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The Warren Buffett Of Africa And His Harrowing Ordeal

Multi-millionaire Tony Elumelu has enjoyed a remarkable career as banker and entrepreneur. All the money and success in the world could not have prepared him for the shock that came knocking in April.



Tony Elumelu is in his office on the corner of a serene Ikoyi street, not far from the bustling Obalende taxi and bus park, in the heart of Lagos. Documents are strewn across a large desk and he looks busy.

“I was in a meeting in this office when I got the call. The first thing I did was to call one of my brothers, to mandate him to take charge. In crisis management, the first thing you do is get somebody to take charge,” he says.

It was a call that everyone dreads. Kidnappers had snatched his 84-year-old mother, Suzanne, from her farm in the Delta State. Elumelu, realizing the futility of panic, strove to deal with the situation calmly. By all accounts, there was nothing frenzied about his actions in the days following the kidnapping.

I ask if he expected something like that to happen. His answer is instant and forceful: “Not at all!”

Elumelu sums up the incident as “a symptom” of the prevailing despair in the country. Nigeria’s security agencies “were very supportive,” he says.

It all ended well, she was rescued four days later, and arrests were made. The message from the Elumelu family on Facebook says it all.

“The family wishes to thank Nigerians and friends from around the world for the unprecedented outpouring of concern, solidarity, love and prayers during the harrowing ordeal. We are most grateful to the Federal Government, the Delta State Government and the respective law enforcement agencies for their professionalism, diligence and bravery which led to her rescue. At this time the family requests for privacy to spend time with Mama, and recover from the emotional wounds and anguish of the last few days.”

Persuading Suzanne Elumelu to move to the relative safety of Lagos doesn’t appear likely. Elumelu says his mother insists on staying in her village. At that age, he adds, it is essential for her to be where she feels at home.

As Elumelu and his family recover from this trauma, the coming months promise to be hectic for him. There are three new hotels to be built: two in Lagos, and one in Port Harcourt. This will increase the number of hotels owned by his Transcorp Group to five, in which he acquired a controlling stake in 2011 through Heirs Holdings, his investment firm.

Then, there is the goal of taking over the entire import market for fruit juice concentrate by 2013. Elumelu says that until the opening of Transcorp’s manufacturing plant—the agri-business subsidiary run as Teragro Limited—in Benue last March, Nigeria imported all of its concentrate, costing the economy close to $1 billion every year. Teragro also plans to build fertilizer plants in Delta State.

There are also the two oil blocks, one owned by Transcorp, the other by Heirs Holdings. He expects that by 2013 both oil blocks would have gone into production. And then there is the power plant Transcorp is bidding for, under the Nigerian government’s privatization program. For this, the company has gone into partnership with US energy firm, Symbion Power. When the deal is done, Elumelu says the goal will be to increase the plant’s capacity from the current 300MW to 1,200MW.

Elumelu is a champion of the private sector and its role in redeeming Nigeria and Africa. Regarding the insecurity in Nigeria, he chooses to focus on how the private sector, by providing employment, can help create a less combustible environment.

“Where there’s hope people do not take to violence. Where there’s no hope people become vulnerable,” he says.

His story is by now a well-known one. In 1997, a group of investors acquired the distressed Crystal Bank Limited, and rebranded it Standard Trust Bank (STB). Thirty-three-year-old Tony Elumelu, who until then was executive director at Continental Trust Bank Limited, was appointed CEO of the new institution. Over the next few years he grew it into Nigeria’s fifth largest bank. In July 2004, the Nigerian Central Bank governor, Charles Soludo, announced a series of banking reforms, with the goal of creating larger, more robust banking institutions in Nigeria.

Elumelu led Standard Trust Bank into a merger (in Soludo’s words, “the first successful merger during the banking consolidation”) with the older and larger United Bank of Africa (UBA), and took over as CEO of the new entity, which adopted the UBA name.

Nuhu Ribadu, former chairman of Nigeria’s Economic and Financial Crimes Commission, recalls it as being the “gutsiest news of the year”. The merger was completed in 2005, and a year later the Elumelu-led UBA became the first Nigerian bank to hit a N1 trillion ($6.3 billion) balance sheet mark. The ‘whizkid’ had come a long way from the modest beginnings at STB—which had a N5 billion ($31.7 million) balance sheet in 1998.

The UBA phase was destined to wind up as it had started—on the strength of a policy pronouncement by the Central Bank (CBN). In January 2010 the new Central Bank governor, Lamido Sanusi, introduced a new rule stipulating that bank CEOs would have to retire once they had clocked ten years in office. Elumelu was in his 13th year as CEO—eight years at STB, five at UBA—so, at the relatively young age of 47, Elumelu was going to have to step away from the business in which he had made his name and fortune; from a bank he’d grown into a pan-African brand, with more than 800 branches in 18 African countries, and $19 billion in assets.

Two days after the CBN policy announcement, UBA named Tony Elumelu’s successor, becoming the first of the banks to realign. He recalls people telling him he was too young to quit, wondering what he would do with his life. He was the youngest of that set of CEOs to retire.

