Sh275bn programme to boost entrepreneurship in Africa

By Edna Mubiru

Ugandan entrepreneurs have the opportunity to realise their potential by participating in a $100m (sh275 billion) programme launched in Lagos, Nigeria on Monday.

The 10-year Tony Elumelu Foundation Entrepreneurship Programme will identify and plant seed capital in 10,000 startups with a target of creating one million jobs and generating $10b in annual revenues.

“Africa is buzzing with entrepreneurs who need a platform that enables them to take their business or idea to the next level.

The Tony Elumelu Foundation Entrepreneurship Programme has been designed to provide that mechanism,” said Parminder Vir, the programme director, during the launch.

In Uganda, the rise of the entrepreneur is evident just by the turnout at events such as Vision Group’s Pakasa Forum and Yiiya Ssente events.

Using the World Bank Ease of Doing Business research findings across the continent, the foundation zeroed in on $10,000 as the average amount of initial capital to inject in the selected businesses. This includes expenses such as registration and licensing, office space and at least two employees.

“We are not calling it a grant because the money has to be earned by the entrepreneur. They will apply on the foundation’s website and go through a rigorous selection process, competing with all the other applicants across the continent,” Vir added.

As it is with Uganda, businesses in Nigeria fail in their first three years of operation. So, the foundation is looking for entrepreneurs with a clear idea that is sustainable and commercially viable.

Statistics available indicate that a third of all Ugandan businesses collapse before their first birthday and over half collapse before their fifth.

“The business plan should have the market potential of the idea, a clear financial model and the potential to be replicated across various markets,” Vir added.

“We are not giving any quotas to different parts of Africa and are not putting a quota for women. All entries will be subjected to the same process and it will all be earned equally. There is no age limit either,” she said.

The programme includes business training, mentoring, a boot camp and participating in the foundation’s annual economic forum.

Tony Elumelu, who is a product of mentorship and chairman of Heirs Holdings and chairman of Uganda Bankers Association board, says the future of Africa lies in its entrepreneurs.

“Governments cannot create the capacity of jobs the continent needs. What the foundation is doing is to help drive businesses that will in turn create jobs.

What governments should do is create an enabling business environment, such as easing licensing requirements, increasing access to power and ensuring the rule of law,” said Elumelu, a champion of the Africapitalism concept.

In a recent issue of The Economist, The World in 2015, Elumelu writes: “For centuries, the continent was impoverished by the extraction of raw materials by colonial powers. Africa was unable to generate or sustain its own wealth, as it was forced to buy finished goods created with African resources at premium prices, and it lacked basic infrastructure, except for the roads and ports built to move exports.

“If Africa is to transcend that chapter of its history and realise its economic potential, it must first become self-sufficient — and the private sector is vital to this process.

“ Imagine the same continent filled with businesses that can process crude oil into petroleum, cocoa pods into chocolate and cotton lint into fabric, all while retaining the finished-goods premium instead of sending wealth overseas. The term “Africapitalism” describes the process of transforming private investment into social wealth.

“ As homegrown businesses meet social and economic needs by creating goods and services with an innate understanding of the local environment, they can bring private capital to vital infrastructure like road transport and power generation. And they can create jobs for Africans, which will in turn create an African middle class — a new generation of African consumers.”

The entrepreneurship programme is the first step to realising a sustainable Africa that is creating employment for its youth.

Entries for the first phase of financing open on January 1 and close on March 1 on the foundation’s website.