The US-Africa Leaders Summit reflected the progress we have made towards establishing Africa as an attractive destination for investment on the world stage and that was certainly encouraging. But it also illustrated how much remains to be done.
The summit, convened by US President Barack Obama, brought together political and business leaders of nearly every African nation and enabled them to engage in meaningful dialogue with US policymakers and captains of industry.
US investors are beginning to understand that involvement in Africa should mean partnership rather than charity, and that investment in Africa’s long-term development will reward not only Africans, but also US businesses, investors and, by extension, the global economy.
We are clearly moving closer to the economic solution that I call Africapitalism.
Africapitalism is based on the idea that long-term investment in Africa, aimed at generating economic and social prosperity, boosts development, and an economically self-sufficient and sustainable Africa can become a major economic player, with benefits for its trading partners as well.
With that in mind, I was encouraged to see the global understanding of Africa evolving. During the business part of the summit, facilitated by New York mayor Michael Bloomberg, Obama announced private investment in Africa of $14 billion (R150bn). That is remarkable. A package that large, announced by a sitting president, would in the past have been provided as aid. Now it is coming as catalytic capital to drive job creation and economic growth.
It includes investments by Coca-Cola, Marriott Hotels and Blackstone, which are committed to Africa in the long term. This continues a trend. General Electric is investing in infrastructure development in Nigeria, Walmart is establishing itself in South Africa through Massmart, and IBM is expanding in Africa, starting in Nairobi.
A new wave of African business leaders are contributing to development in ways their predecessors never dreamed.
Heirs Holdings’ $2.5bn commitment to Obama’s Power Africa initiative is a contribution to sustainable economic development. The Dangote Group plans to construct a $9bn refinery to cater to Nigerian petrol consumption and will create jobs.
Along with these multibillion-dollar investments, we are investing in Africa’s future through smaller businesses and younger citizens. The Tony Elumelu Foundation is committing $100 million to fund 10 000 start-up entrepreneurs across Africa.
What will make these ventures succeed?
The US government, driven by Commerce Secretary Penny Pritzker and private investors, must recognise that Africa is transforming positively. For much of the past 500 years of African history, foreign economic involvement was about extracting resources and exporting wealth.
Today we are acquiring the capacity to generate wealth within Africa: refining peanuts into cooking oil; crude oil into petrol; cotton lint into garments; and cocoa into chocolate. Processing and manufacturing must be a key focus of investment.
Fundamental infrastructure also needs to improve. The lack of reliable power generation hinders economic development.
An additional $12bn in private funding for the Power Africa initiative, announced by Obama during the summit, brings total funding to $26bn, which promises to provide 30 000 megawatts in new capacity to 60 million households and businesses.
Governments must improve the investment environment in Africa, as with the agriculture and power sectors in Rwanda and Nigeria, to encourage domestic and foreign investment, all within the context of national development plans and clearly outlined targets. The US should pass the Energize Africa Act to expand opportunities to partner with African countries in the power sector, and extend the African Growth and Opportunity Act for 15 years.
As Secretary of State John Kerry said: “Business is not just business for the sake of business. It is for providing the foundation for people to be able to live their lives with opportunity, dignity, and respect.”
Strengthening US-Africa ties serves an important human purpose. It is also not just a conversation, it’s a journey. We’ve set the course, and we must stay the course.
Tony Elumelu is the chairman of Heirs Holdings and founder of the Tony Elumelu Foundation in Lagos, Nigeria.