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African philanthropists push for prosperity

Note to editor:  All hands seem to be getting on deck to accelerate Africa’s development. Africa Renewal’s Kingsley Ighobor writes that some of the continent’s richest individuals are now taking their philanthropic activities to new levels.

By Kingsley Ighobor

New York, December 13, 2013 (SSNA) -- Last July, US President Barack Obama set the spark for his Power Africa programme that will help sub-Saharan African countries build power production and transmission projects and double their electricity access. President Obama announced in Cape Town, South Africa, his plan to mobilize $16 billion for investments that will generate 10,000 megawatts of electricity. With Nigerian billionaire and philanthropist Tony Elumelu pledging $2.5 billion towards that amount, it appears that Obama’s turn towards Africa is energizing the continent’s new philanthropic elites who can play a critical role in social enterprise, build capacity and pilot new technologies.

Before accompanying President Obama to tour the Ubongo power plant, near Dar es Salaam, Tanzania, Mr. Elumelu had also joined Judith Rodin, president of the Rockefeller Foundation, a US charity, to announce the establishment of the Impact Economy Investment Fund that will provide start-up capital for young entrepreneurs for jobs-creating projects. Like Mr. Elumelu, other top African philanthropists also appear to be changing tactics, focusing on investments in areas likely to accelerate Africa’s prosperity in addition to their interventions in humanitarian crises such as floods.

At a roundtable discussion last October at the UN headquarters in New York—one of the side events during the UN General Assembly debate—Mr. Elumelu, who is chairman of Heirs Holdings, an investment firm; South Africa’s Precious Moloi-Motsepe, the co-founder of the Motsepe Foundation; the Sudanese mobile communications entrepreneur and billionaire, Mo Ibrahim; Toyin Saraki, founder and president of Wellbeing Foundation Africa, a charity devoted mainly to children’s and women’s affairs, discussed philanthropy in Africa and the role of the private sector. Mr. Elumelu urged African philanthropists to focus on socioeconomic development and making people self-reliant.


A $6.3 million donation last year to flood victims in Nigeria established Mr. Elumelu as one of Africa’s top philanthropists. According to Forbes, a US business magazine, other pacesetters include Africa’s richest man, Nigeria’s Aliko Dangote, whose charitable contributions totaled $35 million last year, Mr. Ibrahim, Zimbabwe’s Strive Masiyiwa, Kenya’s Naushad Merali, and Mrs. Moloi-Motsepe who was named Africa’s most influential woman by Forbes in 2012.

In the manner of billionaire Warren Buffet, who gave away a substantial chunk of his fortune to charity in 2006, South Africa’s Francois van Niekerk transferred 70% of his equity in Mertech Group, a company he founded, to the Mergon Foundation, a charity he now manages. The stake is valued at $170 million.

Even as an increasing number of wealthy Africans raise their philanthropic profiles, many believe there’s still much more to be done. “There are about 150 private jets in Nigeria, and there are only about four registered philanthropies” in that country, states Wiebe Boer, a former Rockefeller Foundation staffer now managing the Tony Elumelu Foundation, which provides financial and policy support to African businesses. “If we could get every one of those guys who owns a private jet to create a philanthropy, I think we could have a terrific transformation in that country.”

Philanthropy’s cultural context

Those skeptics who see few practitioners of philanthropy on the continent misunderstand the cultural context, argue Halima Mohamed and Bhekinkosi Moyo in their article in Alliance magazine, a leading publication on philanthropy. The emphasis on formal philanthropic institutions “is far from what philanthropy in Africa actually is—where giving emerges across socioeconomic classes; through individual and communal channels (formal and informal), often not involving money,” the writers maintain. In explaining Africa’s peculiar climate of philanthropy at the UN discussion round table, Ms. Moloi-Motsepe gave the example of ubuntu, a South African concept meaning “I am because you are: my success is intricately linked to yours.” The ubuntu concept is a family value that encourages giving back to society, she said.

Africans have a culture of giving and mutual support even if only a few formal charitable organizations exist, declared Toyin Saraki, founder and president of Wellbeing Foundation Africa, a charity devoted mainly to children’s and women’s affairs. At the UN event, Ms. Saraki reinforced the point that Africans have a culture of giving and mutual support even if only a few formal charitable organizations exist. Citing a study by Adams Bodomo, a Ghanaian academic, the BBC reported last April that Africans in the diaspora remitted $51.8 billion in 2010 compared to $43 billion from traditional Western aid donors. Therefore, the anecdote of four philanthropic institutions in a country with 150 private jets fails to tell the full story.

