I AM a very family oriented guy. Of course, I have a very close knit nuclear family but I also regard friends and colleagues as part of my wider family. I am also a very loyal and committed person. I think these values stem from my Nigerian/African background – I was born/bred/taught entirely in Africa!
I am very proud of that fact. It demonstrates that it is still possible for people with humble backgrounds who work hard, dream big and have a desire for excellence to, with the help of God and a slice of luck, make it here in Africa. I have built my businesses in this country and on this continent.
What were your dreams and aspirations at youth?
That’s a good question. I think I always wanted to excel and I have always been interested in business.
I was also interested in the economy and what made economies of nations work. That interest informed my choice of study at university – I have, as you know, a first and a master’s degree in Economics. I was also very fortunate as my first place of work provided me with an opportunity to explore some of the notions and ideas I had read about in business magazines as a student.
That is very important I believe. Creating and giving young people a safe and conducive environment to explore, learn and grow is one of the things we are trying to replicate with the Tony Elumelu Entrepreneurship Programme – TEEP. Another key ingredient is mentorship. I had a great mentor who guided me and encouraged me to grow. Again, there is an element of that – mentoring – in TEEP. We basically want to create 10,000 more Tony Elumelus across Africa..
Is Nigeria better now than when you were growing up?
It is very different, that’s for sure. But the word “better”has a number of nuances. The period between 1970 and 1985 can be regarded as my formative years so if we are to draw comparisons one must look at Nigeria then and compare it to Nigeria today. In the early 1970s, Nigeria was emerging from a civil war and had just become a leading oil producing country at a time when oil was regarded as the new “gold”, following an abrupt four-fold increase in the price of the product. We were governed by a Military regime (up until 1979) and the economy was largely dominated by foreign business interests.
We also had a much smaller population. There seemed, prima facie, to be an abundance of opportunity and work. That is my recollection of that period at least until the first major oil shock in the early 1980s. The word “austerity” was introduced into our lexicon in 1983. Things changed thereafter but that period of change also resulted in the early stage of liberalization of the economy, which increased opportunity for some indigenous businessmen.
Today’s Nigeria has some similarities with that period but the country has evolved a great deal. The economic space is much bigger – the biggest in Africa for that matter. The size of the population is much bigger. The opportunities are more interesting but the challenges we face today are also much more complex.
What were the opportunities that challenged you into going into business?
My first major breakthrough was the acquisition of an insolvent/distressed bank in 1997 – Crystal Bank Limited – which we rechristened Standard Trust Bank. At the time, there were well over 100 banks in Nigeria as the sector had been newly liberalized. The capital requirement for a banking licence was a large sum of money but insignificant when you compare it to the requirement for a licence after the Soludo/consolidation reforms of 2004. In essence, the banking environment in the 1990s could be described as “volatile”. A number of the banks were weak and competition was very intense. We were lucky. STB went on to become the fifth largest in Nigeria prior to its merger with UBA in 2005.
More importantly, we were able, with the Crystal Bank acquisition, to demonstrate the importance of visionary, strong and focused management in the fortunes of a business. We also introduced a novel concept for this environment at the time called a debt for equity swap to help stabilize Crystal Bank. In essence, we asked some large depositors to show some faith and confidence in our team and vision by taking an interest in the new entity in lieu of their deposits.
It worked and other management teams have replicated that formula with varying degrees of success since we pioneered it in 1997! The point I am making is that we tried a new thing in Nigeria but the idea itself wasn’t new. That philosophy is a running theme common to virtually all my business ventures.
How did it all start? When was your breakthrough?
We did the Crystal Bank acquisition I just talked about when I was 34. I was the youngest CEO of a banking institution at that time. I was full of energy and ideas. I was also very ambitious. Suffice to say, the journey started in earnest in 1997.
How early did you get involved in business?
You are now into many sectors of the economy. Is it by chance or were you motivated by government incentives?
I think Government will always be important in creating an environment that is conducive for business growth but incentives alone don’t make an unviable venture profitable or sustainable for the long term. Take our foray into power as an example. We would not have invested in the power generation business if Government had not decided first to privatize its power assets and encourage private sector participation. To that extent, Government policy and commitment were vitally important to that decision.
However, our ongoing commitment to the power sector is motivated by the opportunities we see in that sector given the importance of power to an industrial economy or an economy which has aspirations of industrialization.
Your entrepreneurial internship is gaining momentum, what is the motivation behind it and how many young entrepreneurs have been groomed so far?
The Tony Elumelu Foundation Entrepreneurship Programme has been a long time coming. I have always been clear that entrepreneurship should be the driving force for transforming lives/societies at large in Nigeria and in Africa.
Spirit of entrepreneurship
I have also long believed that in order to secure the future of our people and our continent, we had to find a way to empower entrepreneurs to do more. My own path has been charted by that spirit of entrepreneurship. I want that same spirit to be more pervasive. That was the motivation for TEEP. We have decided to commit to supporting Africa’s budding entrepreneurs and by so doing, contribute our part to move Africa forward.
TEEP is in the middle of accepting applications for the inaugural run, but in supporting 1,000 entrepreneurs each year, after 10 years we will have groomed 10,000 people and prepared them to help transform Africa.
What is this whole idea of Africapitalism?
Africapitalism is an economic development philosophy that seeks to redefine the private sector’s role in the growth and development of African economies and societies. Put simply, Africapitalism, as a philosophy, advocates long-term investment in strategic sectors of the African economy that have the potential to create economic prosperity and social wealth. It is a call-to-action for Africans to take responsibility for our own development and for non-Africans to rethink how best to channel their efforts and investments into the continent.
You’ve ventured into power — can you achieve the same success as you have in hospitality and banking?
Absolutely! Let me add that we have also successfully drilled our first oil well; so it is now banking, oil & gas, real estates & hospitality. In my humble opinion, success is a result of drive, discipline and meticulous attention to detail.