First, let take on Tony Elumelu Foundation and UNICEF Generation Unlimited (GenU), aimed at empowering the young youths in the Sahel. Could you throw more light?
At the Tony Elumelu Foundation, the leading philanthropy empowering thousands of young Africans from all 54 African countries, we are immensely pleased to be co-implementers and grassroots galvanisers for this critical Gen-U Sahel Programme. Through our TEFConnect.com platform, we have trained 1.5million young Africans across the continent. Through our annual TEF Entrepreneurship Programme which provides $5000 non-refundable seed capital, business management training and mentorship for young entrepreneurs to scale their enterprises, we have funded 10,898 entrepreneurs across Africa.These young African entrepreneurs have gone on to create over 400,000 direct and indirect jobs across Africa. In 2019, we partnered with the United Nations Development Programme (UNDP) to identify, train, mentor and fund 2,100 young entrepreneurs in the Sahel region – Northern Nigeria, Burkina Faso, Mali, Niger, Chad, Cameroon, and Mauritania.
Again in 2020, we partnered with UNDP to fund and train 1,860 young Malians who face the triple threat of conflict, insecurity, and poverty, as well as loss of livelihoods from climate change. Through our intervention, we were able to create small businesses, and generate economic hope in the youth, channeling their creativity and skills to transform the Sahel region. More than 2 million people in this region have been forced to flee their homes, with millions more losing their sources of livelihoods. Resources are scarce, and opportunities are limited, leading to even more tensions and conflict between communities in the Sahel. A collective effort is needed to find a lasting solution to this intractable crisis. Empowering and investing in our people – especially our young ones in the Sahel – to give them economic hope and opportunity is THE only solution. As I have always said, poverty anywhere is a threat to us all everywhere.
I understand that your foundation practices ‘catalytic philanthropy’? What do you mean by this?
You can practise more traditional forms of charity but, while it addresses immediate needs, it does nothing to break the cycle of poverty. So we feel that we should help to catalyse African societies through interventions like impact investing and support for entrepreneurship. Then we can use our political capital to help make sure the right policies are put in place to help small farmers or small fishermen to grow to national or continental scale. This is why we say our philanthropy engagement is catalytic. It is not just about donating money – it’s about leveraging all the tools at our disposal to create impact for our beneficiaries.
Let go down the lane of history, in 2010, you left your position as GMD and CEO of United Bank for Africa (UBA) and you plunged into serial entrepreneurship. Today you run Hairs Holding, you run Transcorp, you are into oil and gas, you have the Tony Elumulu Foundation, you are into philanthropy, you are everywhere. Now, how do you manage to juggles all these and what are the challenges you have faced in terms of managing your entrepreneurship strategies and outreaches.
Thanks for the opportunity of being here today and let me start by commending and congratulating you, this is awesome, you guys are well done. When we speak about entrepreneurship it is about what we do. In 2010 when I left UBA as the CEO, I founded Heirs Holdings, is a family investment company that invests in key sectors of the African economy. We basically are driven by our philosophy of Africapitalism – we want to see the private sector play its role in the economic development of our continent. Today, when we started, the ambition was to invest in and help to improve lives and transform our continent. And we thought that the way to do this is by investing in critical sector of the economy, such as power, access to electricity. We believe it’s critical for the economy uplifting and of our people, we believe it’s critical for the development of our country. We also decided to make sure we have an integrated energy plan, not just power, but we make sure the gas is stocked, to make sure it helps the power to operate. That is why we are also interested in the oil and gas. Of course that is just to make sure the ecosystem is complete and we can actually help to power our country out of poverty into economic prosperity.
We also believe hospitality is critical for attracting investment into our country and continent and hence the acquisition of Transcorp Hilton Hotel in Abuja. And today we are doing a lot. I hope we have time to talk about some of these in that space. In the area of health care, we are doing quite a lot to help improve the human capital of our country, because we have seen with the pandemic that health is wealth. We talking about the challenges and how we are able to jungle all of these; as I have always said, investment and success in private sector, to a large extent, depends on leadership, surrounding itself with capable hands, hands that are even more intelligent than the leadership. So in our group we have quite a lot and it seems to people that it is stressful, yes it’s tough, but I am blessed with capable hands. If you look at Transcorp we have a there a competent leadership both the CEO of Transcorp Owen Diana Omogiafo and the other CEOs that work with her, Dupe Olusola, Vincent who runs power plant, Chris who also run our second power plant, these are very capable people. They help to fire our group.
If we look at the area of healthcare, Dr. Elumelu, my wife, she runs our Avon Medical business and Simbo Ukiri runs the Avon HMO business. These are great leaders who help to make this entrepreneurship journey not as difficult as it would have been. In the Heirs Holdings we talk about the guru himself, Emmanuel Norauh, who daily makes sure that the engine is running. My job today is more of thinking, more of seating for board sessions with them, providing some level of strategic direction, but allowing them to do what they know how to do best. The challenge we face, is basically the challenge with every enterprise, you do have the economy, how do you manage the micro issues, how do you manage the social economy issues. But basically, we are happy with what we are doing and the Tony Elumelu Foundation we are also happy that we are able to impact lives, and help transform continent through economic empowerment of our young ones.
