The Tony Elumelu Foundation’s Contribution to Africa’s Economic Development Agenda
The Tony Elumelu Foundation (TEF) focuses on economic development in Africa. Tony O. Elumelu, the founder, is an entrepreneur, investor and philanthropist based in his homeland, Nigeria. This foundation was established in 2010 and is active in all the 54 countries in Africa. Tony Elumelu believes that the only way Africa will develop is if all the counties in the continent achieve economic success.
This foundation mainly focuses on the youth because this is a group that is highly marginalized, yet they make up the largest portion of Africa’s population. According to a 2019 United Nations report, approximately 60% of Africa’s population is below the age of 25 years.
This makes Africa the youngest continent. Unfortunately, youth unemployment is a big challenge in all the African nations, and most of the unrest experienced in the continent in the recent past has been attributed generation that is getting tired of waiting for employment opportunities.
One of the core objectives of the Tony Elumelu Foundation is catalyzing economic growth by encouraging youth entrepreneurship. This will encourage job creation and be a driving force behind poverty eradication. Since the government cannot create adequate employment for its citizens, TEF believes the solution lies with the private sector.
Tony O. Elumelu also uses his investment company, Heirs Holdings, to provide the youth with the necessary resources to kick start their journey as business owners and job creators. TEF implements its agenda by researching businesses that can benefit the community by providing much-needed services and goods.
TEF also hosts an annual forum which attracts entrepreneurs across Africa. Since TEF has a strong relationship with the public, private, and development sectors, it has seen great success in its mission to create economic prosperity, especially for the youth.
The TEF Entrepreneurship Programme
This programme was launched in 2015, with a $100 million contribution from Tony Elumelu. This programme aims to empower at least 10,000 African entrepreneurs in 10 years. So far, this programme has supported more than 9000 entrepreneurs across 54 countries.
In addition to financing their projects, TEF provides capacity building support and advisory. Additionally, its digital networking platform TEF Connect links entrepreneurs to a market of more than one million Africans.
In the first three years, the entrepreneur programme received more than 150,000 applications. This could be because many startups struggle to get financing from lenders. After all, such businesses are considered a risk. Additionally, many youths in Africa do not have assets that they can use as collateral. So, even though their business ideas are viable, many remain just that, ideas, since the youth lack financing support.
The high demand drove TEF to seek partnerships so that more young entrepreneurs can be enrolled in the programme. The United Nations Development Programme, the African Development Bank, the International Committee of the Red Cross, the African Development Bank, United Bank for Africa plc, and GIZ partnered with TEF to ensure this programme reaches more people and that it becomes a success.
TEF has access to the largest entrepreneurship ecosystem in Africa, and this has made it possible for the team to follow a rigorous process of identifying, mentoring, and funding entrepreneurs across the continent.
TEF’s goal is after the enrolment of the 10,000 entrepreneurs, with the right guidance, they will create one million jobs, and generate up to $10 billion in additional revenue. TEF Partners can also step in should the entrepreneurs need further financing for expansion. This second-tier financing will be in the form of debt or equity financing.
In some cases, one partner may opt to provide support for the youth in a particular country. For example, UNDP offered to support 10,000 young Malian entrepreneurs over three years through the TEF-UNDP Mali Entrepreneurship Program. This initiative was part of a broader TEF-UNDP Entrepreneurship Program which was launched in 2019 in a bid to support 100,000 young entrepreneurs across Africa.
How the TEF Entrepreneurship Programme works
Once TEF has identified African entrepreneurs who deserve the support available, the young entrepreneurs go through a vigorous process, not just to get funding, but also the expertise to successfully run their businesses. TEF is not just concerned with the capital constraints that entrepreneurs in Africa face, but it would also like to bridge the gap between successful startups and those that fail.
Between 2010 and 2018, startups in Africa had a 54% chance of failing. Although this figure is lower than that of the US and India, at 67% and 90% respectively, Africa’s unemployment levels make the situation worse.
TEF appreciates that the best way for Africa to get away from the entangled web of youth unemployment and startup failures is by providing entrepreneurs with a chance to make their business a success, and ultimately lower the rate of unemployment. For example, Mozambique has had the lowest startup failure rate in Africa at 25%. It is also one of the countries in Africa with the lowest unemployment rates at 3.4%.
TEF has taken the following measures to help ensure startups become a success.
- Startup Enterprise Toolkit
This is a 12-week programme that involves educating entrepreneurs on the basic skills necessary to run a business successfully. Some of the subjects covered include starting and scaling the business, marketing strategy, business development, product design, and effective management skills.
- Online Resource Library
Since TEF is targeting young entrepreneurs across Africa, it ensures that all the entrepreneurs have access to all the necessary materials online. Business-related materials include case studies, tasks, videos, and templates. The candidates also get to watch a 12-weeks-series showing the founder’s journey as a businessman and the business values that led to his success.
- Online Mentoring
The selected entrepreneurs also have access to world-class mentors, from Africa and the rest of the world. These mentors have gone through similar challenges in business, and the young entrepreneurs have a chance to learn from them without necessarily experiencing it themselves. Startups have a better chance of survival if entrepreneurs take the path that is more likely to lead to success.
Besides providing individual support to young African entrepreneurs, TEF also organizes meet-ups for those in the same locality or country. Beneficiaries of the TEF entrepreneur programme use these meetings to share their experiences and to form strong ties, not just with the various business entities but with government institutions as well. These meet-ups also help entrepreneurs to build market linkages.
- TEF Entrepreneurship Forum
The TEF Entrepreneurship Forum takes place annually, and it brings together prominent African and international entrepreneurs. This forum allows local and regional entrepreneurs and decision-makers to interact and forge alliances based on their strengths and weaknesses. In some cases, entrepreneurs may opt to form mergers if this proves beneficial to concerned parties.
- TEF Alumni Network
This network is made up of all the beneficiaries of the Tony Elumelu Foundation. Any entrepreneur who completes the 12-week training programme automatically joins the alumni. The network connects entrepreneurs both online and offline in a bid to promote sector-based and geography-based businesses and communities. This network also encourages healthy competition amongst entrepreneurs across the continent.
- Seed Capital
All entrepreneurs who are selected for the TEF Entrepreneurship Programme receive a non-refundable $5000 as seed capital. This support is meant to boost early growth and enhance the entrepreneur’s business operations. One of the reasons behind the failure of many startups is inadequate cash flow. This seed capital is crucial in making small businesses stay afloat and even expand.
TEF Mentorship Programme
TEF also seeks mentors to help educate and guide young entrepreneurs on business ethics and how to run a business successfully. The mentorship program is open to anyone with the skill and time to mentor at least four people. The mentor is linked to a mentee based on his field of expertise.
Every applicant goes through a vetting process, and when approved, should commit to a minimum of one hour a week for training and two hours a month post-training to provide further guidance to the mentee. The training is done online on a platform agreed upon between the mentor and mentee.
The post-training period is expected to last for at least 11 months, where milestone achievements will be measured to ensure the entrepreneur is ready to go out on his or her own. For one to be a mentor, one needs to have a passion for business, have substantial experience (at least five years) and expertise in his field. The mentor also has to commit a minimum of one year for training. He should also be ready to participate in monitoring and evaluation surveys.