In an effort to address Africa’s growing unemployment, Nigerian philanthropist Tony Elumelu is spending $100 million of his own money to kick-start hundreds of new small businesses – and to identify young entrepreneurs across Africa.
Elumelu is the chairman of Heirs Holdings and the Tony Elumelu Foundation. He says government and large companies alone cannot provide enough jobs needed by the millions of young Africans entering the job market every year. The funds will help identify and grow 10,000 start-ups and young businesses from across Africa over the next 10 years.
Demographers say the continent will need 10 million jobs a year to sustain its young population. The new funding aims to create one-tenth of those jobs and create $10 billion in annual revenues. The financial support will come through the Tony Elumelu Foundation Entrepreneurship Program.
The foundation’s director of entrepreneurships, Parminder Vir, said the first application form will appear online in January on the group’s portal. Over 10,000 applications from across Africa are anticipated.
A group of independent judges will select the best 1,000 business ideas. The selected entrepreneurs will then be taken through a series of training, mentorship and networking opportunities. There is no age limit for applicants, and the opportunity is open to new 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,” Vir said. “As they develop and grow their business plans, they will be able to then access their second round of funding which will be structured as a loan or as an equity investment.”
Giving young Africans the tools to succeed
“The program is truly pan-African, it is holistic, it is unique. You know we are bringing together under one umbrella all the critical tools that entrepreneurs need to succeed.”
Dr. Ayodeji Adewunmi, the chief executive officer and co-founder of Nigerian job search site, Jobberman.com, is a member of the selection committee. He says the program is ambitious and he encourages entrepreneurs in Africa to make the most of the opportunity.
“It is also going to be transformative,” says Adewunmi.
Adewunmi has about five years’ experience running his own business. He says things would have been easier for him if he had received access to such an opportunity when he was starting out.
Meanwhile, Vir says Africa is buzzing with entrepreneurs who need a platform to enable them to take their business or idea to the next level.
Adewunmi shares that optimism. He says in Africa there are opportunities not only to create wealth but also to add value to commodities with new products from cocoa, tea, food and other resources.
“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,” he said.
“The economy on the average is growing at about 5 percent of GDP growth rate across the continent. And of course, I think it is also an opportunity for entrepreneurs to be able to look beyond today into the future with respect to helping other people,” he said.
Vir says the future of global expansion depends more on these private sector actors than on governments alone. She says the Tony Elumelu Foundation Entrepreneurship Program is designed to provide mechanisms for entrepreneurs to begin new economic growth – and to develop commercially successful enterprises.