Access to electricity is critical to economic upliftment of our people – Elumelu

Tony Onyemaechi Elumelu, chairman of Heirs Holdings, the United Bank for Africa, Transcorps and founder of The Tony Elumelu Foundation, recently spoke to Arise Television on a wide range of issues bordering on businesses, Nigeria’s and African economy, the place of power/electricity in economic development of the country, and many other issues. Zebulon Agomuo brings the excerpts:

In 2010, you left your position as MD and CEO of United Bank of Africa (UBA) and then projected long into entrepreneurship. You own Heirs Holdings, Transcorps, you are into oil and gas; you have the Tony Elumelu Foundation and you are into philanthropy and you are all over the place. Now, how do you manage to juggle all of these? What are the challenges you have faced managing all these?

In 2010 when I left UBA as the CEO, I decided to found Heirs Holdings. It is a family investment company that is interested in investing in key sectors of the African economy. We are basically driven by our philosophy of African capitalism. We want to see the private sector play its role in the economic development of our continent.

That’s why we founded the Heirs Holdings and today, when we started, the ambition was to help to improve lives and transform our continent. We thought that the way to do this was to invest in critical sectors of the economy such as power. Access to electricity we believe is critical to the economic upliftment of our people and critical for developing our country. We also made sure we have integrated energy, not just power; but to make sure that there is gas fixed stock to help the power to operate is done.

That is also why we invested in oil and gas. For us, it is just to make sure the ecosystem is completed and can actually help to power our country out of poverty and into economic prosperity.

We also believe that 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 in that space. In the areas of healthcare, we are doing quite a lot to help improve the human capital of our country and continent because we have seen with the pandemic that health is wealth.

Talking about challenges, and how we are able to juggle all of these, as I have always said, investment and success in the 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; it may seem to people that it is stressful, yes, it is tough, but I am blessed with capable hands. If you look at Transcorps, you’ll see that we have competent leadership both the CEO of Transcorps and others that work with her are very capable people.

They help to fire our growth. If you look at the area of healthcare Dr. Elumelu (my wife), she runs our Avon medical business. These are great leaders who help to make this entreprenureship enterprise, though not simple, but not as difficult as it would have been.

My job today is more of thinking; sitting at board meetings with them, and providing some level of strategic direction at that level, but allowing them to do what they know to do best. The challenge we face is basically the challenge with every enterprise- the economy; how do you manage the micro-economic issues; the socio-economic issues?

Those are the things. But basically, we are happy with what we are doing and Tony Elumelu Foundation is also happy that we are able to impact lives and able to transform our continent through the economic empowerment of our youths.

When you were forced to relinquish your position at the age of 47 when you still had enormous energy to do more for the bank as the MD/CEO of UBA; when you look back now, would you say the then CBN governor that carried out that policy at that time did you a huge favour?

I want to tell you what people didn’t know. We had Bankers’ Committee Meeting at the end of the meeting he (the then CBN governor) said CEOs who have done 10 years should step aside. That day, I called our chairman to explain to him what happened; then he called an emergency board meeting.

At the meeting, it was a divided house, for the first time. Some directors said no; we must have to go to court; about one or two said we should not. I spoke; I told the Board members, that there are five constituents of UBA.

There are stakeholders here; there are customers of UBA – would they like that we took our regulator to court, no; staff of UBA, would they be comfortable working with a bank that took the regulator to court, I said no; the three constituents – the stakeholders – would they be comfortable that we took the regulator themselves would they like you took them to court, of course no.

So, four constituents would not like us going to court, there’s only one constituent that may like it – that’s me – Tony Elumelu. I said this constituent is one over five – it is 20 percent; it is not enough to go to court against our regulator. By the way, I had been planning to move on- to leave at 50. So, what happened was some kind of fast track the time I planned to leave. So, that was what happened and that was why within 24 hours we appointed a successor because we have a strong line of successor at UBA. At anytime you can count 2,3,4,5 people that can step into a role. That was what happened. Now, looking back today, first I say, I planned to leave at 50 but I did it 47, is it good that it happened? Yes, I am happy. I look back today; we have done quite a lot; it has always been about impacting humanity. It has always been about improving life; it has always been about transforming everything we do, in business we are known as turnaround experts. We transform businesses. In philanthropy, we try to catalyse and to help create a crop of African leaders. It is all about transforming our society and it is all about trying to make sure we leave our society better than we met it. For me, that opportunity to start these three years ahead of the planned time has been a blessing.

It appears you have a management style whereby you like moving your managers around. Is it a way of having firm control over the affairs of the Group or is it a way of keeping them on their toes. After you left UBA as the CEO, you still came back as chairman; how did you achieve that?

