Tony Elumelu, who made a meteoric rise as a banking executive before retiring last year, knows what he'd like to accomplish with his new initiatives.
"One of my greatest joys would be to look back and say I've helped to create ten or a hundred very successful African entrepreneurs," the 48-year-old Nigerian said during an interview in late August at the end of an event-packed visit to East Africa.
Elumelu said his foundation encourages entrepreneurs to identify what assistance they need to create or expand businesses that can become successful, multi-national corporations. He also said African business and political leaders must support and learn from one another if they are to "establish successful trade relationships and build world-class economies."
He struck the same theme in visits to Rwanda, Uganda and Kenya last month, promoting Africapitalism - "private sector commitment to the economic transformation of Africa through investments that generate economic and social wealth." Last week he returned to Rwanda for a trade and investment-focused visit with a delegation of high-level Nigerian executives led by President Goodluck Jonathan.
Until last June, when a 10-year term limit adopted by the Nigerian Central Bank for chief executives brought his banking career to a close, Elumelu was Group Chief Executive at UBA. The bank rose to the top tier of Nigerian financial institutions after Elumelu engineered a 2005 merger between his Standard Bank Trust and the former United Bank for Africa. He remains a major UBA shareholder.
Currently, he is directing both an investment company, Heirs Holdings, which has purchased assets in oil and gas, hospitality and agriculture firms - and the Tony Elumelu Foundation. Its aim is to promote "excellence in business leadership and entrepreneurship across Africa."
The foundation relies primarily on "impact investing" to achieve those goals. Producing a financial return promotes entrepreneurial rigor, Elumelu said.
"Startup businesses need equity capital, not debt capital," he said. "If we create the right environment, capital will come to Africa, because the returns are indeed high enough."
Many ingredients are critical to success, in Elumelu's view. Some firms require substantial financial infusions, he said, but "I have also seen others that have been transformed by exposure, human capital, resource support [or] the right networking opportunity."
Elumelu recently joined a group of major foundations and large investors to launch a rating system to measure the effectiveness of for-profit social enterprises. "Those of us pioneering the impact investing field in Africa are setting a new standard for both philanthropy and investing within Africa," Elumelu said in an announcement at the Clinton Global Initiative in New York in September.
He said the Global Impact Investing Rating System encourages investments "because of the opportunity it provides to benchmark and measure the social and environmental impact of an investment as clearly as the financial return."
He acknowledges that small and medium enterprises "promote economic activity" and engage individuals in the economy. "But one big, successful company can have more impact than many little businesses," he said. "This continent needs to have many big successful corporations - pan-African institutions, national institutions."
The focus on major concerns with the potential to transform critical economic sectors informs Elumelu's personal investments as well as his philanthropic ones.
One large entity he is aims to rejuvenate through Heirs Holdings is the long-troubled Transnational Corporation of Nigeria (Transcorp), a private conglomerate formed in 2005 to privatize the government-owned telecommunications provider Nitel. In addition to purchasing a 75 percent stake in Nitel, Transcorp bought the Abuja Hilton and other leading Nigerian hotels, as well as interests in oil and gas and agriculture.
When Elumelu's "strategic investment" in Transcorp in April sparked concerns about his intentions, Heirs Holdings said its efforts were intended "to turnaround the fortunes of the company, in order to fulfill the company's original mission as a vehicle for popular capitalism and mass participation in Nigeria's economic potential."
Elumelu joined the Transcorp board, and last month was elected chair, replacing Dr Ndi Okereke-Onyuike. Elumelu installed a management team headed by UBA veteran Manz Denga as chief executive. Denga previously led UBA's expansion into east Africa and ran the bank's Kenyan operations.
Expansion into Africa was one of Elumelu's priorities at UBA. "He re-focused the bank as a Pan-African financial services group, injecting capital into neighbouring economies, delivering products and services, specifically designed for the African market place," Heirs Holdings says about its founder. One of his aims was "breaking down the barriers to African regional trade that have historically held back the continent's potential."
While he expresses confidence that capital will flow to Africa, attracted by returns that are higher than in most regions, he stresses this can only happen "if we create the right environment." Among the conditions he lists as essential are infrastructure, legal and regulatory reforms and human capital development.
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"If you're giving somebody U.S. $5 million to set up a small business, and the person has to acquire a generator for power, sink a borehole and transport over bad roads, at the end of the day that business will not do well," he said. "We have to enhance and improve the competitive landscape."
In an address at Nairobi's Strathmore Business School, Elumelu urged Kenyans to demonstrate what can be accomplished. "Kenya is brimming with talent and innovation, as well as hope for the future," he said.
Nigerian and Kenyan companies, with their knowledge of local and regional markets, have the potential to compete with multinationals he said. Elumelu is bringing his foundation's African Markets Internship Programme for MBA students from top business schools to East Africa.
Strathmore students will join the program next year.
In December, Elumelu will return to Nairobi to join Virgin Group founder Richard Branson as a keynoter at a conference designed to pair entrepreneurs and investors. The one-day event, Convergence Africa, has been launched in conjunction with the Africa Awards For Entrepreneurship, jointly sponsored by Legatum Capital and the Omidyar Network. The award recognizes successful entrepreneurs with a grand prize of $100,000 and five additional $50,000 honors.
