Imagine, for a moment, that you are an African billionaire. It’s a nice thought – there’s the private jet, the fancy house, the good food and expensive drink. Life is good. But perhaps there comes a time when, surveying the under-development all around you, you think that you should use your money for a cause that is more noble than your own personal enrichment.

This is easier said than done. As has been demonstrated on this continent repeatedly, simply chucking money at a problem does not make it go away. It might sound counter-intuitive, but we can’t simply spend our way out of poverty. It’s not like there’s a magic solution to Africa’s problems that is just sitting there on the counter, waiting until someone can afford to buy it.

As international NGOs will tell you, as do-gooder celebrities will tell you (try Madonna for a start), as economists will tell you, fixing any one of Africa’s numerous, systemic, and entrenched economic and political problems can be a nightmare of failed initiatives and good ideas gone wrong (or bad ideas gone horribly wrong).

So, Mister African Billionaire, what’s your plan? (It’s nearly always a mister; last year was the first time any women made the Forbes Africa Rich List). How are you going to spend your money for the greater good?

Maybe you’ll follow the example of Sudanese telecoms entrepreneur Mo Ibrahim, who was among the first to recognise the potential for mobile phones in Africa. It was his vision that brought innovations such as prepaid airtime to the continent, and earned him a tidy sum in the process: somewhere between one and two billion dollars, according to Forbes estimates.

Cash in the bank, Ibrahim turned his attention to the problems of African governance, and how to improve it. Reasoning that good leadership starts from the very top, he created a foundation* which lauds and rewards African presidents who demonstrate excellence in office and leave it when they are supposed to. He also commissioned an annual database of governance statistics so that citizens have an impartial guide of how well their leaders measure up. More important than either of these initiatives, however, is the exhausting behind-the-scenes work that Ibrahim puts in, a never-ending roundabout of high-level meetings, dialogues and international conferences promoting governance issues.

Is it effective? Probably. However, by its nature, it is hard to judge such discrete diplomacy.

But perhaps you’re not looking for such a hands-on approach, and besides, few African billionaires have the humility to be much good at it. In which case, the footsteps of a certain Patrice Motsepe might be the ones to follow. With an estimated fortune of $2.9 billion, earned from the South African mining magnate’s substantial holdings in platinum, gold and other minerals, he’s Africa’s eight-richest man. Or he was, until he decided to give away half of it to charity.

“Precious (his wife) and I will contribute at least half of the funds generated by our family assets to the Motsepe Foundation to be used during our lifetime and beyond to improve the lifestyles and living conditions of the poor, disabled, unemployed, women, youth, workers and marginalised South Africans, Africans and people around the world,” said Motsepe in a “giving pledge” he made in January this year.

Motsepe, for his part, was inspired by American billionaires Warren Buffett and Bill Gates who have launched a high-profile campaign to get their rich friends more involved in philanthropy. Theirs is a distinctly bottom-up approach, trying to fix problems where they see them. The Gates Foundation, for example, has ploughed billions into schools, immunisation programs and research. This is more traditional NGO work, but the Gates Foundation has been criticised for ignoring wider issues in its rush to solve specific problems.

“Some argue that the founder’s background in technology means that he is too transfixed by the search for technological ‘magic bullets’ to fix health problems, when often the problems involved are social or developmental: persuading Nigerian clerics to let children have the polio vaccine, persuading South African men to protect themselves better against HIV by getting circumcised,” observed Gideon Rachman in the Financial Times. Motsepe’s foundation runs the same risk: it is plugging the hole in the dyke rather than fixing the leak.

There is another, more unorthodox option, as illustrated this week by Africa’s richest man, Aliko Dangote, who made most of his $16 billion fortune in the Nigerian cement industry. Like Motsepe, Dangote is also planning to part with half his fortune – but he’s not giving it away. Instead, he announced that he is funding the construction of an $8 billion dollar oil refinery in Nigeria. “This will really help not only Nigeria but sub-Saharan Africa. There has not been a new refinery for a long time in sub-Saharan Africa,” said Dangote. He’s right.

Africa is a continent of vast natural resources and an incredibly limited industrial capacity to process those resources. That’s why South Africa sells raw gold and platinum to the world and buys imported jewelry at a huge markup. That’s why Nigeria, the continent’s biggest oil producer, imports 80% of its petrol. That’s why the Democratic Republic of Congo doesn’t make its own mobile phones despite providing some of their most important ingredients (specifically coltan).

Dangote’s refinery should go some way towards fixing the Nigeria problem, at a stroke doubling the country’s refining capacity. The new refinery, scheduled for completion in 2016, will produce around 400,000 barrels a day, as compared to Nigeria’s current capacity of 445,000 which is rarely achieved thanks to mismanagement.

Dangote’s motivations are not philanthropic. He’s a businessman, and he thinks this is good business. But this kind of substantial investment in a crucial sector of Africa’s largest economy will have a knock-on effect on the rest of the country. And, hopefully, because the refinery will be managed privately and for profit there will be a large incentive to eliminate the kind of corruption, mismanagement and wasted opportunity which has for so long characterised Nigeria’s relationship with oil. Even better, all the money made stays in Africa – and is hopefully ploughed into more projects.

The project is, undoubtedly, a risk – which is why no one’s tried it before (also, few people have $8 billion lying around). But it’s the kind of risk that Africa’s businessmen need to take, and increasingly are taking, to kick-start their respective economies without reliance on foreign aid or investment. It’s what I’d do with my imagined billions. DM

CORRECTION: As some of our commenters noted, Patrice Motsepe did not actually pledge to give away half his fortune; instead, he pledged to “contribute at least half of the funds generated by our family assets”.

Read more:

• Dangote to build $8 billion refinery in Nigeria’s Leadership
• Gates, Buffett, can you hear me? Patrice Motsepe gives away half his fortune on Daily Maverick

Photo: Nigerian billionaire Aliko Dangote gestures during an interview with Reuters in his office in Lagos June 13, 2012. Dangote is targeting a market capitalisation of $35-40 billion for his cement company when he lists it in London next year, and the money will be used to pay off investors including himself, he told Reuters on Wednesday. Africa’s richest man with a cement empire stretching from Senegal to South Africa, Dangote said in an interview at his office in Lagos that Dangote Cement had raised its capacity target to 60 million tonnes a year by 2015 from a previous 50 million tonne target. REUTERS/Akintunde Akinleye