With most philanthropic activities neither documented nor promoted in Africa, organizations like African Grantmakers Network have stepped in to facilitate experience sharing among philanthropists and to promote their activities. Along this line, Mr. Dangote recently pledged to enhance the public information aspect of his philanthropic work.

Mr. Elumelu’s model, which emphasizes investments in sectors that promote development such as the pharmaceutical and startup sectors, is an example of the link between business and charity. Stressing the need for investments in critical development sectors, he highlighted the billions of dollars his company was going to invest in sub-Saharan Africa’s ailing power sector. Former Ghanaian president John Kufuor took issue, pointing out that philanthropy involves giving without expecting something in return. Investments and philanthropy are not the same thing, he said, and Africa needs the former more than the latter.

A case for “strategic philanthropy”

While Ms. Saraki and Mr. Elumelu shared their views on how business can support socioeconomic development at the U.N. Roundtable, at other forums they have termed their approach strategic philanthropy, meaning solving problems at their source. For example, they believe that by providing education to women, philanthropists can help women avoid many reproductive health problems.

Africa’s poverty, exacerbated by a decline in official development aid, brings strategic philanthropy into sharper focus. The UK government’s assistance to South Africa, worth about $64 million in 2003 and down to about $30 million this year, will cease by 2015. The US-based Center for International Grantmaking reported that there had been a 4% decline in international giving by American foundations in 2010 following the 2009 global economic downturn. As a result, many foundations were unable to continue their work in Africa, creating an urgent opportunity for the continent’s philanthropists.

African philanthropists are conscious of thinning aid. Meanwhile, at a private sector forum on Africa (another UN side event during the General Assembly debate), Sudanese telecom billionaire Ibrahim took the position that taxes on multinationals, not gifts or aid, would be more than sufficient to address poverty on the continent. Africa loses between $30 billion and $40 billion annually due to tax evasion, he told the audience, which included representatives of top foreign businesses operating in Africa. “Just pay your taxes,” he beseeched the business leaders. “We don’t need your aid.”

Rising concerns

On the flip side, there are concerns about the illusory nature of many of Africa’s charitable works, which can appear more like public relations gimmicks than sincere efforts to alleviate problems. “The use of philanthropy to offset exploitative business practices” should be discouraged, maintain Mr. Moyo and Ms. Mohamed in their Alliance magazine article. “If a resource-based corporation has made its profits from a land where people have been dispossessed of their land rights and then engages in philanthropic activity, serious questions need to be asked.”

Launched in April this year, the African Philanthropy Forum (APF) has a peer-review component that will likely address those concerns. An affiliate of the Global Philanthropy Forum (GPF), the APF was founded to promote strategic philanthropy in Africa. In announcing the APF’s launch, Jane Wales, president and CEO of the GPF, said that even as poverty persists in Africa, there are generous African men and women, “many at the height of their careers,” who are eager and “determined to change this reality and ensure that the benefits of economic opportunity are more evenly shared.” Ms. Wales may have had in mind Africa’s 55 billionaires, who were touted by the Nigeria-based financial magazine Ventures as having a combined wealth of $145 billion.

Meeting the challenge

Before the APF’s launch, individuals such as Mr. Ibrahim were already implementing activities that promoted economic growth and responsible political leadership. In 2007 the Mo Ibrahim Foundation began awarding annual prizes to African leaders who, while in power, developed their countries, lifted people out of poverty, paved the way for sustainable and equitable prosperity and did not attempt to bend existing laws to extend their term. Winners receive $5 million over 10 years, $200,000 per year for life and another $200,000 for a charity of their choice. Previous winners include former presidents Joaquim Chissano of Mozambique and Festus Mogae of Botswana but there has been no winner since 2011.

Uganda’s Ashish Thakkar spent $1 million last year through his Mara Foundation to “make wealth through capacity building, mentoring and peer networking”. The foundation provides financing for start-up businesses or already existing business with high risk but high growth potential, renovate dozens of Ugandan high schools, provide scholarships to destitute East African students and offer free training to startup entrepreneurs. 