“But looking back,” he tells me, “there couldn’t have been a better time to start a second journey.” And thus began the second life of Tony Elumelu.

It has been almost two years since Elumelu left banking. I ask him to assess the bank he left behind. I’m especially interested in what he thinks about its 2011 results—the bank posted dismal results: a pre-tax loss of N28.5 billion ($180.8 million); the result of debt write-offs.

“Last year UBA decided to clean up its balance sheet … This has been demonstrated on the first quarter results,” he says

UBA posted, for the first quarter of 2012, N16 billion ($101.5 million) pre-tax profits, a 233% increase from the corresponding period last year. And its share price has more than doubled over the last month.

“Africa is beginning to contribute to the [UBA] bottom line. Africa contributed over 20% of the [first quarter 2012] profit. The harvest period is here.” UBA Ghana, he adds, currently generates profits of “close to $3 million monthly”.

He sees a bright future; referring to a new Standard & Poor’s’ report that predicts a rise in GDP across several African countries.

“UBA operates in almost all the countries they mentioned,” he says.

There is an air of ruthless efficiency around Tony Elumelu—deducible, not merely from his rise in less than a decade from relative obscurity to a prominent place in the engine room of the Nigerian banking industry; but the sculpted jawline, and the flawless, understated cut of his suit. The credit for his fitness should go to the gym, not the golf course. He’s that rare type of CEO—the non-golfing one. And no doubt this is a man obsessed with getting things done—no fuss, no excuses. Just like Michael Jackson.

“If you saw Jackson’s last movie, This Is It, you saw a man who was so detailed and meticulous,” he says.

“He believed in hard work”—at this point his voice takes on greater forcefulness—“Look at the amount of practice, energy; everything he put into that show!”

In a country where all sorts of stories circulate about the personalities of corporate CEOs, the no-excuses-acceptable Elumelu would be lucky to escape unscathed. A hint of this may be gleaned from a tribute to him written when he was leaving UBA, and published in a hefty coffee-table book, The Power of Vision. “Sadly, he is misrepresented publicly as being an arrogant and hard person,” writes Owen Omogiafo, who worked as his executive assistant at UBA, and now works as director of resources at Elumelu’s Heirs Holdings.

One underlying theme in the tributes in The Power of Vision is the idea of Elumelu as a people-person.

“Talents I don’t have, I don’t regret; I surround myself with people who have them,” he says.

During the interviews he comes across as sober and soft-spoken, with tendencies  for much chuckling and laughter. A member of staff tells me one of the things she’s realized about him is how close he is to his family—his wife, Awele, and their five daughters. In the time I spend with him, sitting in on a meeting of senior management, and then interviewing him (twice), his mischievous, self-deprecating sense of humor shines through. When I ask him what talent he wishes he had, he says: “I think I’m very shy, but people don’t think so.”

On July 31, 2010, at the farewell party organized in Lagos to mark his retirement, Elumelu said: “As I retire from UBA following the regulatory pronouncement, a question has come up in the minds of so many of you here; what’s next for Tony Elumelu? I would like to share that with you today. I have two passions—entrepreneurship and philanthropy.”

Thus, were born Heirs Holdings, his investment company, and The Tony Elumelu Foundation, a non-profit organization keen to redefine philanthropy in Nigeria and abroad. In Elumelu’s words they were intended to “develop business excellence and leadership in Africa.” He shares the vision behind the transition.

“Upon my retirement from UBA it was a question of ‘beyond business’. I tell people I was born in Africa, bred in Africa, schooled in Africa, worked in Africa, still work in Africa, and achieved some level of financial and economic comfort in Africa, from Africa to—so you ask yourself, what’s next? What’s next for me is: I’d like to create more Tony Elumelus. If, due to our entrepreneurial drive we’ve been able to create 25,000 jobs, if we had 10 or 100 people like me, multiply 25,000 jobs by 100, it’s more impact. To me those are more sustainable and impactful ways of helping society than just donating money.”

Embarking on such a journey, he looked to the example of Warren Buffett.

“I decided, okay, it’s time to build a holding company that will monitor our investments in companies we’ve invested in. What we do here at Heirs is slightly patterned after Berkshire Hathaway. Buffett is a very astute and serial investor. I like his business sense. When it’s time to give back to society he’ll give, but time for business is business; they are two different things.”

From the “lean” nature of Heirs Holdings to its “highly strategic” approach to investing, imprints of the Buffett DNA are evident.

Joining Michael Jackson and Buffett, in Elumelu’s personal pantheon, is the man who’s arguably the most famous contemporary second actor—stepping down from running one of the world’s most successful companies to devote his life to philanthropy: Bill Gates.

“He changed the world to a large extent, and upon retirement—he also knew when to leave—he decided to give back to society. The learning point, for me, from Bill Gates is that this is a world of infinite possibilities.”

Leaving UBA freed him up to expand his perspective.