I want to go back to 2010, when you were forced to step-down as the GMD and CEO of UBA, at the age of 47 with so much to still offer to the bank. Would you now say that when we look back at the trajectory that you had that the then Governor of Central Bank, Sanusi Lamido did you a huge favour?
I will tell you the story. It is part of what people don’t know. In 2010, we had banks’ committee meeting, at the end of the banks committee meeting that day he said, CEOs who has done 10years would step aside. That day I called our chairman to explain to him what happened and the next day we conveyed an emergency board meeting. At the board meeting, it was a divided house so to say; for the first time, some directors think we should go to court to contest it, just one or two did not think we should do that. So I spoke and told the board members that there are five critical stakeholders here, they are the customers of UBA, would they like to know that we took our regulator to court, they said no; that the staff of UBA, would they be comfortable working with a bank that sent its regulator to the court, they said no; the thirty constituent is the shareholders in UBA, would they be comfortable to know that we took our regulator to court, they said no; I said the regulator themselves will fight to win. So they won’t like it. Four constituents would not like us going to court. There is only one constituent that may like it and that is Tony Elumelu. So, I said, this stakeholder is one over five, is 20 percent, is not enough to go to court with the regulator, and by the way, 10 years is actually not bad, and I have been planning to move on, I was planning to leave at 50. What happened, a kind of, fast-tracked the time I planned to move on. So that was what happened, and that is why within 24 hours we appointed a successor, because we have a strong United Bank of African, the pipeline for succession is always there, we can always find two, three, four, five persons who can step in at any time. That was what happened. Looking back to today, first I said, I planned to leave at 50, they fast-tracked it, I left at 47. Is it good it happened? Yes. Am happy. When I look back today we have done quite a lot, it’s has always being about impacting in humanity, always being about improving lives, always being able transform everything we do. In business we are known as turnaround experts, because we take businesses, we transform businesses; in philanthropy, we are trying to cater for lives, to help create new hope for African leaders, it all about transforming our society, it all about make sure we leave the society better than we met it, and to me that opportunity to step-down three years ahead of the planned time, it a blessing from God.
I think, save for UBA, in all your business interests, there is unwritten role, which is, leaders and managers don’t stay too long, two, three years, you move them, you reshuffles them. Even when they retire you push them up to board level in all your companies. Is that a management style to retain them and take control to keep them on their toes?
I don’t know the reference that you are making. I just want to say that in the 21st century, that is not the way to lead, you don’t jungle to show you are in charge, but we believe strongly that business leaders should be agile, and execute our strategy, only the paranoid don’t survive. In this business, in the private world, you need to make sure you balance the consistency between the internal world and external world. You need to make sure that your strategies are been executed as planned, and for us what we do in our group, we have different CEOs in companies within our group; we believe in longevity and time for people to settle in. We don’t change our CEOs. But, me coming back as chairman of UBA there was cooling off period, I served my cooling off period and at the end of it, I came back as chairman of UBA. We believe strongly that business leaders should be agile, should do their job very well, and help to execute our strategies. I will say that we do have a crop of young talented leaders and personally I am impressed with the way they go about their work and accomplishing corporate objectives. At UBA, Heirs Holding, Transcorp, Tony Elumelu Foundation, these guys are doing well. You asked me early on how am able to deal with all of these responsibilities, the reason we are able to cope is became we have the right pegs in the right hopes; people who are strong and who are helping to executive all the responsibilities and they take the pressure off me.
Let talk about Transcorp. Transcorp is into hospitality, power, oil and gas and various sectors of the economy. What is your stake in the power sector in Nigeria today, because you play in that sector too. What do you think need to be done to make power more efficient, more effective, particularly in the terms of service delivery?
The power sectors have three parts: the generation, the transmission and the distribution. Transcorp Power Limited (TPL) and TransAfam Power Ltd: today in Nigeria we own the highest generating capacity in the country to generate 2000mw of electricity a day but unfortunately we do less than 500mw at this point in time. The major constraint in this area is gas; you have the issue of transmission and evacuation of the generated electricity and also there is also the issue of payment. For these to work well, for us to be able to generate more, we need to have gas. That is why our group invested in oil and gas. Investing in oil and gas for us as a group is not necessarily for oil, it is more because of gas, we want to be able assure, control our destiny, to have oil and gas production, to convert it to electricity. To the acquisition we made recently, I am happy to say is it already supplying gas to our Trans Afam Power Plant. But going back to the other elements, the issue of transmission, we need to make sure we stabilize our transmission lines so that they can take up. This country needs at least 100,000 megawatts of electricity par day for us to power the economy but today we operate less than 500 megawatts. We need to do more; stabilize our transmission. Another critical part is payment: the distribution, metering and payment and co. Here I must commend the Central Bank, Godwin Emefele, he has done very well because he came into the dark end to help generate and increase revenue in that space. Let me tell, up till end of last year, the end-bets used to pay about less than 20% of power supplied but today it improved up to 50%. Transcorp Power alone is owed up to 100 billion naira but its gradually improving. So for the power sector in Nigeria to work well and it must work well if we must have to drive the economy; we need to increase generation, make sure there is gas supply to generating companies; we need to make sure the transmission lines are capacitized to evacuate the power; we need to also make sure that power generated is taken by DisCos; the metering, the end users pay. So that if I generate electricity I should be able to get paid so that I can generate more and service my obligations, as well as make sure that the spares in particular are serviced, the machines’ equipment are serviced when expected and new ones are acquired to make the generating plants running. These are the things we need to do.. And how do I access the journey so far: I think it is still a critical sector, we need to invest more in the sector and the stakeholders need to make sure that it works, because if it works, the country’s economy development becomes more real, if it doesn’t work it remain a problem.
