Hear from Mr Elumelu:
This week world leaders from the public and private sectors, civil society, and academia, will convene at Davos to discuss the “new global context”—the theme of the World Economic Forum’s 2015 annual meeting. In this new context, the WEF fears that profound transformations (social, economic, political and technological) are hastening the end of “economic integration and international partnership.”
Indeed, the Davos agenda sounds like a daunting catch-all of global crises, from unemployment and income inequality, to global monetary policy, to clashing values systems, to sustainability and management of the world’s common resources. The WEF argues these and other pressures are deepening social and geopolitical fault lines around the world. Given recent headlines one can hardly disagree— the terror attacks in France and northern Nigeria; a major cyber attack attributed to North Korea; the bombing of an NAACP office in the U.S.; and the rise of extremist political parties in Europe; to name just a few. The fault lines are very real, and increasingly dangerous.
There is no doubt that we must accept the premise that this “new context” creates new challenges, but we must also recognise that the world, and the African continent in particular, is not short of solutions that can be used to address them.
I believe that these solutions must have four primary goals: First, must be sustainability, or we risk returning to Davos years and even decades from now, bedevilled by the same challenges and threats. Second, no solution will be sustainable if it is not inclusive. Our political, social, environmental and economic solutions must create value for all stakeholders—because fault lines are exacerbated when broad value creation is not driving the agenda. Third, sustainable solutions are integrated: the issues cited by the WEF cannot be treated in isolation from each other. They are, in fact, all interrelated and interdependent. Finally, we must have the disciplined focus to deliver a simple framework that is designed to prioritise the potential for implementation. The WEF agenda is so broad as to almost defy redress. Focusing on three key linchpin issues—unemployment, entrepreneurship, and resource management—will ease collaboration and lead us to an actionable programme and improved outcomes across a broad spectrum of issues.
In Africa we are developing and applying these solutions in a programme we call Africapitalism. Nowhere in the world do we stand to lose and gain more from the disruptive forces facing us than here. That’s why we are taking action that focuses on delivering true tangible outcomes within these specific focus areas, and seeking to deliver local value creation and social wealth.
We are going far beyond the established norm of working hand in hand with policymakers, legislators and NGOs to craft policies that expand entrepreneurship and trade—we are intervening directly. Whether through our US$100 million programme to identify, train, mentor and fund 1,000 entrepreneurs per year for the next decade, or our establishment of an index that will track the level of local value creation in African markets; we must go beyond the rhetoric to establish a clear and precise measure of our continent’s ability to retain value.
I would propose that we use these examples and others like them to build specific policy proposals in three key areas: entrepreneurship, trade, and resource management. Entrepreneurs, and the small- to medium-sized enterprises (SMEs) they run, are engines of employment and economic growth—much more so than large global institutions. We need direct policy, investment, educational and infrastructure support for the SME sector in both the developed and developing world. Such an effort would re-energise our economies from the bottom up while stimulating the creation of the jobs we must create in order to ensure sustainability.
In trade, rather than focusing merely on the largest of global business, we need to take advantage of all our new technological and communications tools to expand the trade possibilities for entrepreneurs of all sizes. For example, new regional commodities exchanges in Africa are opening new markets and stabilizing prices for smallholder farmers all over Africa. E-commerce and mobile based transactions are also linking African entrepreneurs to consumers in ways that were not previously possible. Further, trade policy should pay special attention to intra-regional trade, as this type of trade includes a much higher share of manufactured goods: another level of support for local entrepreneurs and wealth creation. Greater intra-regional trade by definition requires closer integration and cooperation, and, therefore, less conflict.
Finally, we need to develop some common principles to guide resource management, but from the perspective of the nation’s providing the resources. Can those who own the resources (mostly in emerging nations) get a fair share in the process? We must come away from Davos with at least the beginnings of some core principles that regulate natural resource exploitation but that also obligate some level of local value addition of natural resources. This is important not just to avoid disputes, resource grabs, and potentially even resource wars, but beyond this to ensure that the resource owners can achieve sustainable and inclusive development.
As an entrepreneur who has launched and grown several multi-national companies, I believe strongly in the power of the private sector to solve problems, and 2015 can be a pivotal year, for good or ill, depending on how bold and decisive we are. So, as we arrive at Davos, let us focus not just on “raising awareness” about problems. It is our responsibility to leverage this important event and come away from Davos with concrete solutions that can contribute towards pulling the world back from the brink, toward a new era of economic cooperation, integration and growth.
Tony Elumelu is a Nigerian economist, banker, investor, and philanthropist.
This article was originally published on the Financial Times Blog
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