By Francis Ajuonuma
As Nigerians battle with the rising cost of living in the country, Chairman of Heirs Holdings Group, Transcorp Group & United Bank Group founder, Mr Tony Elumelu, says it is time Nigeria copy from TEMASEK approach which Singapore adopted in 1974 to reshape its economy for greatness.
Elumelu, who is also the Transcorp and UBA Group founder, submitted a speech he delivered at the Ministry of Finance Incorporated (MOFI) Public Wealth Management Conference held at the Congress Hall Transcorp Hilton Hotel Abuja yesterday.
The theme of the conference, which was declared opened by Vice President Kashim Shettima, was: Championing Nigeria’s Economic Prosperity.
According to Elumelu, the TEMASEK approach ensures that the government focuses only on governance and allows the private sector to manage state-owned businesses.
The business mogul believes that MOFI has a potential just like TEMASEK and with a mindset of no rush to see immediate profits, it can fully unlock the value contained within state-owned assets.
“When I was told of the subject, I instantly drew a parallel with TEMASEK in Singapore. TEMASEK started in 1974 with the same aspirations as MOFI.
“TEMASEK was established with state-owned assets worth $300 million, today those assets are now worth approximately $300bn.
“How did this happen? In 1974, following independence from the British, the Singaporean government found itself as the owner of a variety of new state-owned enterprises. The Singaporean Government felt that it was necessary to separate governance from business management.
“This stemmed from the principle that it was not the business of the government to operate the businesses it owned.
“This principle led to the establishment of TEMASEK in 1974 to own and manage the assets held by the Singapore Government.”
Elumelu noted that TEMASEK typically owns significant stakes in companies, often with a focus on strategic investments that align with Singapore’s economic development goals.
The Chairman of Heirs Holdings Group stressed that “We need this approach in Nigeria.”
While narrating the turnaround success of the Heirs Holdings Group, Elumelu said the Group is known for how to turn around businesses.
“Our expertise is in unlocking the value in the assets we hold. And our track record speaks for itself. The turnaround of a defunct Crystal Bank birthed into Standard Trust Bank, which is now part of today’s United Bank for Africa (UBA).”
According to him, “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. We are the only African bank with a deposit-taking license in the USA.
“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.”
He further said, “Today, Transcorp plays in the hospitality, power (both in generation and distribution) and in the oil and gas sectors. In Power, we acquired the 972MW gas-fired 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 privatised Power Company to be discharged from post-privatization monitoring having surpassed all set targets by the BPE and the National Council on Privatisation.”
Elumelu explained, “We have partnered with the FG to unlock the value of state-owned enterprises, and we have shown how private sector efficiency translates into profitability and increased prosperity.”
While listing Leadership Capacity as one of the key success factors, he advised the ministry to assemble the best in the industry who possess a turnaround mindset to transform the state assets and set performance targets for them.
Other key success factors he listed include creating a high-performance environment, a culture of excellence, corporate governance, risk management, and non-interference in management.
Elumelu commended MOFI for setting out these goals, for looking widely for models and approaches, as well as for bringing a private sector mindset to the stewardship of public assets.
