Tony Elumelu, banking-to-power billionaire and the grand patron of Africapitalism clocks 58 this day. While the chairman of the pan-African United Bank for Africa is engaged in the task of raising entrepreneurs in different African countries, he is also concerned with positive investment intervention to rescue the Nigerian economy and save thousands of jobs as foreign investors desert the country.
He is passionate about helping Nigeria get power, robust, accessible, reliable, and plentiful, for industries, services, and consumers. This is why his Hiers Group has developed the largest installed electricity production capacity in Nigeria, the recent purchases of the Afam Power Plants, its turnaround of the Transcorp Power Plant, its work on the company’s other oil and gas assets, all leading to a single goal – sustainable, robust, and widely available power, that will drive schools, hospitals, and industries.
Right now, he is doing a lot to help steady the Nigerian economy as he joins some other Nigeria’s billionaires and big businesses who are plowing money into Africa’s largest economy. He is doing this as foreign investors shy away from the country in the midst of its second recession in six years. In November last year, the banking-to-power billionaire Elumelu said he was set to close a $1bn oil block deal soon, while flour-and-cement billionaire Abdulsamad Rabiu’s Bua Group is to build a multi-billion-dollar 200,000 barrel a day oil refinery in oil-rich Akwa Ibom state. That project will compete against a $12bn 650,000 barrel a day mega refinery being built by Africa’s richest man Aliko Dangote on the outskirts of Lagos.
Elumelu is playing this rescue role as many local entrepreneurs’ confidence contrasts with the caution of overseas investors. Foreign direct investment into Nigeria in 2020 trailed Ghana, a country with an economy and population one-seventh the size of that of Nigeria. In the course of that year, Foreign Direct Investment was down, down about a third from a year earlier. Portfolio investors also fled, seeking safe havens amid global turmoil caused by the COVID-19 Pandemic — inflows fell to $385.3m during the period, down 91 percent from a year earlier. The economic picture was frightful. GDP contracted 6.1 percent in the second quarter and 3.62 percent in the third quarter, while unemployment and inflation are soaring and food prices are rising.
But Elumelu knew that these temporary challenges would soon pass away. And he realizes that he is one of whose shoulders the task of rescuing the country lie on. “Some foreign investors. . . at this point, might not be too willing and excited to invest. But the local, indigenous investors. . . no one is slowing down at all.” He said last November 2020 when he invested in some oil and gas assets.
In a written statement, Elumelu stated that: “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…We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.”
As a concerned Nigerian, Tony would like to contribute to deepening jobs and prosperity in Nigeria to showcase the attractiveness of Africa to the world. This is because, he sees potential in energizing Africa’s largest market, despite the turbulence of the moment. He announced a 45% participating interest in Nigerian oil license OML17 and related assets, from Shell, Total & ENI for $1.1bn, in a tweet. He did so, he was of the view that there would be a long enough window to monetize the OML17 asset. The deal is one of the largest in oil and gas in Africa in more than a decade, and the first major private sector acquisition in the industry since President Muhammadu Buhari’s second term in office. The last major round of sell-offs from Western international oil companies to Nigerian firms was at the top of the oil market a decade ago.
The OLM 17 field has an estimated reserve of 1.2 billion barrels of oil. This will give Elumelu along with the consortium of global and regional banks and investors a big enough market to make significant returns on their investments. In addition, while countries with the largest CO2 emissions are expected to switch to clean, renewable wind, water, and solar power, this will be no later than 2050, which is still a long way off, according to analysts.
Tony has the capacity for managing costs, transparency, and environmental and community issues that ultimately make the license unattractive for Shell and its partners. And he will put this one on display to further boost the Nigerian economy. With the depth of competence at Heirs Oil and Gas, those risks would be mitigated by diversification into other parts of the energy sector in a little while. Of course, Hiers Group has developed the largest installed electricity production capacity in Nigeria. The group was also one of the leading supporters of President Obama’s ‘Power African Initiative’ where Heirs Holdings committed $2.5bn to increase affordable and accessible power in Africa and was the single largest private-sector investor in that initiative. And now with the Biden Administration’s renewed focus on Africa, the company will play a more tremendous role, ensuring a business that is sustainable, creating economic and social wealth, and delivering on its strategy to power Africa.
Apart from rescuing his country from economic collapse, Elumelu has also long been planting the seeds of entrepreneurship across Africa, empowering thousands of youth across the 54 countries in the continent. He recognized the need that budding entrepreneurs have to be trained in business leadership as well. This is because of the need to guarantee the long-time survival of their business enterprises through infusing them with values that will make them….. that they were not only pursuing their own companies’ profits but also trying to contribute to building a better society through their products and services. This is one of the virtues of Tony’s business philosophy, community, and companies. Back in his days in banking, he saw that as a welcomed.
Determined to achieve excellence, he built UBA into a banking powerhouse and one of Nigeria’s most iconic global institutions where the attitude of building a better society held sway. It was this attitude, which translated into respect for him and his UBA brand as a whole. With the training being received under the tutelage of Elumelu, these youthful entrepreneurs are being empowered to be able to develop a product plan in terms of whether it can contribute to a better society. Carefully selected materials and highly skilled techniques are used in the manufacturing process to produce high-quality products. Secondly, they will incorporate the customer’s point of view in fine-tuning their services, thereby scoring high in customer satisfaction.
Elumelu owns a controlling interest in Transcorp, a publicly traded Nigerian conglomerate with interests in hospitality, agriculture, oil production, and power generation. He came into the limelight in 1997 when he led a small group of investors to take over a small, floundering commercial bank in Lagos. He turned it profitable within a few years and in 2005 he merged it with the United Bank for Africa. That banking group now has subsidiaries in 20 African countries and in the U.S and U.K. Elumelu also owns extensive real estate across Nigeria and a minority stake in mobile telecom firm MTN Nigeria, among other assets.
Elumelu is a philanthropist of note. Sometimes ago, he made a donation of $500,000 to Sierra Leone to help alleviate the suffering of people affected by floods and mudslides in the country. With his actions and activities, Elumelu could be compared with the legendary Japanese business leader, Shibusawa Eichi (1840–1931) who was termed the “father of Japanese capitalism.” Over the course of his working life, he founded and built up over 500 banks and business corporations, including the First National Bank (Dai-Ichi Kokuritsu Ginkō, now Mizuho Bank). His remarkable accomplishments were based on his solid conviction that morality and economic activity are compatible—the doctrine of the inseparability of morality and economy. Shibusawa found the basis for this conviction in the Confucianism that he espoused, particularly the Analects of Confucius. Paraphrasing morality as the Analects and economy as the abacus, he often used the expression “the Analectsand the abacus are inseparable.” Moral behavior is an essential element of economic activity. And economic activity is an essential element of moral behavior. Morality and economy are indeed two sides of the same coin. This is the logic of Shibusawa’s doctrine. Morality is of two types: passive and active. Passive morality refers to not doing what one should not do; active morality refers to doing what one should do. Shibusawa’s message was that passive morality is essential for the economy and that economy is essential for active morality.
Elumelu activities chime in with Shibusawa’s philosophy in respect to his patriotism, being in a hurry to lift so many people up through his Africapitalism and the market economy. Promoting public interest to help lift up so many others, up the ladder of prosperity if you are successful, is a philosophy that can serve as a pointer for consideration of how to make capitalism work better and promote the development of African countries economies in the years to come. And Tony’s philosophy of Africapitalism can contribute to making today’s African lives a lot better. As he clocks 58 and having a moment today, his life story will one day be turned into a hit new in books and drama on national television stations of some African countries, and his likeness will likely grace a new money bill some days.
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