I, through the Tony Elumelu Foundation, we support young entrepreneurs and if you ask them ‘what are the challenges you face in this country’? They tell you is the poor access to electricity. And so any amount you give, some of them will not succeed because they spend so much on electricity. Even in hospitality business, even in healthcare, even school education, every sector of our economy, we need to fix the power sector. I think we need to privatize it more. I must commend efforts been made now to privatize the remaining ones. The transmission line we need to fix, we need to improve the payment system.
If I may ask a follow up question, do you think the Nigeria government should hands off transmission. Are you going to make a bid for the GenCos that Government is proposing to privatize: Omotosho, Genegu, Olorunsogo and so on.
I think I know somebody who is going for Genegu already… my friend is going for Genegu. (Laughter…)
Which one are you going for?
I think we will be interested in one of the hydros. In the area of transmission line, I think ultimately it should be privatized. In fact what some of us have advocated is that the GenCos and DisCos, the entire power stakeholders should come together and have deal with Federal Government, take over the transmission line. And it is in our self-interest to make sure that it works. If you have the transmission line and it doesn’t works and you are generating, there is no way you will evacuate your power. So that sector is critical and pivotal for the survival of our power sector; is it critical for improving the access of electricity. Where it is now, no problem. What is important for us, as operators is let have expanded capacity. Am sure if you talk to people in the transmission business, they will also give you reasons why they have constraint that exist today. But to us we want to see massive improvement, we need to capacitize that space. I think Ericson deal as am told, is to make that happen. Details of that, I don’t know, but am told is to help capacitize transmission line.
Do you subscribe to the un-bundling of the Transmission Company of Nigeria for efficiency in the power sector?
Yes. That is what I just said here. First I don’t know much and I don’t like to be a professional in the area I don’t know. But I know the transmission sector is in the power equation …in power industry we need to improve capacity in that area. And whatever we need to do to make that happened, we should do so. Time is now, because we are all suffering this. Many times, we run into difficulties: we generate power and it is not taken; the power plants can just break down, all of these frustrations, we don’t need in the power sector. Whatever it takes to fix that sector, we should do. But like I said earlier, some of us in the power generating space have signified interest to be involved in the transmission end, so that collectively we should be able to make it work. Even when that works we need to make sure that the last man, the people pay. we metre, they should pay; also the distribution companies should always take what is supplied them, they take it and they should pay so that GenCos will be paid. Each of the three critical parts must work well: the generating companies must generate; the transmission companies must transmit; the distribution companies must make sure it gets to the end users. That is actually when the people will begin to feel the impacts of electricity.
Let we take a detour to your hospitality business. We were told in the past you will be building a five star hotel in Ikoyi, and till now nothing has become of it. Is it still in the pipeline?
Yes. It is in the pipeline. We had issue with certain government authorization that slowed things down. We have done the piling and everything; we are in a good place now. The hospitality business, I must command our leadership in that space. It is about having good people work with you. They are doing quite a lot – they are being very innovative, very creative, thinking about so many things. So, soon, watch that space, I believe, before the end of this year, you will see something spectacular. They are coming up with certain plants. The hotel is about medium to long-term plan but on the short-term, they want to do certain things. So watch that space. I think before the end of this year you will see some commercial activities going on there.
Let talk about Afriland Properties Limited, one of the businesses you have interest in. Old Falomo complex, the Lagos State government under Governor Fashola did give you approval for the redesigning it into state-of-the-arts shopping mall but was revoked by Governor Ambode. What is the state with the project now?
The Falomo Shopping Complex, we were extremely excited, we wanted to put up something magnificent because for most of us who grew up in Lagos, Falomo is a kind of the heart of Lagos. We ran into difficulty with government Ambode. We went to court, but there is a limit to how you can litigate on these things. But, where we are now is very commendable. Recently, I had a meeting on this and am happy to say that the government, the company, the investors, we have all finally coming together. We want to start it again. But this time we are thinking of putting up office complex, hotel and small mall in the place because there is so much concern about traffic congestion there. We have finally come to terms under the new leadership in Lagos State. …it is quite interesting. We started with Fashola’s regime and Ambode’s regime truncated it, and now the new government of Governor Sanwo-Olu is again reviving it. So, we are happy we are there now. Unfortunately, it will cost more to do now compare to what it would have cost us. If you look at the exchange rates then and today, it will cost us almost three times. It’s totally different. Save for the setbacks, by now it would have been all up. It will cost more now. That is why we are changing the whole concepts, but we want to do something very iconic in that place, that you will be proud of what you see there at the end of the day.
Earlier on, you talked about Afam Power Plant. You said it has the capacity to supply up to 2000mw but that has not happened. The Afam GenCos which is in Oyigbo Rivers State, we understand it cost over 100 billion naira, but Transcorp has not yet completed payment for both plants. When is this expected to happen?
