Tony Elumelu, chairman of United Bank for Africa Plc, says the Nigerian business environment is “supportive and hospitable” to any serious-minded investor.
Elumelu, who spoke at an investment forum organised by the Bureau of Public Enterprise (BPE), said despite several challenges in Nigeria’s business environment, there are opportunities for high returns on investment for investors in critical sectors of the economy.
“There’s nowhere else you get the kind of returns on investment that you get in Nigeria especially in some of these critical sectors like power,” he said.
Speaking on his investment journey experience in Nigeria, Elumelu, who is also the chairman of Transcorp Plc, a diversified conglomerate with investments in power, hospitality, oil and gas, said the company’s foray into the power sector is yielding high returns to shareholders.
“In 2013, we invested in power sector. At the end of that year, we paid dividend. An investor that had certain percentage of our shares then earned like N80 million dividend. First year dividend in first year of investment in power sector is unheard of, so we do see opportunities here, we do have high returns on investments. We just invested on Afam power plant and others, close to 1000MW of electricity generation capacity and we’ve been able to, since last year November, increase production by 241 percent generation,” he said.
“We invest in hospitality and real estate sector, is doing quite well. Occupancy in iconic Transcorp Hilton Hotel as at last week was over 100 percent. We were at Abuja for a launch of Aura, a digital platform for accommodation, experiences and good life and then it was quite difficult for some of my colleagues to even get space on the property That’s the kind of investment we have in Nigeria.”
Speaking on the challenges doing business in Nigeria, Elumelu lamented the disturbing rate of oil theft and bureaucratic bottlenecks in getting approvals for some critical investment decisions.
He said Nigeria lost N206 billion to oil theft from January-April this year, noting that 10percent of the national economy from its budgeted revenue from oil and gas is lost to thieves.
“When we wanted to make our first foray into the oil and gas sector. We suffered, we raised $2.5 billion and at some point we didn’t get all the authorisation that we need. We lost quite a lot of money and we had to return this money to investors. My advice on this, we need to depersonalise investment opportunities and focus on the impacts some investments will make for the country, that is what we should be thinking going forward,” he said.
“The oil theft is very very high. I share these statistics with you. We will have two crude pipelines in the Niger Delta, the NCTCL and TMP Lines. To date, four months of this year, we have lost in the country is both operators and trading partners, is N206 billion.
“In theft average monthly theft is about N52 billion a month if we project this till the end of the year, 12 months, we have about N620 billion lost to theft. And of this figure, NNPC has almost 400 billion and the rest are about 200bn.”
Elumelu also called on the national assembly to pass the national health insurance scheme into law, noting that only 5 percent of 200 million people have access to health insurance in Nigeria.
He commended the federal government for the passage of the finance act into law, describing it as a “wonderful piece of initiative”
“We’ve seen a government from our experience that is extremely supportive of private sector investment. We have seen this first-hand and I think if we continue like this, we will eventually address all the challenges and make Nigeria great in our life-time.
“The vice-president spoke about the tax infrastructure scheme, we the Transcorp group is a beneficiary of this, we have 13.5 million km link road in Rivers state in Oyingbo-Afam link road which the president has approved for Trancorp to also develop the road. Initiatives like this, I think, should be commended and good for development. We need private sector to help to develop and creating infrastructure in our country.”
He said the Tony Elumelu Foundation was established to empower women and men across the continent, catalysing economic growth, driving poverty eradication and ensuring job creation.
“I have been a beneficiary of luck and I felt that at some point we should help to democratise luck, we should help to create opportunities for people, that led to the founding of the Tony Elumelu Foundation and the endowment of $100 million help support people, Nigerians and non-Nigerians alike on a yearly basis, give them non-refundable seed capital pool of $5000 so that we can all democratise prosperity,” he said.
“When people have economic growth, they won’t go into extremism. This is what we are committed to eradicate and the good thing is a lot of people are coming together. I’m happy to see AfDB supporting at least a thousand million marketers which is about $5 million, and we have partners in UNDP supporting the Sahel region, doing a lot in that area. It is a bold and ambitious programme to support at least 100,000 young Africans in the Sahel region.”