In 21st century you don’t juggle managers to show you are in charge. That’s not the way to lead. In the private world (in business) you need to balance (or bring consistency) between the internal and external world. You need to make sure your strategies are being executed as planned. And for us, what we do (we have different CEOs within our Group) we believe in longevity and people to settle in. So, we don’t change our CEOs frequently. But for me coming back as chairman of UBA; well, I spent my cooling off period at the end of which I came back as chairman of UBA. I believe strongly that business leaders should be agile; should do their job very well and help to execute our strategy. I would say that we do have crop of young talented leaders – upcoming; personally I am impressed the way they go about accomplishing our corporate objectives. I think at UBA, Heirs Holdings, Transcorps, Tony Elumelu Foundation – these guys are trying. You asked me how I am able to deal with all of these responsibilities – the reason we are able to cope is because we have the right persons in right places. We have people who are strong, who are helping to execute things very well and they take the pressure off me.

What is your take on the power sector because you play in that sector? What do you think needs to be done to make it more effective, particularly in terms of service delivery?

You know in power sector there are three parts to it- there is the generation, the transmission and then the last mile (the distribution). Transcorps, through transcorps power and Afam power, which today in Nigeria, we own the highest generating capacity in the country. We can generate 2000 MW of electricity a day; but unfortunately, we do less than 500MW of electricity at this point in time. A major constraint in this area is gas. There is also the issue of evacuation and transmission of generated electricity, and there is also the issue of payment. So, for things to work well; for us to generate more, we need to have gas; that is why in our group we invested in oil and gas. Investing in oil and gas for us as a group is not necessarily because of oil, it is because of gas to ensure that we have oil and gas for production; to convert it to electricity. Going back to the issue of transmission, we need to make sure we stabilise our transmission line, so that they can take up- this country needs at least 100,000MW of electricity per day for us to power the economy, but today we operate less than 5,000MW. We need to do more. We need to make sure the transmission lines are stabilised. Another critical part is payment – the distribution, metering and payment and co. Here, I must commend the Central Bank Governor, Godwin Emefiele; he’s done very well, because, he has helped to come into the back end in that space and helped to increase revenue in that space. Up until the end of last year, the NBET (The Nigerian Bulk Electricity Trading Plc) used to pay about less than 20 percent of power supplied; but today, they have improved up to 50 percent and they owe us a lot. Transcorps Power alone is being owed over N100 billion but it is gradually improving. So, for the power sector in Nigeria to work well (and it must work well for us to drive this economy) we need to increase generation, make sure we fix gas supply to generating companies, make sure the transmission lines are capacitised to evacuate the power; we need to also make sure that power generated are taken by DISCOs and that they pay so that if I generate electricity, I should be able to get money so that I can service my obligations also, as well as making sure that the machines are also serviced to make the generating plants running. These are basically the things to do. How would I assess the journey so far? Well, I can say, it is still a critical sector we need to invest in and the stakeholders need to make sure that it works. If it works, then the country’s economic development becomes more real; if it doesn’t work, well, there will be 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 it is poor access to electricity. So, any amount you give, some of them will not succeed because they spend so much on electricity. Every sector of our economy – healthcare (hospitals), even schools, (education), we need to fix our power sector. We need to prioritise it more. But I commend the efforts going on now.

Do you think the Federal Government should hands off transmission or are you going to make a bid for some of those Gencos that the government is trying to privatise?

Yes, we would be interested in one of the hydros. Now, the area of transmission line, I think that ultimately, it should be privatised. In fact, what some of us have advocated is that the Gencos and Discos – the entire power stakeholders should come together and have a deal with the Federal Government; take over the transmission line; and it is in our interest to make sure that it works. If you have the transmission line and it doesn’t work, and you are generating, there’s no way you can evacuate your power. So, that sector is so critical and pivotal, for the survival of our power sector. It is critical to improving access to electricity in the country. What is important to us as operators is for us to have expanded capacity. But I am sure if you talk to those at the transmission line, they will also tell you the reasons why they have constraints. But for us, we want to see a massive improvement in that area. We want to capacitise that place. The Ericsson deal as I am told is to make that happen. Details of that I don’t know, but I am told it is to help capacitise the transmission line.

Do you, therefore, subscribe to the unbundling of the TCN for efficiency in the power sector?

Yes, that’s what I have said earlier. I think first, I don’t know much about that area; but I know that the transmission sector in the power equation/sector- we need to improve capacity in that area; and whatever we should do to make that happen, we should do so. Time is now, because we are all suffering it. It is becoming too difficult; at times, you generate but it can’t be taken; so, the power plant can just break down; all of that frustration we don’t need in our power sector. Whatever it entails to fix that sector should be done. As 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. But even when that works, we have to make sure that the last mile works also – that people pay (meter, the distributing companies you supply to them and when they take it, they should pay to NBET; so that NBET should pay to the Gencos. Each of the three critical parts must work well. Generating companies must generate; the transmission companies must transmit and the distribution companies must make sure it gets to end-users; because that’s actually where people begin to feel the impact of this electricity.