First, the Trans-national Corporation of Nigeria (Transcorp) has two companies in the power sector: the Transcorp Power and TransAfam Power Plant, they are all limited companies. So Transcorp Power owns the Ughelli Power Plant, the entire capacity of Ughelli Power Plant is 980 – 990mw of electricity. We own that 100 per cent. The second plant is the TransAfam Power Plant. I thought I should clarify it properly. The TransAfam Power Plant Limited is a 300 million dollars acquisition. Our deal with the Federal Government is …the plant has not been completed. GE is handling the fast power, they intended and promised to complete it this year. The Federal Government believes in what we have done at the Ughelli Power Plant. When we took over the Ughelli Power Plant, it was generation 150mw of electricity per day; we took its daily generation to 750mw and in record time the Federal Government was very impressed by us. By the way, that was under President Goodluck Jonathan regime. And now under President Buhari regime, we did the TranAfam Power Plant. So the current government impressed with our track record with the Ughelli Power Plant allowed us to invest there. The understanding is that the GE will complete it. But pending that, we wanted to take over the plant and they said, okay, pay 25 percent, take over the plant, and supervise the completion of that installation which is ongoing now. Again thanks to the Federal Government, thanks to the Minister of Finance and thanks to the governor of Central Bank of Nigeria. …they are making the payment so that GE will complete the project. When GE completes it, we make the final payment. So that TransAfam is also 980 – 990mw, the two combined will gives us the 2000 generating capacity that I spoke about. So that is the fact. But I think is all about comfort with us. We have track records of turning around businesses. In this case, in generating power, having seen what we did at the Ughelli, moving it from 150mw to over 750mw per day the federal government is comfortable with us. Nigeria needs electricity, we don’t have enough and I think government is doing the right thing, encouraging people with track records and the capacity to help improve electricity to do so. We want to do that and want to do more in the country in that space. With our gas supply now to the power plant, I think we are just starting.
Let talk about your oil and gas interest. Earlier this year, Heirs Holding acquired Acquires 45% of Oil Mining Lease (OML) 17 from Shell, Total and ENI. Does that gives Hairs Holding operative share, or does that going to be handled by the Nigeria Petroleum Development Company.
Again the acquisition of investment in oil and gas by Heirs Oil and Gas is one that speaks to our overall energy strategy. Our energy strategy is integrated, is to make sure that we help the last man, the last person, the ordinary Nigerian citizens and by extension African citizens to have improved access to electricity. We acquired the OML 17 from the international oil companies you mentioned. We made a case to the NNPC which justified that we have the capacity and capability to operate the asset and they gave us the approval to operate. So am happy to say it is truly indigenous oil and Gas Company, owned by Nigerians and operated also by Nigerians. Between when we took over and now there is an improvement; today we produce about 31,000 barrels of oil per day which is a slight improvement from what it turns up to. I think we are just starting. Actually, as the CEO, our ambition is to produce over 100,000 barrels of oil per day. The asset in the past has produced close to that. So, we want to do what we know how to do: extracting values for our stakeholders. We will do it there. We are happy to have the responsibility to operate this asset. We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled. As a Nigerian and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.
Heirs Holdings has created one of Africa’s largest, indigenous owned, oil and gas businesses, and led by a board and management team with significant regional and global experience in production, exploration, and value creation in the resources sector.
There are concerned expressed by market observers that those acquisitions were funded by UBA. Is that true? What is UBA’s exposure to your company by way of insider lending?
Let me start with the oil and gas acquisition, UBA did not participate in the funding. It’s a club of international and local lenders. The fact for people to know is; the local receiving bank of our proceeds is Union Bank of Nigeria while international receiving bank of our oil sales is the Standard Chartered Bank London. Heirs Holdings was advised by Standard Chartered Plc, as Global Coordinator, and United Capital Plc, with a syndicate of lending institutions including Afreximbank, ABSA, Africa Finance Corporation, Union Bank of Nigeria, Hybrid Capital, and global asset management firm. The deal also involves Schlumberger as a technical partner, as well as the trading arm of Shell as an off-taker. These are the consortium of global and regional banks and investors. We are mindful of all these things; we are very prudent in making sure we did not put pressure on the bank. We go out to seek funds to support our operations, we also put in equity invest. But when we need to get founding we try not put pressure on the bank.
What is UBA’s exposure by way of insider lending to your company?
I just explained to you about the question you asked. In other business like Transcorp Power, UBA participated in the syndication that was done for the Transcorp Power acquisition – UBA, AFC, FCMB, Fidelity and two other banks. This is not a forum to tell you their level of exposures, but what is important is that it is within the single obligate limit that we should exposure to a company. Any that by the way, it is performing very very, very, well.
Let me ask you a follow up question. There was this issue between First Bank Nigeria Ltd, FBN Holdings Plc and Central Bank over insider lending and manipulation. Don’t you think that the issues should have been handled differently? Do you think that FBN and FBNholdings should have adopted a different approach? What do you think should be done to stop this perceived rots in the banking sector?
I think you need to understand my stand on this your question. I am a chairman of competing institution, United Bank of Africa. It will not be prudent for me express judgment or comment on this, because it may not be very professional of me. I am a chairman of a bank and it not healthy for me to talk about another competing institution. I leave that to those who are not so involved to comment on that. But I think, basically I know both the shareholders of banks, I also know the regulators and regulator’s mindset …the regulators want a sound and safe banking environment and I believe the shareholders also want that. And in due course, I believe that they will be able to resolve the issues. The regulators want to see a sound and safe banking environment and people involved, the First bank, I believe also upholds the tenacity of the best corporate governance.
