Why government must invest in businesses, by Elumelu
THE Federal Government must be active in business concerns to fully diversify its revenue base, Chair of UBA Group, Tony Elumelu has said.
Speaking recently at the Public Wealth Management Conference organised by the Ministry of Finance Incorporated ( MOFI), Elumelu explained that MOFI must toe the line of Singaporean Temasek that owns significant stakes in companies, often with a focus on strategic investments that align with Singapore's economic development goals.
He added that Temasek actively manages its investments, engaging with portfolio companies to drive growth and value creation.
He noted that Singaporean Temasek is not a passive investor that sits back but more like a Private Equity firm that works closely with management to unlock value, saying, “We need this approach in Nigeria.”
He hinted that Temasek has investments in the strategic sectors of its economy to unlock significant value: Transportation, industrial, financial services, technology, telecommunications, real estate and consumer goods.
“T emasek was established with state- owned assets worth $ 300 million, today those assets are now worth approximately $ 300 billion,” he stated. Pointing to his experience as a banker of note known for turning the fortunes of entities around, Elumelu said: “The turnaround of a defunct Crystal Bank birthed into Standard T rust Bank, which is now part of today’s United Bank for Africa ( UBA). This was not a state- owned enterprise but the same principles for turnaround occurred here. We had a clear vision from day one of what we wanted to achieve in the financial services industry. We set out clear goals which we labelled our strategic intent and worked assiduously to ensure we met them. Today, UBA Group operates in 20 African countries, the UK, France, the UAE and the USA.”
Elumelu disclosed that UBA is the only African bank with a deposit- taking license in the USA.
Another experience is the Transcorp PLC that he has turned around.
“In 2010, following my retirement as the CEO of UBA, and in looking for new opportunities and ventures, the Heirs Holdings Group, my family’s investment firm acquired Transcorp Plc. At the time, Transcorp was formed to lead the industrialisation of Nigeria. The only asset Transcorp Group had back then was this hotel in which we are all gathered today. Today, Transcorp plays in the hospitality, power ( both in generation and distribution) and in the oil & gas sectors. In Power, we acquired the 972MW gasfired Ughelli Power Plant and ramped up its generations from 160MW to 701MW within four years of taking over the plant. Our Ughelli Power Plant is the first privatized power company to be discharged from post- privatization monitoring having surpassed all set targets by the BPE and the National Council on Privatisation.”
The Chair of Tony Elumelu Foundation expressed optimism that once Nigeria fixes the issues of gas supply, Transcorp will be able to generate enough electricity to significantly power the country’s industrialisation.