Cape Town - Mo Ibrahim, the Sudanese-born founder of the Celtel cellphone empire, has set aside $150 million (R1.08 billion) to invest in African businesses. Within five years the fund and all profit will be donated to the governance award he established.
Ibrahim, who owned 24 percent of Celtel when it was sold for $3.4 billion in 2005, would not start other businesses as this would split his focus, he said.
Speaking on the sidelines of the World Economic Forum last week, Ibrahim said his fund would look only at African businesses and projects but would be run on commercial grounds.
"Other than ethical issues, it will have absolute freedom."
Ibrahim said he would look for opportunities in areas that were underserved. Top of mind were financial and other services as well as businesses that needed a cash injection to scale up operations so they could become successful pan-African businesses.
Ibrahim will soon step down as non-executive chairman of Celtel. He said the fund would be gifted - after three to five years and once it had gained critical mass - to the Mo Ibrahim Prize for Achievement in African Leadership, which he established in October.
The New York Times likened this to a Nobel prize for Africa.
Worthy ex-presidents from sub-Saharan Africa will get $500 000 a year for 10 years and $200 000 a year for life thereafter.
In addition to this, they can get $200 000 a year to pursue their philanthropic interests.
Until the investment fund was handed over to the prize committee, Ibrahim said he would pay all of the costs himself.
The recipients, who will be selected by a committee headed by former UN secretary-general Kofi Annan, will have to have left office willingly in terms of their constitutions and will have to have governed well. If they go back into politics, they will immediately lose the money.
Ibrahim, through his foundation, is also funding the establishment of a governance index that will rank the performance of different governments.
The index will be based on research by academics at Harvard University's Kennedy School of Government, using data from multilateral institutions.
The first index will be published in September and the first recipient will be announced in October.
Ibrahim is putting up all the money himself and will not ask for funding from anybody else, nor will he donate money from the fund to other causes.
Asked if the prize would be enough to tempt corrupt leaders to leave office, Ibrahim said it would not - but that it would give good leaders the recognition they deserved as well as the prospect of being able to have a good life outside of politics.
"In the US and Europe, people get rich after they leave office but in Africa there is nothing."