You don’t want to offend anybody?
No. not about offending anybody, I don’t think it is professional because is like me making a judgment on another bank because we are competitors. If I were not like a Chairman of a Bank, I can comment. But what is important is best bank practice, sound corporate governance; survival of the Nigeria’s banking system. I must say, that the sector has done very well. For instance, United Bank for Africa operates in 20 African countries. United Bank for Africa is the only African bank that operates in United States of America; the only African bank that is a deposit taking licensed bank in the US, and a member of the Federal Reserved Clearing System, as a result of which, UBA is the only sub-Saharan African bank with the unique ability to clear and settle US Dollar denominated payments without use of an intermediary bank. We are also in the UK. The toughest regulatory environment in the world is the US. I will say that UBA, a Nigerian bank with Nigeria heritage and background operating in the toughest environment in the world, gets a two rating, two rating is 80 percent in the US, is something that give pride to Nigeria and Nigerian regulator in particular that an offshoot of Nigeria a banking system is doing well there. In the UK and of course across all African, you see standard. As a matter of facts, our regulators have change totally. I commend all the stakeholders, because it not all about the regulators, even those who are regulated; it’s a two way thing to create this kind of environment. So am sure this will also be resolved.
Your businesses must have suffered setback due to the Covid-19 pandemic and the challenging microeconomic that we have right now. How have you deal with these challenges and how would you want government to approach to ensuring other businesses survive and job created?
First, for us, is been tough. The first time I saw the CEO of UBA, since March last year was on the 6th of April – the AGM day; that was the first time since 2020 March. We had meeting together in March 2020, we didn’t see each other until this April because of Covid-19. Things have changed. We never anticipated this. I tell you a story. At Heirs Holdings, we had a meeting at January last year. At the meeting, HR organization came and was presenting the new work module and he said we need to consider off-sight working arrangement; we should consider maybe in a week, people should take one week off and work from homes. When they were presenting it, I said: “can you guys stop, don’t get too excited. How can people work offline? You have to come to work by 8am and close in the evening.” (Laughter) …. that was January last year. Now, fast-track or fast forwarded to March, the pandemic started. You just heard me say, the CEO of UBA, I saw him last year – March last year and April this year. And of cause how do we work today? Offline! Things have change. The world has moved. The digital evolution that occurred is so fast. Now, how do we survive this? To us, we have come to realize further that people are indeed critical, and if you understand that your human capital are the best, then their health become very important and how they work and everything. We have seen the hazard this pandemic have caused; it’s a health issues. We are trying to make sure that we embrace the new world. It is not been easy. In fact, I want to use this opportunity commended our staff, in fact, workers generally. I posted, I tweeted, I did a blog, some days ago just to commemorate the workers day. Honestly, I said workers in and anywhere, I commended them and doffed my hat, because it’s been a tough and rigged environment. If you look at banking sector for instance and some other essential areas, people have to work. You know, it’s like putting your life at stake. If you look at the power generating business, for us also, you have to generate power electricity; Nigeria can’t be in the dark. If you look at health workers, they have to go out and make sure they support others. So, is been very difficult and challenging. So, May 1, this year is very symbolic for me, it cannot just pass without saluting the courage, the perseverance and sufferings of our people, not just people working in our group, but workers everywhere especially in Nigeria.
Now talking about what Government can do. I think, for me, there is so much to be done. The government is trying but there is still room for more to be done. The whole philosophy of Africapitalism is just: “don’t look up to government only for solution to all these issues’. Those of us in the private sector, what can we do to also augment or support the government so that we have the right environment for everyone.
In Nigeria a blend of corporations, philanthropists and donors put together the CACOVID (Coalition Against COVID-19), a Private Sector task force in partnership with the Federal Government, the Nigeria Centre for Disease Control. The Founders of CACOVID are Central Bank Governor, Aliko Dangote; Segun Agbaje (Guaranty Trust Bank); Jim Ovia (Zenith Bank); Herbert Wigwe (Access Bank); Tony Elumelu (United Bank for Africa); Abdulsamad Rabiu of BUA Group; Folorunsho Alakija of Famfa Oil Limited; Oba Otudeko (First Bank); Femi Otedola of Amperion Power; Mike Adenuga of Globacom and few others, came together to support the country through various means, putting money on the table to make sure we survive this period and also advising the government, on economy policies and programs that should be deployed to manage the country. You know, people see today that Nigeria opened up. People can travel and come into the country, but they don’t know what happened, the process …a lot happened from behind scene. We ever spent money, we engaged government. This has to happen because of the benefit. Money was spent and technology deployed. I know that IT teams at UBA, Zenith, Guarantee Trust and Access bank, there was a time they didn’t sleep, they were working round the clock to put us a platform that would help manage movement in and out of country by the people; to enable the opening up. A lot is still going on. All the stakeholders are trying to have a role to play to make sure things get better.
I still want to talk out your philanthropy, afroptimism, Africapitalism, and the central bank policies. You would have noticed a new trend, lot of multinationals are going to Ghana, yet the market they target is Nigeria because of the adjacency of Nigeria and Ghana. As the master of Africapitalism, how can you sale Nigeria to the world. What do think Nigeria can offer bearing in mind that the easy of doing business in Nigeria is very tough one?
