By Babajide Komolafe

Chairman Heirs Holding, Mr Tony Elumelu has called for a new approach to the development of the African continent, stressing that charity and aid have failed Africa and its leading entrepreneurs are now driving the continent’s development agenda.

He made this call last week at the African Development Bank’s (AfDB) Annual Board of Governors meeting held in Marrakech, Morocco. The speech was followed by a panel discussion moderated by the BBC presenter Zeinab Badawi with Ronald Lauder, founder of the Ronald S. Lauder Foundation.

Elumelu challenged the audience to consider a new approach to Africa’s development – one that involved the private sector and was capable of kick-starting the economic ecosystem that underpins all sustainable development.  He called this new approach Africapitalism, an economic philosophy which asserts that the private sector can solve Africa’s most pressing challenges through long term investments that create economic prosperity and social wealth.

Speaking on the failure of traditional development interventions which have previously characterized development in Africa, Elumelu called for the private sector to take on the responsibility of development using his personal experience at the United Bank for Africa (UBA).

He made a compelling case for Africapitalism by telling the story of how a USD5 million investment in UBA 17 years ago spawned a multinational, pan-African financial institution that has created 25,000 jobs, generated wealth in communities all across Africa, expanded finance for trade, created stronger financial infrastructure for investment and economic growth, paid taxes to national and local governments to support public services, and given millions of customers control over their financial lives.

He compared that investment to the annual flow of charitable aid into Africa – many times the USD5 million investment that started UBA – to show that private sector involvement was a far superior, more effective way of dealing with Africa’s development challenges.  Elumelu’s investment company Heirs Holdings’ recent USD300 million investment in a power plant in Nigeria was another example of a long-term, profit driven investment that would bring development to Africa.