“UBA’s life was extremely busy but industry-focused: just on UBA and banking. And I was at UBA, more like, at operational level.”  But now, it’s a different type of life—more of a strategic life, looking at bigger pictures and interests,” he says.

Now he has a lot more speaking engagements within and outside Nigeria. Most recently, in April, there were appearances and speeches in Washington, D.C.: at the International Finance Corporation headquarters; the Global Philanthropy Forum Annual Conference and a meeting of the World Bank Group Advisory Council of Global Foundation Leaders.

I’m curious to know how things would have worked out had he not left UBA when he did. From the readiness of his answer, it’s clear that it’s something he has thought about.

“If I didn’t leave UBA when I did, two things would have happened: one; I’d still have continued to see life from that micro-perspective, and think this is just everything about life—competition… But today one has transcended to a different level where you look at your business interests, you look at mankind, you look at society, you look at the interplay of societal forces that shape the system, the economy of the country, the continent. You’re looking at advocacy, trying to make sure there’s good governance because good governance brings economic prosperity and social wealth. You’re also trying to do good; to give back to society in a more impactful way, to mentor others…”

Again and again Elumelu sounds like a business professor addressing a class. Words and phrases like “sustainable”, “impacting”, “good/better society”, “good governance”, “full potential” crop up regularly.

When I ask him what he would title his autobiography, the motivational speaker within him takes over.

“I like to make people understand that there is no glass ceiling, that you are who you want to be; that if I can, you too can… I was not the most brilliant in school, and I also did not have all the resources growing up, to have everything I wanted. But I had a determination, I had a purpose, nothing in my life happened by chance… and I think people can become what they aspire to be.”

In the end we conclude that the phrase “glass ceiling” is likely to feature in the title of the book.

At our second meeting he deflects my attempts to get him to declare his net worth. “It’s not how much we’re worth but the amount of impact we make. Why boast that one is worth a certain amount when there’s so much poverty around. I will assess my wealth based on the [number of jobs] I create through my economic investments,” he says.

As the curtains rise onstage for act two, Elumelu joins a set of Nigerian CEOs and billionaires who are redefining the rules of the retirement game. Gone, it seems, are those days when, after quitting the roles that brought them to national prominence, CEOs settled for a life of sitting passively on company boards; playing golf; attending social functions; chairing book launches—and handing out scholarships to indigent students. More retiring Nigerian CEOs, it seems, are carrying C-suite thinking along with them into the retirement zone.

“We’ve had a trend in the past where it was more of donating monies to society, but I personally believe that this is not the age and time for that. Donations are good, but to a large extent we should do it in a way and manner that is sustainable, we should make it have more meaning and impact,” he says.

Given a choice between giving out a million dollars in scholarships, and using the money to fund advocacy that could positively influence the government’s education policy and help expand citizens’ access to education, he insists he’d settle for the former.

“It might not sound too populist, and people might not even appreciate what you’re doing, but indeed it has the most significant impact for society,” he says.

After laughing at my questions about the possibilities of a third phase, Elumelu is ready with an answer. I realize that he’s assumed, rightly, that I’m hinting at full-time politics.

“I believe that everyone cannot be a king, and at times, you know, kingmakers are more powerful. I think that I’m very content with this second phase, more so that I’m able to combine business with advocacy, in a manner that is sustainable,” he says.

He proceeds to lecture me on “natural human progression”.

“There’s the age of acquisition, after that [there’s the] age of social order, social wealth, happiness for all—you need to think of how you want to be remembered and [helped] change the system. There could also be a third phase of, ‘you know what, let’s go and do it, let’s get things done’, but I think one has to know one’s limitations, strengths and capabilities. So instead of all of us being involved in government, we can be outside and support the government to achieve growth and prosperity.”

Around the world bankers are prime candidates for the backlash against the excesses of capitalism. I ask about what it means to be a member of the “1%” (and I’m interpreting this loosely; hinting at the fact that he belongs to the moneyed class). He laughs, and then sets out his thoughts on the state of the world. He draws from foundational economics philosophy—the work of Lenin and Marx—to make his point.

Elumelu thinks governments should take the bulk of the blame for the global economic crisis.

“To a large extent we are failing to hold those we should hold accountable for what’s happening—the governments that have failed to either create the right environment, or to block the loopholes… I do not think that the world should be negative towards successful businesspeople. What is important is the kind of governance framework we put in place to make sure that successful people do not exploit those who are not so privileged.”

He is standing up for his capitalist constituency, but in this new phase of his life, the larger society counts just as much.

“Why is it important to companies that a country has a huge population and huge purchasing power, that income per capita is high?” he asks. “Because those are predisposing factors to good business—it means it is in our collective interest that people who are at the bottom of the pyramid are also able to afford certain things.”

That task—of reconciling the hard-nosed demands of the bottom-line with the interests and well-being of the pyramid-bottom—it seems to me, is what the second act of Tony Elumelu is all about. And he is going about it with the same passion, and intelligence, with which he built one of the largest banking institutions in Africa.

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