The point you make is a valid point, the one that keep some of us up at night. My heart bleeds when you see such conglomerates moving their investments or headquarter from Nigeria to Ghana. Nigeria is a market, is a huge market. Honestly, the macroeconomic environment was beginning to improve. The concern most of them have is the security challenging we have in the country. But for us in the private sector, the best way we can sell our country when we go out is through the investment we make. When I go out, I hear people say ‘in Nigeria things are bad,’ I say to them ‘the grass is half-full, there is nowhere else you get the return of investment as what you get in Nigeria’. I speak as an investor in Nigeria, investor in Africa and as an investor in other part of the world. I just told you about our investment in the U.S.A and the U.K. and France. But the truth is, we just need to be totally aware of the trend of people movement out of the country or relocate to tangential economy, smaller economy. I know that the Minister of Trade and Investment, Otunba Niyi Adebayo, when I talked with him, he told me the plans his Ministry has; what they are doing to improve the economy. The Vice President, Professor Yemi Osinbajo has been driving the easy of doing business in the country. I know the Fiancé Minister has been encouraging investors. The Central Bank Governor has been encouraging investors also. We just need to keep doing all of that. All of us need to keep working together. For us in the private sector, when we invest in Nigeria, it’s signals; it tells our friends outside the country that for us, we are not stupid; we are making great economic decision and investment decision. When we invest in Nigeria it shows that there are opportunities in Nigeria. We just attracted 1.1 billion dollars investment. You asked me a question about the funding and I told you it is only two Nigeria banks that shouldered the funding and that are Fidelity and Union Banks. The bulk of that money came from outside the country. That is the kind of signaling, the confident boosting measures we all need to take. But ultimately ease of doing business most improves for the country to attract and retain investment in Nigeria. Global Capital Market is looking for investment destination; they will go to where they are must welcome, and the aspiration of all of us is to make sure that Nigeria is seen as that place where private capital should settle and all of must play our own role in making this a reality.
What is Africapitalism and how does it work?
From interacting with customers, with communities, with local governments, state governments and national governments, I started to see a pattern that indeed we can as a private sector help to develop Africa in a manner that’s truly sustainable. I also, as a good student of economic history, have observed the development of the African continent and come to realize that despite all the aid inflows into Africa and despite our sovereign government commitment to develop in the continent, not much was achieved. But … if we can mobilize the African private sector and non-African private sector operating in Africa to think long-term, to invest long-term in Africa in key sectors, then we might end up creating economic wealth, economic prosperity and social wealth. That is Africapitalism.
Which areas does the private sector in Africa focus on?
The private sector in Africa was largely dependent on government patronage, government contracts. But today, it has changed significantly. You have the private sector in Africa today that is adding real value to the economy through engagements in payment systems; through engagement in key infrastructure projects; through engagement in manufacturing and processing of raw materials in Africa and exporting this within the continent.So it’s a significant shift from where the private sector was before to where it is today and we’re beginning to see a new crop of private sector people in Africa who believe under the sun that they have a role to play in the development of the continent.
Why did Heirs Holding decided to commit $2.5 billion to the “Power Africa” initiative?
Because we understand as Africapitalists the importance of power, access to electricity, in unleashing the economic potential of Africa. Because of that, we felt since we preach that the private sector should do long-term investment in Africa in key sectors, there is no sector at this point in time to us that is as strategic as power sector in dealing with the issue of economic empowerment, democratization of economic prosperity across the continent than power.
Looking ahead, what do you think is going to be the most important source of power?
Africa is coming from a deficit position — only 20% of 1.2 billion people have access to electricity. So we need to think of the kind of projects that will help us create the quantum leap we need in power. And I think that that is what should guide the options that we take. So for me, I believe that we need five years of sustained, massive billion dollar investments (in the) power sector in Africa before we come to the level where we need to discriminate, is it this kind of power or that type of power? But let there be light first in Africa.
At the age of 20, did you envisage your current self?
At the age of 20 I was still on the university campus thinking of parties and academic course work rather than thinking of entrepreneurship! But let’s just say that my life has been filled with a lot of interesting experiences. Deciding to study economics at university is all about learning about the business world. Growing up around my parents and the other influences around us, I always felt that I would end up in the business world – what we call entrepreneurship today. My mother was a big influence. She owned a restaurant and during the holidays I would stay there and help. I used to think, imagine if she did this at a larger scale, she could get more customers and make more profits, so in essence I was becoming more aware of how the world of commerce worked. But these were not overriding thoughts at the time. At that age, my aim was to finish my first degree in economics, do my masters and work in a bank. I wanted to dress like the power dressers in the banking sector – wear suspenders, brogue shoes, the whole outfit. I liked the lifestyle! In Nigeria, before you start work, you are required to join the National Youth Service Corps (NYSC). I was posted to the country’s northern region where I found myself reading a weekly magazine column which explored business ideas such as bakeries or fish ponds. I started wondering how much setting up a bakery or any other enterprise would cost, how to manage it, how to make a profit and so on. I vaguely thought that perhaps one day, I would like to start a business myself. So, although I was more focussed on becoming a banker and wearing my suspenders, my mind was subconsciously shaping and crystallising ideas that eventually led to where we are today.
What would you say were the essentials you needed on your entrepreneurial journey? What inspired you?
