Africa.com was granted an exclusive interview with Nigerian business mogul and Transnational Corporation Nigeria (Transcorp) Chairman Tony Elumelu within hours of his having signed a major deal with General Electric (GE) to bring infrastructure to Nigeria. We started by asking Mr Elumelu how he was able to snag this mega deal.
The two companies have been in talks for some time now. Both with the same aim to drive infrastructural development in Nigeria. It was a “meeting of like-minds” says Elumelu. The signing of an agreement on January 30 is what the business leader calls the start of realizing a dream. On that day, GE’s global chairman Jeffrey Immelt said they chose to partner with Transcorp because “it is an African company with an investment philosophy that will drive change here and in the rest of Africa.”
Transcorp’s involvement really began in September last year, after the company beat two other bidders in a multi-million dollar deal for Ughelli Power Plant. Located in Nigeria’s Delta State, the facility was one of six state power plants offered to private investors by the Nigerian government. Elumelu says they saw the opportunity, and took it. And he’s clear about their goals. “We make money from it, but more than the money we make, it’s about creating an economic platform”.
If you’ve ever heard the term “Africapitalist”, know that it’s a term coined by Tony Elumelu to describe an economic philosophy based on the private sectors commitment to transformation on the continent. We asked Emumelu how that philosophy, which prescribes to a “for African, by Africans” ideal fits in with the partnership with American multinational General Electric. “We’re using their expertise to further our commitment to creating economic prosperity and social wealth. What we are doing is partnering”. It’s about making long-term investments he tells us. It’s something he stresses numerous times. That commitment, he says, is to improve the standard of living of Nigerians. The best way to do it? To work together. “We are approaching investors outside the continent that can help us make it happen”. GE has long since invested in the country, and continent (including Angola, Ghana, Kenya and South Africa), in a variety of sectors and have again confirmed their commitment to facilitate the generation of 10 000mw of additional power in Nigeria over the next decade.
Elumelu is realistic about the hard work that lays ahead.The Ughelli thermal power generating plant, has a capacity of 972 megawatts (mw), but is currently only producing around 330mw. The agreement, he says, will see the facility produce at least 1200mw in coming years, a much-need boost for the country’s power output. “Nigeria has been retarded on economic growth because of lack of power”, says Elumelu.“(This deal) is a wonderful opportunity that will make a significant impact in the lives of Nigerians”.
While adamant about the role of the private sector in the country’s development, Elumelu – a trained economist who began his banking career nearly three decades ago – is mindful of the important role the Nigerian government has to play in order for initiatives to be successful. They’ve already begun taking the necessary steps. In May 2010, the Presidential Action Committee on Power (PACP) was set up, and a month later, the Presidential Task Force on Power (PTFP) was established. A report by the Task Force revealed that Nigerians are among the most deprived of grid-based electricity in the world, with a per capita consumption that is far lower than many other African countries. The reasons are plenty – from bureaucracy, to limited investment in new infrastructure and failing to maintain the old. The impact has been far-reaching.
Nigeria’s current electricity supply sits at around 4 000mw, insufficient for a population estimated at 170 million people. It’s also unreliable, with power outages a regular occurrence in this west African country. This deal then, couldn’t have come any sooner. Nor Transcorp’s plans to invest in relaunching a sustainable railway service. “We don’t have a modern transportation system that can move people. We are looking at ways to change that”, says Elumelu”.
The Commander of the Order of Nigeria (CON) honoree wouldn’t give a timeline on those plans. Government, he says, will need to ensure the right environment to enable the rail to become commercially viable. “We’re focusing on power first, then transport”. Early days it may be, but it’s a promising prospect for the continent’s most populous country that’s in desperate need of keeping up with growing demand in order to keep its development goals on track.