The APF must now take African philanthropy to a higher level. Capturing the mood at the private sector forum on Africa, UN Secretary-General Ban Ki-moon said, “Africa can and will determine its own fate.” With leadership from the current crop of indigenous wealthy financiers, the small but growing number of African philanthropists may be ready for this task. Africa Renewal

Kenya pushes technology into overdrive

By: Africa Renewal

April 22, 2013 (SSNA) -- The country that gave the world two groundbreaking innovations in technology: M-Pesa, a mobile banking system, and Ushahidi, a platform for crowdsourcing information during disasters, is now taking its technological talents to new heights. The East African nation of Kenya has just started construction on a 5,000-acres piece of land in Konza, about 60km south of Nairobi, to turn the savannah area into “the most modern city in Africa”. 

Using the same company that designed Brooklyn’s Barclays Center in New York City, SHoP Architects, Kenyan authorities want to transform Nairobi’s Konza City into Africa’s technology hub, dubbed Silicon Savannah, similar to California’s Silicon Valley. The designers told the UK’s Financial Times that “the scale of the project compares with creating another Manhattan, central London or inner-city Beijing.”

The Konza techno city project is the brainchild of Bitange Ndemo, Kenya’s permanent secretary in the ministry of information and communications. “Rather than echo a smattering of tech parks and business centres starting up on the continent,” says theFinancial Times, “Kenya envisions a broader city-from-scratch to bring research universities, industry and government together, along the lines of Silicon Valley”.

The Wired magazine reported that Konza’s development “plan is extremely ambitious” and is “not just seen as a way of attracting investment from international tech companies and inspiring domestic entrepreneurs, but also as a way of reducing the corruption that has been endemic in the nation for several decades.”

Konza is expected to cement Kenya’s role as a regional technology leader in Africa. With a well developed technology sector, Kenya became the first country in Africa to open its government to the public by making millions of pages of internal governments documents available online. The country’s M-Pesa cell phone banking service is now being used all over the world for purchases and money transfers, and according to the US Time magazine, Ushahidi has been used “in 128 countries to map everything from [the 2010] earthquake in Haiti to [the] Japanese tsunami and the Arab Spring.”

The unveiling of the Konza project is being seen as a natural progression of Kenya’s aspirations to attract corporate investments in technology. In 2012, IBM set up its first African research lab in Nairobi, joining renowned American companies like Google, Microsoft and Intel that have their regional headquarters Kenya. Konza is heavily-influenced by similar “new cities”, like Cyberjaya in Malaysia, Cyber City in Mauritius and Egypt’s Smart Village, says the Wired.

The project is expected to cost $10 billion and create more than 200,000 jobs when completed in 2030. There are plans for an electronic manufacturing plant, an international financial centre and a convention centre. The government is offering tax breaks to companies as an incentive to move and invest in Konza. 

Amid the euphoria and excitement over the prospects for Silicon Savannah, there have been some voices of caution. Technology experts at the Mobile Web East Africa conference held in Nairobi in February warned Kenya’s technology industry against copying the Silicon Valley business model. Their concern was that most of the companies being formed in Kenya were based on a single app or software programme. 

“Kenya should be more of a ‘Digital Savannah’ and not ‘Silicon Savannah’, says TMS “Teddy” Ruge, co-founder of Project Diaspora USA/Uganda, an organization that mobilizes resources from Africans in diaspora to invest in Africa, “We are yet to manufacture things here, and most of the companies we have here are based on digital solutions.” 

Kenya’s reputation as a technology leader in Africa suffered an embarrassing setback during the March national elections when both a biometric ID system designed to avoid multiple voting and an electronic transmission system to speed up vote counting broke down. The country’s independent electoral body was forced to switch to counting votes manually, slowing down the process and causing national anxiety. 

Notwithstanding, Konza appears to be proving skeptics wrong. So far, more than a dozen companies are expected to start setting up operations in Konza. 

“Konza will become a game-changer in Kenya’s socio-economic development, spurring massive trade and investment across the entire region,” said President Mwai Kibaki at the groundbreaking ceremony held in January at the proposed new city.