To begin with, the road to success is not linear, it is up and down. You have to be very determined and be prepared to do whatever is required for your success. And you have to know what success looks like in your chosen field. For example, you know that if you want to go to university, you must first get the required grades from secondary school and to do that, you have to make sacrifices and work very hard. For that you need ironclad discipline. It is the same if you want to succeed in business. That kind of discipline and training helps a great deal. If you want to become an entrepreneur, you have to acknowledge that it is not a bed of roses. Ask yourself what does it take to succeed? And what I tell people is that you must have laser focus, be disciplined, realise that sacrifices need to be made and I repeat, be prepared to work very hard. Of course you must have ambition. You must seek out opportunities and have a platform on which to start implementing your vision. You should think long term, 10 years ahead, not just for tomorrow. Once you have accepted this, you can say, let’s give it a go, let’s try it but make sure you stick to the principles I mentioned. Successful entrepreneurs have these principles ingrained in them. They expect challenges because overcoming challenges provides opportunities.
Can you recall your very first entrepreneurial venture?
Yes I do. I did my NYSC stint in Sokoto, Northern Nigeria. They make very good ‘Babaringa’ which is a three-piece local costume that is very popular throughout the country. I used to buy these alongside local hand-made mats and sell them to friends in the other end of the country, in the South. I made a little money from this which was very welcome as we were on a small stipend. It was exciting to see these little savings accumulate in my bank account. Later in life, I became interested in real estate and property and that helped in building capital. I also started assessing opportunities in other parts of the world. My inspiration came from reading the US Fortune magazine and finding out what was happening in corporate America. It was interesting to see how business decisions were made. I studied market trends and prepared myself for something similar happening in our part of the world. Today, when I discuss with my daughter, I tell her that knowing economic history, business history is very important. It also helps to build self-confidence.
What sort of entrepreneurship should young people aim for?
Different people will have different views on entrepreneurship at different levels. Some leave school and immediately want to go into the food business – they see that there are food supply shortages while there is a lot of arable land in Africa. Some want to go into the technology sector. Some, like me, start mid-way in our careers and some start much later. But what is important is recognising opportunities when they come up and preparing yourself to take advantage of the opportunities – and making sure you achieve meaningful success. Opportunities don’t come twice. If you miss it the first time, you might have missed it forever. At the Tony Elumelu Foundation, we train and provide seed capital to young Africans. To date about 10,000 young Africans have been funded from our programme with over 1 million young Africans being supported on TEFConnect.com My advice to budding young entrepreneurs when I interact with them is to be hardworking, don’t be scared to dream but know that dreaming is less than 1%; the 99% is about translating your dream into action, translating your dream to reality. That is what makes the difference. Also, I cannot repeat this often enough: that process of translating to action requires a lot of hard work, discipline, staying focused and making sacrifices for a better tomorrow. The Tony Elumelu you see today has not always had everything. In the past, for example, I have decided not to buy a car and planned instead to use the money to make investments and wait for the proceeds of that investment to help me buy the car, and that happened! When I say sacrifices, I mean you have to learn to defer consumption. You need to think long term. It is when you visualise success that you can make the sacrifices, then you can apply the rigour and energy that will lead you to success.I think those are the values we need in our young ones and that we foster at the Tony Elumelu Foundation today. You can get there by taking that first step, the journey of one mile starts with one step. So start, count the steps consistently, and stay focused.
Would you say that there are more opportunities now compared to when you started?
Opportunities in my view point are always there, but now it seems to me that we have more opportunities in the world around us than ever before. The digital world is a whole new economy that never existed when we started – and entry to that digital world is not so difficult. Use your brain, your discipline, your expertise and then the world just comes to you. Having said that, I must recognise the fact that while you have a lot of opportunities, you are often in an operating environment that is tough. That is why at the Tony Elumelu Foundation, beyond providing seed capital to young entrepreneurs we spend a lot of time on advocacy. We must create the enabling environment that will assist and enable our young ones to succeed in their entrepreneurial drive. We must realise if our young men and women, succeed, our continent succeeds. That must be in the subconscious of everyone – from business leaders to policy makers. We owe these young ones the right environment to succeed and to give them inspiration, to support them.
At the Tony Elumelu Foundation we provide $5,000 non-refundable seed capital every year to thousands of young Africans from across all 54 African countries. We have also scaled our programme to reach even more young entrepreneurs in conjunction with our global partners. We do this not because we have so much money, but because we think about helping to democratise wealth and helping to democratise success – and making sure that we have more people on our continent succeeding. Young people need mentorship, they need inspiration, they need motivation, they need capital. They need us to help them create opportunities for them. We created the TEFConnect platform at the Tony Elumelu Foundation to help connect over one million young African entrepreneurs so they can trade with one another, so they can transact and even know what others around the continent have to offer. We believe that our young ones should have a networking platform to enable them to succeed.
We believe that our young ones need good transportation systems, we believe that our young ones need improved access to electricity. We believe that our young ones need fair and favourable tax policies and we believe they need good security to help them succeed. These are the things that if we put in place, will enable them to succeed. This is the difference between young entrepreneurs in Africa and young entrepreneurs in other parts of the world. In 2018, when I hosted French President Macron in Lagos at a convening of over 2000 entrepreneurs, someone asked a question that if Steve Jobs were African, would he have succeeded? Well, it’s a tough question that our leaders and all of us should keep asking ourselves. What are we doing to identify and project our own young African Steve Jobs?
