By Chike Anikwe
Group Company Secretary/Legal Counsel, Heirs Holdings
Africa is rich in natural resources, holding a huge proportion of the world’s natural resources; 65% of the world’s arable land and one-third of all the world’s minerals. In most African countries, natural capital accounts for between 30% and 50% of total wealth. Africa’s role in these sectors is to collectively pull together and harness its vast natural resources for the greater prosperity of the continent.
Africans have a vested interest in the future of the Continent, it is therefore important for Africans to be at the forefront to ensure that these resources yield economic dividends by contributing to inclusive growth and sustainable development of our continent. As we work towards a prosperous future, African countries must champion their own phase of industrialisation to transit from mere suppliers of raw materials for industrialised countries to become manufacturers.
Africa’s Role in Trade and Investment
Africa’s role in the world economy, to a very great extent, derives from its economic importance to the rest of the world in international trade and as a destination for international investment. Africa does not trade significantly with the rest of the world, only representing 3% of global trade, with the US-Africa trade accounting for less than 2% of the United States’ global trade in 2021. What is traded are low-value commodities – where value is added elsewhere.
Case Study: Ghana/ Côte d’Ivoire Cocoa Dispute with Global Multinationals
Ghana/ Côte d’Ivoire had a price dispute with the World Cocoa Foundation representing over 80% of global chocolate multinational corporations that were exploiting their cocoa farmers and keeping them in poverty. Both countries hold two-thirds of the world’s cocoa production, but their farmers only earn less than 6% of the over €100bn generated from the production of chocolate. In partnership, both Côte d’Ivoire and Ghana have decided to correct the market failures to reflect the true price of their product.
Regional cooperation can increase intra-regional trade and Africa’s GDP thereby accelerating African economic growth by projecting the economic importance of Africa in the global economy.
Leveraging AfCFTA to Create Economic Prosperity
The African Continental Free Trade Area (AfCFTA) presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day. AfCFTA connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at $3.4 trillion.
However, reasons/barriers for the low intra-African trade include inadequate trade-related infrastructure (roads, ports, etc.) lack of financial access and payment structure.
Africapitalism
The Chairman of Heirs Holdings, Tony O. Elumelu, has emphasised often collaboration and integration for increasing trade and investment opportunities across the African continent. Sustained investments by the private sector in the right infrastructure can lead to and catalyse economic transformation across the continent.
The private sector has the capacity to and must embrace its role in the development of the African continent through long-term investments to create economic prosperity. This economic philosophy is what we at the Heirs Holdings Group call Africapitalism.
Undoubtedly, power is one of the most critical sectors in Africa. Africa needs to position itself to attract long-term viable investments in this sector.
Investment in Power Infrastructure
Africa cannot develop without access to electricity. There is a strong nexus between lack of electricity access and poverty. Over 60% of our 1.3 billion people have poor access to electricity. Africa needs sustainable access to power because power changes lives – it lights schools, hospitals, and businesses. The continent requires deep investment to power itself out of poverty. Nigeria alone needs about 100,000MW of generated electricity daily, and it is currently producing only 1/20th of this need.
This is why at the World Government Summit in 2021, the Heirs Holdings Chairman, Tony O. Elumelu, advocated that the US-Africa partnership places its focus on electricity empowerment in Africa, and for the United States to renew its commitment to the US Power Africa initiative launched in 2014 by the Obama administration.
Key Strategic Economic Sectors of Heirs Holdings Group
The Heirs Holdings (HH) Group is a proprietary investment company holding investments in strategic economic sectors. It operates in six key strategic economic sectors: Financial Services, Energy (Oil & Gas + Power), Healthcare, Real Estate, and Hospitality.
Transcorp, an investee company of Heirs Holdings is a diversified conglomerate; the largest producer of power in Nigeria and majority shareholder in one of the most successful hotel chains in Africa, Transcorp Hotels, the owners of the award-winning Transcorp Hilton Hotel Abuja. Through Transcorp Power, the Transcorp Group is a significant player in the power sector in Nigeria, owning 2 power plants that have a combined generating capacity of 2,000 megawatts – delivering about half of the electricity in the entire nation, Africa’s largest economy.
Heirs Holdings has implemented a groupwide sustainability framework through which it exemplifies its belief in doing well and doing good, which is emblematic of Africapitalism; with pillars in health, education, and the environment. The Group is also proud to be associated with the Tony Elumelu Foundation (TEF), which in line with Tony O. Elumelu’s $100m commitment to empowering 10,000 African entrepreneurs within a 10-year period, has trained 1.5 million entrepreneurs across Africa through the TEF Connect platform, and has funded over 18,000 businesses and business ideas to the tune of $5,000 each. These all contribute to the achievement of the UN Sustainable Development Goals (SDGs), pushing Africa forward in that regard.
Conclusion
Africa, inclusive of its national governments, private sector, and population, has a crucial role to play in achieving a sustainable future for itself. The Continent has immense potential for sustainable development, but it also faces significant challenges that need to be addressed.
Promoting economic prosperity through trade structures and energy investments, are key challenges that need to be addressed. This will require strong political leadership, effective governance, partnerships, and education and awareness-raising campaigns.
awareness-raising campaigns.