Africa’s Transformation Requires Investment, Not Aid, Elumelu Tells UNGA Audience

 Tony Elumelu, Chairman of Heirs Holdings, has told global leaders that aid programmes alone cannot build sustainable industries in Africa, arguing that the continent’s economic transformation requires private capital deployed by investors with a strong understanding of local markets.

Elumelu made the remarks while speaking at the Darryl G. Behrman Lecture on Africa Policy during the United Nations General Assembly in New York, where discussions focused on Africa’s role in the global economy, entrepreneurship, private-sector development, energy security and the future of US-Africa relations. The session was moderated by Michael Froman, President of the Council on Foreign Relations.

According to Elumelu, aid can provide immediate and temporary relief, but it cannot create sustainable industries or serve as a substitute for domestic capital that is actively invested in African economies.

He said the bigger challenge was the way Africa is perceived internationally, particularly by investors who continue to view the continent through a single risk lens.

Elumelu argued that treating Africa as one high-risk market fails to recognise the economic differences among its 54 countries, each with distinct markets, opportunities and investment conditions.

He maintained that international investors could unlock significant returns by partnering with credible African businesses and operators who possess a detailed understanding of their respective local markets.

The Heirs Holdings chairman called on foreign venture capital firms, pension funds and development finance institutions to establish stronger partnerships with African financial institutions, particularly in financing infrastructure projects and trade corridors capable of connecting markets across the continent.

Elumelu also identified youth entrepreneurship as an important pillar of Africa’s economic and continental security, arguing that creating opportunities for young people could help address some of the pressures driving irregular migration and social instability.

He pointed to the work of the Tony Elumelu Foundation, which has committed $100 million to supporting young African entrepreneurs through funding and capacity-building initiatives.

Under the foundation’s programme, young entrepreneurs receive $5,000 in non-refundable seed capital alongside business training, with the aim of helping them establish and grow businesses in both rural and urban communities.

Elumelu urged philanthropic organisations, multilateral agencies and major corporations to support efforts to scale up such businesses, particularly those being built by young entrepreneurs across Africa.

On energy, Elumelu argued that Africa’s industrial and digital ambitions would remain difficult to achieve without reliable access to electricity. He said more than 600 million Africans still lack access to electricity, making energy infrastructure a critical part of the continent’s development challenge.

He advocated a pragmatic approach to the energy transition, arguing that African countries should be able to use their natural gas resources as a transition fuel to power industries and stabilise electricity grids while continuing to develop renewable energy infrastructure.

Turning to international trade, Elumelu expressed support for the African Growth and Opportunity Act while calling for greater attention to the actual cost of producing African goods and getting them to American markets.

He argued that future trade arrangements should take into account the expenses African manufacturers face throughout the production and delivery process, rather than focusing solely on market access.

As the African Continental Free Trade Area continues to develop, Elumelu said bilateral and international trade arrangements should place greater emphasis on supply-chain integration, strengthening domestic manufacturing capacity and removing regulatory barriers that make trade between African countries more difficult.

Elumelu's broader argument was that Africa's economic development should be driven increasingly by investment, entrepreneurship, trade and private-sector activity rather than continued dependence on aid.

He said stronger economic prosperity on the continent would have implications beyond Africa, arguing that economic insecurity and poverty can create wider challenges for global peace and security.

His closing argument for why the international community should pay greater attention to Africa was direct: "Poverty anywhere remains a direct threat to economic peace and security everywhere."

Elumelu’s message to global leaders was therefore a call for a fundamental change in how Africa is approached economically: rather than viewing the continent primarily through the lens of aid and development assistance, he urged investors and international institutions to recognise its markets, businesses and industries as opportunities for private capital.