What major opportunity do you think Covid-19 has presented to the entrepreneur ecosystem in Africa?
It’s actually a mixed one. On one hand I see a lot of opportunities as a result of the pandemic. New businesses, new business opportunities, new and more intelligent ways of doing things. For example, before Covid, you would have had to get a visa to fly to Nigeria to have this interview, we took for granted that systems like zoom existed, we didn’t know that it would be so smooth. However, there has been a devastating impact on many African MSMEs. We have seen first-hand at the Tony Elumelu Foundation how resilient the young entrepreneurs we have supported through the Tony Elumelu Foundation Entrepreneurship Programme have been, performing better on average in terms of profitability and survivability, post pandemic. They have combined the mentorship, business training, market access, funding and other holistic support received from the Foundation, to navigate these setbacks in very interesting ways.
It is a mixed feeling but I think we should be more optimistic – which is what entrepreneurship is all about, more forward looking entrepreneurship and knowing that business is not just about today, it’s about today and tomorrow. We should count our losses and keep the spirit up. I do think that the way we handle things in the world has changed completely and with that change comes a new world of opportunities. We should sit down and get thinking, can this idea work, might it work, what do I need to do?
Last year during The TEF Entrepreneurship Programme selection, we want to see more ideas of what people can do arising from this pandemic. In the health sector for instance, a whole lot of new opportunities have come along – things we didn’t prioritise, things we didn’t take seriously. We know now they are much more important than they were before. I tell young Africans that we can choose to sit down and just weep and complain but we can also say in spite of these challenges, what can we do? That is why as business leaders, we must keep asking if we’re doing enough in capacity building, in hand-holding and inspiring and encouraging our young ones because, ultimately, we must be ready to pass the baton onto them and soon.
For young entrepreneurs who had their business collapse during this pandemic, what must they do to get back on track?
Personally, my rise in the business world has been through business turnaround and it starts from understanding the business itself. What is the business? What are the critical success factors for this business? What are we doing right? What are we not doing correctly? What are the external impacts on the business? And is there any way we can reposition in view of the new normal? My advice to young entrepreneurs is take a step back, understand your business, looks at the forces, the factors that shape your business and dispassionately reassess and see what you need to do differently. Quitting is not something I advise people to do but please don’t make a sentimental or emotional decision. Think it through very well; if you have mentors, sit with them. Also, the new world we live in is a world of information and knowledge – with just at a click of your device, you can have access to so many things in terms of knowledge. Find out what’s happening but please be dispassionate in your business decisions. A lot of businesses fail because people are not being dispassionate when they make business decisions.
What single, most important message do you do have for policy makers when discussing entrepreneurship in Africa?
I have many but one we should focus on, improving access to electricity in Africa. Improving access to electricity in Africa will unlock the wealth of this continent; but lack of access to electricity is holding us back.
Who are the people you admire the most?
I can think of four people, two of the people have passed away. One is Steve Jobs and the other is Michael Jackson. With Steve Jobs, can you just imagine a man founded a business and after his death, the business he founded became the first company to cross a trillion dollar market cap! I think the key aspirations for every business in the world, should be building a business that lasts and not be one you live and die with. I believe that when you are gone, the business should still be there and grow better, that is what Steve Jobs did. Steve Jobs has changed the world through his wonderful devices. Long after his death, the company he founded was the first to cross a trillion. I like that guy because in addition to all the other aspects, the discipline he showed and everything he has achieved in the short period he was on earth.
The second person is Michael Jackson, we all saw him as an entertainer but watch his movie, This is it, that came out just after he passed. He was going to go on a world tour before he died and to see how he was preparing, practicing twice a day, up to three times a day and everything was important. He was just the epitome of excellence and execution. Michael Jackson was talented, but he also worked hard, he refined himself, he was extremely disciplined. He was focused and he made sacrifices. Those are the things I like in leaders. In terms of living people, I would have to say Bill Gates as he has done so well, his acumen as a businessman but also as a tremendous thinker, and I like Jack Ma, both men have done very well.
If money was no object, what is the one industry you would build and why?
If money was not the purpose and I have as highly talented staff, what would I like to build? For me what Africa needs today is better access to electricity; I would like to support any initiative and technology that can help that happen. I would like to see investment that would help to keep our society clean because that would make us a healthy society and most importantly anything that would create jobs for our young men and women. Anything that would help create a more inclusive society through commercial engagement, anything that would help prioritise our women, bring our women more into the economy I would make that investment I would like to pursue that.
What are your goals for the future?
My goals for the future are twofold — one is personal and two is about the continent. For my personal goal I would like to continue to impact my team. Because you get to a certain level where you wake up in the morning not necessarily because you want to earn a living — you wake up in the morning I think about impact, about legacies, what impact am I going to leave behind? And so I decide to look at the African continent and I tell myself this is a continent that is about to explode but lacks certain vital ingredients. And so what role can I play in making sure that some of those challenges are addressed in my lifetime, so that my children will not as a kind of question I asked of my parents and grandparents, where were they when the war started? So that’s important to me. And that is why we invest in power. Not just because I want to make more money, which is good, but because we touch lives significantly making that money.