Blog post by Tony Elumelu ( Entrepreneur and philanthropist )
Across the globe, the private sector has an important role to play in the achievement of the SDGs. With slow global growth and the end of the commodity supply cycle, many governments do not have resources required to fully pursue their development goals. And this is where the resources of the private sector become very critical. Through partnerships, the private and public sector can discover areas of alignment, especially in critical areas such as infrastructure, power, and agriculture, to mention but a few.
Private capital will go a long way is in solving intractable problems. However, beyond bridging the finance gap it is necessary to engage the private sector as they can support inclusive development through their organizational policies and practices. Businesses can drive inclusivity by developing products that are affordable and accessible by the rural poor and deliver benefits in the communities where they operate.
Similarly, by incorporating environmental, social and governance principles into their practices, businesses can ensure that they are firmly positioned for the long term, fostering sustainability.
Indeed, inclusiveness and sustainability are strongly embedded in my economic philosophy of ‘Africapitalism’. That is the idea that the private sector can and must play a role in the development of Africa, by creating financial prosperity and social wealth. It is a call to business to quit playing business as usual and embrace a higher ideal, which can ensure that global wealth and prosperity is more broadly shared and not exclusive to a minor elite.
My advocacy for private sector-led growth does not stem from theory, but from about 30 years of experience in Africa’s private sector. Through my businesses and investments, I have been able to see first-hand the transformative power of private capital in the lives of individuals and communities. United Bank for Africa (UBA), for instance with its presence in 19 African countries has created over 25,000 direct jobs, providing access to finance and serving over 14 million customers across 1,000 branches and call centers. We are indeed deepening financial inclusion and building the capacity of the private capital market to foster local and national financial transactions that will benefit the continent and create jobs. These experiences inspired the launch of the Tony Elumelu Foundation Entrepreneurship program – a $100 million initiative to identify, fund, train and mentor 10,000 African entrepreneurs over a 10-year period.
Within only a three year period we have recorded huge successes. A survey conducted last year revealed that over 50 percent of our startups have at least doubled their revenue and the number of people they employ. Their success stories inspire me to engage in and advocate for better policies that will improve the enabling environment for business across the continent. I do so in my engagement with presidents and policy makers across the world and on the various platform that I’m involved with. Such as a UN Sustainable Energy for All Council and the US Government Power Africa Initiative.
Specifically, and consistently, I emphasize the need to transform Africa’s power sector because of the huge multiplier effect power has on the entire continent. As a proponent of a more active role for the private sector, my main challenge to multilateral agencies, including the World Bank Group, is to rethink their model of development assistance to the developing countries in Africa.
What Africa needs is more trade and investment and support for entrepreneurs. And it is by prioritizing this that they can best engage the private sector on the continent. One sure way that the private sector in Africa can be engaged is by reducing the perceived and real business risks that deter the flow of investment into the continent, especially, foreign direct investments. We must change the persistent negative narrative around Africa to one of opportunity and attractive returns for discerning global investors.
And one other way the World Bank Group and others can help is by shaping global trade policies to ensure that the rules are reciprocal, fair, and beneficial to all parties and not just the more advanced nations. This is very important, especially in Africa where many nations are trying to diversify their export portfolios by coming up with innovative means to produce goods that are internationally competitive. However, if the rules of trade remain unfair, it is hard to see how Africa can build strong, diversified and resilient economies.
Multilateral institutions are also well positioned to assist developing countries in their drive to promote more private sector growth by supporting more homegrown entrepreneurs and their business ideas.
The Tony Elemelu Foundation offers a verified, tried and tested model to support the transformation of Africa. Africa was left behind in the 19th century industrial revolution. And as the fourth industrial revolution beckons, Africa cannot – and the world in fact, cannot – afford for Africa to be left behind again. It is our collective responsibility to ensure that no one, no one is left behind.
For more perspectives on the role of the private sector in supporting the SDGs, watch IEG’s recent event, Harnessing the Power of the Private Sector in Support of Sustainable Development.