In 2010, you left your position as the GMD/CEO of UBA and then ventured into serial entrepreneurship. Today, you run Heirs Holdings, Transcorp, you are into oil and gas, the Tony Elumelu Foundation (TEF) and many more. How do you manage to juggle all of these and what are the challenges you face in terms of managing all your businesses?
In 2010, when I left the United Bank for Africa (UBA), I founded Heirs Holdings which 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-based role in the economic development of our continent and that is why we founded Heirs Holdings. When we started, the ambition was to help to improve lives and transform the continent and we thought that the way to do this is by investing in critical sectors of the economy such as Power.
Access to electricity we believe, is very critical for the economic upliftment of our people and the development of our country. We also decided to make sure we have an integrated energy, not just power, but we had to make sure there is gas that helps the power to operate. That is why we are also investing in oil and gas. We also believe hospitality is critical for attracting investment into our country and the continent hence the acquisition of Transcorp Hilton hotel in Abuja and today, we are doing a lot. If you look at Transcorp, we have competent leadership. The challenge we face is basically the challenge as it is with any other enterprise, which is how to manage the macro and socio-economic issues. But basically, we are happy with what we are doing.
Taking it back to 2010 when you were forced to step down as MD/CEO of UBA at the age of 47, with so much to still offer the bank, would you look back and say – especially with the trajectory you have achieved – that the then governor of CBN, Lamido Sanusi, did you a huge favour?
I will tell you this story. That day, we had a bankers committee meeting and at the end of the meeting, the then CBN governor, Sanusi Lamido Sanusi, said the CEOs who had done 10 years would have to step aside. I immediately called the chairman of UBA to explain what happened, and the next day, we conveyed an emergency board meeting. At the board meeting, it was a divided household for the first time – some directors said no, we have to go to court to contest it, and about one or two other directors did not think so. But I spoke and I told the board members that there are five critical stakeholders: the customers of UBA, will they like to know that we took our regulator to court? No.
Then the staff of UBA, will they be comfortable working in a bank that took their regulator to court? No. Then the shareholders, and then the regulators themselves, they all wouldn’t like it. So, four constituents will not like us going to court, there is only one constituent that may like it and that’s Tony Elumelu, which makes it one over five. That’s 20 percent which is certainly not enough to go to court. And by the way, 10 years is not bad. Also, I had been planning to move on and leave at the age of 50; so what happened kind of fast-tracked this. It was also why within 24 hours; we appointed a successor. The pipeline for succession at UBA is always there, about one -five people are always there to step in. Looking back today, we’ve come a long way, and it’s always been about impacting humanity, improving lives and transforming everything we do. In business, we are known as turnaround experts, we take businesses and transform them. In philanthropy, we are also catalyzing the creation of a new crop of African leaders. It’s all about transforming our society and making sure we leave the society better than we met it. For me, that opportunity to start all these three years ahead of the planned time, is a blessing.
What’s your take on the power sector in Nigeria today, what do you think needs to be done to make it more efficient particularly in terms of service delivery?
In the power sector, there are three parts to it: the generation, the transmission and the distribution. Transcorp, through Transcorp Power and Trans-Afam Power as at today in Nigeria owns the highest generating capacity in the country. We have a generating capacity of about 2,000 Megawatts (MW) of electricity a day but unfortunately, we do less than 500 MW at this point in time. A major constraint in this area is gas, then there is the issue of transmission and evacuation of the generated electricity, and there is also the issue of payment.
For us to be able to generate more, we need to have gas, and this is why our group invested in oil and gas. Investing in oil and gas as a group isn’t necessarily because of oil, it is more because of gas. We want to be able to ensure that we have gas from our oil and gas production to convert it to electricity. With the acquisition we did recently, I’m happy to say it is already supplying gas to our Trans-Afam power plant; but we also need to make sure we stabilise our transmission lines. This country needs at least 100,000 MW of electricity a day to power the economy but today we operate less than 5,000. We need to do more. Some other critical parts are payments, distribution, and metering. I must commend the CBN Governor Godwin Emefiele.
He has done very well because he came in to help increase revenue in that space. Up until the end of last year, we used to get less than 20 per cent payment for power supplied, but today, it has improved to 50 percent. Transcorp Power alone is owed over N100 billion, but it’s gradually improving. For the power sector in Nigeria to work well – if we want to drive this economy – we need to increase generation, make sure we address gas supply to generating companies, we need to make sure the transmission lines are capacitised to evacuate the power, we need to also make sure that power generated is taken by DisCos and the metering should be right for the end users to pay.
If I generate electricity, I should be able to get money so that I can service my obligations as well as make sure that all the parts in particular are serviced to ensure the generating plants keep running. It is a critical sector, we need to invest in it, and the stakeholders need to make sure that it works. If it works, the country’s economic development becomes more real, if it doesn’t work, it’s going to be a problem. I, through the Tony Elumelu Foundation (TEF), empower young entrepreneurs and if you ask them what the challenges they face in this country are, they will tell you that it’s 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 the hospital business, healthcare, every sector in our economy, we need to fix the power sector. We need to prioritise it more, but I commend the efforts going on now as government has been making sure we privatise the remaining GenCos. But the transmission lines need to be fixed and the payment system needs to be improved.
What do you think of the Forex management situation in Nigeria and how the CBN is going about it? We have numerous FX windows, and people have asked for convergence of FX, so what will you like to see?
In 2018/19, there was a time when the Vice President convened a meeting of a few of us to express our opinion on the economic issues. I took a position there, people were in attendance, and I was quite critical of certain things at the time. It had to do with some things you mentioned. But today, as things improved, you must also be bold to commend and say when things are moving in the right direction. Today, things are moving in the right direction. I support convergence 100 per cent and I think we are there. On the issue on convertibility and other things, I think at times it’s easier to prescribe and when you are saddled on the seat, you see issues differently.
Let’s look at Nigeria, we generate foreign currency largely on oil. We used to produce about 2.5 million barrels of oil before, today I think we do about 1.4 million barrels of oil a day. That should have an impact on our foreign currency, it is not rocket science. Also, there was a time oil was $100 per barrel, it dropped to $40, and thankfully today it’s back to $69 per barrel. There’s a basket of so many things you have to watch as economic managers in making decisions, there’s a lot of pressure on our foreign currency. What people want to see from outside is a low exchange rate, but in the business world, people want predictability – that this will be available when I need it, and I think to a large extent, that’s happening in Nigeria.
But we need to do more, we need to improve our productive base as a country to make sure we diversify our foreign exchange earning sources as a country. We need to make sure that the ease of doing business and creating the right environment that will enable people, businesses and entrepreneurs to thrive, to succeed, we need to put that in place, so that collectively we can create prosperity. To ensure demand and supply. All these will help in what we have in the basket of our foreign exchange. So, convergence? Yes. Are we there now? I will say we need to fix the supply side.
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