Onome Amuge
Tony Elumelu, the chairman of Heirs Holdings has advised the Ministry of Finance Incorporated (MOFI) on the importance of long-term thinking and value creation to position MOFI as the strategic institution that will support the Federal Government’s efforts to address economic challenges and drive growth in the Nigerian economy.
In addition to long-term thinking and value creation, Elumelu identified a number of other key factors that are essential to MOFI’s success. These include; leadership capacity, a high performance environment, a culture of excellence, as well as the need for strong corporate governance and effective risk management.
Speaking at the MOFI public wealth management conference, which took place at the Transcorp Hilton Hotel in Abuja, Elumelu expressed his belief that MOFI can play a vital role in supporting the Nigerian government in its efforts to address the country’s economic challenges and stimulate growth.
The UBA Group chairman noted that the private sector takes a long-term approach to creating value from its assets, emphasising that it is important for MOFI to adopt a similar mindset when managing its assets. He said that the ministry should be patient and allow the value to be created over time, rather than focusing on short-term profits. He also stressed the importance of establishing a clear strategic intent, setting milestones, and knowing how progress will be measured.
Elumelu cited the example of Temasek, a Singaporean investment company, to illustrate how MOFI can create value from its assets over time. According to him,Temasek was founded in 1974 with state-owned assets worth $300 million, but the company’s assets are worth $300 billion, thanks to a long-term strategy and disciplined approach.
Elumelu noted that the Singaporean government established Temasek to separate the business management of state-owned assets from government governance. This, he explained, stemmed from the principle that it was not the business of the government to operate the businesses it owned,which allowed the government to focus on its core role of policy making and regulations.
He noted further that Temasek’s success has been driven by its investments in strategic sectors of the economy, such as transportation, industrial, financial services, technology, telecommunications, real estate, and consumer goods
In his words, “Temasek typically owns significant stakes in companies, often with a focus on strategic investments that align with Singapore’s economic development goals.
Temasek also actively manages its investments, engaging with portfolio companies to drive growth and value creation.
Meaning that they are not a passive investor that sits back but more like a Private Equity firm that works closely with management to unlock value. We need this approach in Nigeria.”
Elumelu also highlighted the turnaround success in the Heirs Holdings Group,pointing out that the company has become well-known for its ability to turn around struggling businesses. He credited the group’s success to its expertise in identifying underperforming assets and unlocking their value.
According to Elumelu, the turnaround of a defunct Crystal Bank birthed Standard Trust Bank, which is now part of today’s United Bank for Africa (UBA).This, he stated, was not a state-owned enterprise but the same principles for turnaround occurred here.
The Heirs Holding chairman explained that Heirs Holdings Group, in partnership with the Federal Government of Nigeria, has been able to unlock the value of state-owned enterprises, such as Transcorp Plc. He noted that the partnership has demonstrated how the private sector can bring efficiency and profitability to these enterprises.
he concluded his remarks by commending MOFI for its clear vision and goals, and for its willingness to look to the private sector for best practices. He also stressed that MOFI must focus on the long-term and be committed to excellence in all areas, including corporate governance. He highlighted the importance of execution, with a strong focus on value creation, to ensure that MOFI achieves its objectives.
“Our Group stands ready to support and partner with MOFI in whatever way we can to ensure that this initiative is a long-term success.
Times are hard for Nigerians everywhere and we must come together and act in unison to catalyse significant socio-economic development for Nigeria and all our people.
I am assured that this team of professionals under the leadership of Dr. Armstrong are more than capable to lead MOFI on this journey,” he added.
