Opinion
Why African Philanthropists Seek ‘Africapitalism’
Eighty percent of the Tanzania population are farmers, producing 42 percent of the nation’s gross domestic (GDP). Yet economists predict the country will have one of the world’s 10 fastest growing economies between 2011 and 2015.
Elumelu’s foundation, among the leading African-funded practitioners of impact investing, brings both philanthropy and investing together as a new development model for African business.
A 2010 report by JP Morgan Chase and the Rockefeller Foundation suggested that such investments worldwide could grow to US$500 billion by 2020, and that the landscape for such philanthropic-minded investments is promising but relatively new in Africa.
The few African institutions engaged in such investments toil away in cultures propped up by foreign aid dependency. Over the past 60 years, rich countries have sent over US$1 trillion in development aid to Africa, according to Dambisa Moyo, a former economist at Goldman Sachs and author of “Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa.”
Elumelu has issued a call for “Africapitalism,” which he defines as economic transformation via private sector commitments to generate economic and social wealth. He is not alone in his quest to revamp Africa’s economies. The continent’s richest person, Aliko Dangote, who reportedly has a net worth of US$13.5 billion, runs a foundation (named for him, as well) that announced a N5billion naira (US$30 million) programme aimed at the creation of one million jobs. Dangote heads an empire that includes the continent’s biggest cement maker. He also has interests in sugar, flour milling, salt processing, textiles, real estate and oil and gas.
In addition, last year, the Nigerian oil magnate Theophilus Danjuma gave US$100 million to his foundation to make grants in education, healthcare and the arts. Other huge African donations were made by South Africa’s Francois van Niekerk (US$170 million to community-based projects) and Mark Shuttleworth (US$40 million to education, the arts and social change projects).
In 2010, Africa had 14 billionaires, according to Forbes: two Nigerians, four South Africans and eight Egyptians.