Africa Renewal:

Africa’s natural resources must benefit the African people

Note to editor: In May 2012, Maged Abdelaziz was appointed as the UN’s new special adviser on Africa, at the level of under-secretary-general to advocate for African development internationally and help coordinate the efforts of UN agencies and departments in support of the New Partnership for Africa’s Development (NEPAD), the African Union’s continental plan for political, economic and social advancement. Mr. Abdelaziz was Egypt’s permanent representative to the UN in New York for the seven years just prior to his most recent appointment, and in that capacity served as vice-president of the UN General Assembly and the Economic and Social Council, among other duties. He shared some of his thoughts with Africa Renewal’s Managing Editor Ernest Harsch and staff writer Kingsley Ighobor.

Interview with Maged Abdelaziz, UN special adviser on Africa

New York, January 25, 2013 (SSNA) -- Africa Renewal What are some of the greatest challenges in trying to get the international community to deal with Africa on its own terms, according to the continent’s own priorities?

Maged Abdelaziz We are seeing the remnants of the economic and financial crisis and its impact on development activities. As NEPAD is built not on aid but on partnership between Africa and the donor communities, African countries would expect more investment, more industrialization and thus more employment, more social integration and more social and economic coherence. But unfortunately, there is a lack of funds on this front and a decline in the percentage of aid.

A lot of commitments have been made. But there is lack of implementation. If you take it back to the 2005 Alberta summit [of the Group of Eight industrialized countries], up to now only 25 per cent of the G-8 Action Plan on Africa has been implemented. Of $65 billion that was going to be used for investment in Africa [annually], only about $23 billion has been delivered.

How to deal with these challenges is to try to integrate Africa’s priorities, as defined in the thematic areas of NEPAD, into the economic and social and security priorities of the United Nations. The chance for that is coming, because we are starting to shape the post-2015 development agenda [2015 being the end of the target period for the Millennium Development Goals]. And we played a significant role as OSAA in supporting African negotiators in Rio [at the UN Conference on Sustainable Development] to try to achieve the maximum of what they could achieve out of the unified African position.

AR  NEPAD’s focus is not just on aid, but also investment and trade. Yet the decline in aid, in the wake of the financial crisis in the US and Europe, has nevertheless been a blow. In that situation, what can African countries do to better mobilize their own resources, and to better manage what they have by combating corruption and stemming the flow of African funds abroad?

MA  Well, in order for Africa to use its money better, it should have the money first. The concentration, as you say, of NEPAD is not on aid. It is on trade, investment and industrialization. And through these we can have better employment, better health care, better services and other things. Mobilizing resources from within African countries has been one of the major targets of the African Union, which has established a high-level panel on the mobilization of resources in African countries.

You need good governance at the same time. There are some African countries that have 5 per cent or 6 per cent or even 8 per cent growth. But this growth does not trickle down to the population, and the people who are below the poverty line are increasing more and more. So if you look at it from up there, you see that a country may be growing, doing among the best economic performance, but if you look at how this is affecting the socio-economic structure of the country, it comes at the level of certain people and stops there.

This happened in my country, in Egypt, where we had about 5 per cent or 6 per cent growth a year. But those who benefited were only the businesspeople who controlled the economy at the top. At the same time, we had 40 per cent of the people below the poverty line. Governance should be strengthened to ensure that everybody benefits from the economic gains that are coming.

And corruption. There is a high-level panel established by the African Union on combating corruption and ensuring that there are no kickbacks and no funds that should be going outside of the country. But that also requires some commitment at the international level, from the big economic powers. Because most of those moneys that are being smuggled out of African countries are going to bigger economies, they are not going to smaller economies.

Also to assist African countries, control over natural resources is very important. Most African countries export natural resources as raw material, and then re-import them at five or six times the price. If we can use natural resources for the benefit of Africa — that multiplying the price six times is for the benefit of the African people — then we will be doing better in African resource mobilization.

AR  You’ve alluded to the Arab Spring and the tensions that can be caused by poverty amid high economic growth rates. The other side of the Arab Spring was dissatisfaction with the lack of political inclusion, limits to democracy and political repression. Do you think the events in the north of the continent have been a wake-up call to the remaining authoritarian regimes in sub-Saharan Africa?

MA  It is definitely a wake-up call to everybody. Not only for the autocrats in Africa. It is a wake-up call for all autocratic regimes. There is a political aspect to it and there is an economic aspect. The political aspect is that if you stay in power for a long time, there could be a negative impact. The economic part is that as long as people are not happy economically, they are going to revolt. And if you combine both together, then you have big revolutions, as you had in North Africa. Yes, it is a wake-up call.

Africa Renewal:

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