Olusegun Adeniyi
Last Saturday, I was at an Afreximbank event in Abuja where Mr. Tony Elumelu and Dr. George Eronbi put pen to paper on what has become a historic $750 million financing deal for Heir Energy. As I watched the ceremony unfold, I couldn’t help but think of the entrepreneurs who complain about the lack of funding for “serious businesses” in Nigeria. “The money is not there,” they asserted with the conviction of someone who had tried every door and found them all locked. Well, that’s $750 million, real money put into African businesses by African financial institutions. This was a calculated investment in a company that has demonstrated performance, governance and industry-changing vision.
The numbers tell their own story. When Heir Energy took over Oil Mining Lease (OML) 17 from Shell, Total and Eni, production was 25,000 barrels per day. It now exceeds 50,000 barrels. The company’s chief financial officer, Samuel Nwanze, said the plan is to increase gas production to 250 million cubic meters, reaching 100,000 barrels per day within three years. These are not pie-in-the-sky predictions, but goals backed by proven operational ability and discipline that allows financiers to feel comfortable parting with large sums of money.
At the ceremony, Elumelu was characteristically candid about his journey. He spoke about the delays his company faced in acquiring OML 17 under President Muhammadu Buhari. Buhay’s government stalled his efforts on the grounds that the assets were “too large to be owned by the private sector.” The irony, as he also pointed out, is that Shell itself is a private company. Mr Elumelu said these delays had resulted in huge economic losses. However, Heir Energy never fulfilled its obligations even as it battled the severe oil theft that has become an unfortunate feature of Nigeria’s energy sector.
Elumelu was full of praise for Afreximbank, calling it “Africa’s most influential and catalytic financial institution.” He spoke about the trust, track record and discipline required to maintain partnerships with institutions that put money where innovative projects exist. “If your financial institution supports you, the least you owe to your financial institution is to perform,” he said. This is a simple truth that will resonate with all aspiring entrepreneurs. Access to capital is another thing. The credibility to deploy it effectively is something else entirely.
Mr. Eronbi emphasized that Afreximbank’s confidence in Heir Energy is built on proven leadership, governance and asset quality. He added that the transaction is in line with the bank’s mission to support Africa’s champions in driving sustainable economic transformation. And therein lies the important point. This means that African institutions have the capacity and desire to support African companies. What they are looking for is a profitable project led by a team they can trust. In fact, I was stunned when Elonbi openly encouraged Dr. Owen Omogiafo, President and Group CEO of Transnational Corporation Plc (Transcorp), to come up with an idea that would help him expand across Africa and promised funding. “Oh!” exclaimed an excited Elmel with a big smile. But bank executives don’t play Father Christmas with money. They must have seen value in the relationship with companies backed by Elumelu, who said he prefers, in principle, to raise funds from outside the Union Bank of Africa (UBA), of which he is chairman.
I may be a broken gramophone on this issue, but I will never stop saying that what Nigeria needs are more risk takers who are willing to bet big on the country’s potential, rather than making easy money through trade, property speculation and import dependence. In this same country, some may still remember a young man who, despite having access to the authorities of the oil and gas industry, instead of investing, bought a yacht and spent all his time and money transporting supermodels around the world.
What Elumelu and his team have done with Heirs Energies is beneficial. They have identified critical sectors, acquired strategic assets, navigated regulatory complexities, and built operational excellence. The $750 million Afreximbank facility proves that if you get these basics right, the money will come. The broader lessons extend beyond Nigeria. Across Africa, we hear lamentations about the lack of capital for meaningful development. But Afreximbank alone has assets of over $40 billion. Add to this the African Development Bank, the continent’s sovereign wealth funds, pension assets and private capital pools, and the picture becomes clear: there is money in Africa. What Africa urgently needs is more entrepreneurs with the audacity to dream big, the ability to execute, and the integrity to maintain the trust of investors.
As Elumelu said at the ceremony, “This is Africa financing Africa’s future.” This is a powerful statement, challenging the narrative of perpetual dependence on Western capital. But for this story to become reality, governments need to create an enabling environment. The regulatory delays that Heir Energy faced should never have happened. When private sector actors demonstrate their capabilities, governments should facilitate rather than frustrate them.
As I left the venue, I thought about the entrepreneurs who claim they don’t have money. Perhaps the real question is whether they have a compelling enough project to attract it. The Heir Energy and Afreximbank deals prove that when African entrepreneurs bring profitable mega-projects to the table, African capital will back them. Finance is there. What we need is more people willing to take risks.
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