Joe Biden praised the importance of creating an entire climate in which innovation and ideas flourish.
In recognition of the power of entrepreneurship in driving economic growth, the Chartered Institute of Stockbrokers(CIS), adopted ‘’Entrepreneurship and the Capital Market: Fast Tracking a New Economy for Africa’’ as the theme of its 19th Annual Stockbrokers Conference which held on October 29-30th, 2015 at Eko Hotel, Lagos. CIS has often been in the forefront in generating ideas to drive the economy. Prior to the conference, the Institute had articulated an agenda for the then in-coming government of President Buhari, through the Association of Professional Bodies of Nigeria(APBN), and subsequently, the Governing Council of the Institute paid a courtesy visit to the Vice President, Yemi Osibanjo and made strategic submissions on the Economy and capital market.
The 19th Annual Stockbrokers Conference was widely adjudged as the best in the series. It featured relevant and topical sub-themes and witnessed a confluence of reputable experts in finance, business and economy, including the Chief Executive Officer, Tony Elumelu Foundation, Ms Parminder Vir (OBE), Chairman, Ecobank Transnational Plc, Mr Emmanuel Ikhazobor, Managing Director/CEO, Financial Derivatives, Mr Bismarck Rewane, Chief Executive Officer, Nigerian Stock Exchange, Mr Oscar Onyema, Director of Capital Markets, Johannesburg Stock Exchange(JSE), Ms Donna Oosthuyse, Founder/CEO, Ruff ‘N’ Tumble, Mrs Nike Ogunlesi and Managing Director/CEO, Chapel Hill Denham Group, Mr Bolaji Balogun. Others are, Chairman, National Association of Securities Dealers(NASD) Mr Tola Mobolurin- a doyen of the capital market, Acting President, Chartered Institute of Stockbrokers, Mr Oluwaseyi Abe, Group CEO, United Capital, Mrs Oluwatoyin Sanni, Head, Leveraged Finance and Debt Capital Markets, Nigeria, Rand Merchant Bank, Mr Labi Williams, Managing Director/CEO Stanbic IBTC Capital Limited, Mr Funso Akere, Divisional Head, SME and Consumer Sales, Fidelity Bank Plc, Mr Kennedy Opara, Executive Director, Bank of Industry, Mr Waheed Olagunju and others.
The sub-themes of the conference were, Africapitalism, Social Capitalism and Impact Investing: Options and Strategies for Africa, Overview of Business in Africa: Opportunities and Possibilities, SMEs and African Economies: Driving the Engines of Growth through Creative Financing, Incentivising Listings and Stimulating Investment in Securities and Evolving A Dominant Capital Market-Based Financing Structure for Greater Development. The kernel of the conference was an advocacy for the development of a dominant capital market-based financing culture, as against the present predominant bank-based financing system which has severe shortcomings because of banks’ apathy to lend to the real sector.
Worldwide, the capital market is the bedrock of economic development. The slow economic growth and development in Africa has been correlated to the budding and slow growth of its capital markets. In highlighting the importance of the capital market in Africa, the International Finance Corporation(IFC), the private arm of the World Bank had noted that ‘’Africa cannot adequately address its enormous development financing and investment needs with existing funding sources. The funding gap on infrastructure alone is estimated at US$310billion annually and the challenges associated with developing efficient capital markets in sub-Saharan Africa are huge and therefore require financial interventions and technical assistance in several areas.’’ The capital market optimally allocates capital, catalyzes industrial growth faster and helps economies to achieve inclusive growth, among other benefits.
African entrepreneurs need to look more to the capital market for more stable and flexible funding options, and aspire to quote their businesses on the stock exchange in order to also cultivate the culture of best practices, necessary for sustained business growth. Most of the best companies in the world are quoted on the stock exchange. Budding entrepreneurs on the bill of TEEP may conquer the world and blossom into giant multinationals if they adopt the philosophy to start local and think global. Africapitalism and a capital market mentality may be the leverage or ‘’magical pollyana’’ Africa needs to achieve a quantum and faster economic development.
Arize Nwobu, a Chartered Stockbroker and Financial Journalist, is an Assistant Director/Head, Research and Technical Chartered Institute of Stockbrokers. He wrote via arize.nwobu@cisnigeria.com Tel: 07044513330, 08033021230.
