It has been more than two years since Wale Tinubu, Group Chief Executive Officer of Oando PLC, a sub Saharan African indigenous integrated energy group, described as the “plucky young eaglet,” covered Forbes Africa magazine. Back in November 2011, Tinubu ended his first interview with the magazine, saying “Africa is a challenging continent; you fight for water, you fight for food, you fight for shelter. We compete by nature, so it’s always difficult but we don’t always know it is difficult because we have a spirit of survival. Here at Oando, we deliver on the tough things.”
Fast forward to earlier this year, in April, I caught up with the consummate hard-working CEO at Columbia University, where he headlined the annual African Economic Forum as keynote speaker alongside Raila Odinga, renowned politician and the immediate former Prime Minister of the Republic of Kenya. Tinubu talked with me about his latest acquisition, building a billion-dollar company in Africa, diversifying his company Oando PLC and delivering on the tough things.
This exclusive interview appears as the feature story in the July 2014 issue of Forbes Africa magazine as “The Nigerian Oil Baron Buying Up America”.
Farai Gundan: It’s been almost three years since your interview with Forbes Africa. How is the situation now in Africa, from a business perspective?
Wale Tinubu: The business environment in Africa is changing rapidly due to the continent’s transformation. For example, if you look at the politics of the continent, more and more African nations are becoming democratic. There are now very few “life-time” Presidents on the continent. Most African democracies start off shaky – people’s expectations for a better life increase, their aspirations become louder and incessant – then you get a responsive government. On the economic side, one of the primary ways to drive the continent’s economy is using its oil sector. There is a substantial amount of economic growth in Africa being created by indigenous entrepreneurs. The biggest and most exciting aspect for me is the rise of the indigenous entrepreneur who enable capital to flow into the continent and effectively bridge the economic gap by pulling in global sources, technology, knowledge.
Gundan: Regarding political governance, Nigeria in particular and Africa in general, do you think that we are better off now or are we worse off, given some of the current dynamics?
Tinubu: Political governance in Africa is by far, much better than it has been previously. The continent has amazing leaders. Twenty years ago, about eighty to ninety percent of the continent was under military dictatorship. Today, there are only about three or four countries in Africa that do not run under a democracy. The Nigerian government has been quite good, when you consider the strides we have made; the government has definitely tried to create a better environment for the country and for doing business.
Gundan: What is you advice to investors, entrepreneurs, executives and those pursuing their education in the diaspora regarding coming back to Africa and navigating around a lot of the challenges on the ground.
Tinubu: I cannot see you doing twenty percent better in the United States than when you are back in Africa. I say this becausefor example, here in the U.S. you are one more competent executive amongst millions. In Africa, coming from America, you would be something special because you would have first-class education, you would have more corporate exposure and experiences, and you would have lived a first world life. For instance, at Oando, we look for people who are not only intellectually superior but people who have a curiosity and aspiration to understand how things are doing in other markets. In particular, having a “first world” mentality helps in the process of implementing and executing on things and in a manner that you can extract a valuable return.
Gundan: What are some of the core competencies you look for in your top level management and how are you continuously enabling them to adapt to change since Africa can be a very challenging continent to do business in.
Tinubu: First of all, to be in our organization you have to be super smart. I find that people with a certain intellectual capacity are able to deal with problems and challenges that we face. However, just because you are super smart does not mean you will make a smart executive. I also look for people with a “willing” attitude. It may be something as basic as confidence because to be able to deal with the kind of challenges that we encounter, you need confident people. I like people who have a sense of purpose, people who are willing to stand for what is right or wrong. In my experience, I found that the only way you are going to get someone to lead is if they are very knowledgeable in their area of expertise, they are confident and they have a sense of right and wrong.
Often times at the crossroad, the easy decision tends to be the wrong decision. So I look for people who are able to make tough decisions and are able to stick to their decisions. You need to have people who are tenacious, who persevere and not give up. Granted, these are a lot of qualities to have in one person, however in reality those are the qualities that we have required for our people to nurture and grow from level to level. We started 20 years ago with no money and today we are probably an enterprise of USD $3.5 to 4 billion. By the time we complete our latest acquisition, we will have a valuation of USD $6 billion with zero equity; it’s all minds and intellectual prowess of our people. That’s why our company has focused on minds.
Gundan: Let’s talk about your company, Oando PLC. You have been very bullish in diversifying your company’s operations, establishing a footprint along the value chain. How do you prioritize investment opportunities?
Tinubu: Investment opportunities return and certainly return on capital are a priority. I think what you find in Africa however, is that return cannot be your only priority because you don’t necessarily have the opportunity. It’s one thing to have an idea, or a team that can execute and it’s another thing to raise the capital for it. Most of the time, the capital is unconventional. My first loan was at 10% per month in interest and I paid back 120% a year.
Where we started from, the first opportunity we had was delivering fuel to companies who were going offshore to drill (offshore drilling had just started in Nigeria). The only asset we had was an old 1945 World War II tanker–The Carolina which was really slow, doing 5 miles and if the tide was against it, it would go backwards. But we got things delivered on time in an environment where things were always late (drills are late, buses are late). Being able to display first-world perspectives on certain delivery techniques got us a lot of clients. We took risks along the value chain and in most instances had to build the infrastructure, be it pipelines. Additionally we also had to create a regulatory framework which did not previously exist. For example, in Lagos, we built 130 kilometers of pipelines however the existing documentation with the regulator only accounted for 30 or 40 kilometers. We could not let that stop us from continuing to build because if we did not build, demand would be unmet. We decided that we could not allow the lack of a regulatory infrastructure hinder our ability to build further. I learnt that, regulations, particularly in our region, catch up with you as you go along. Most times you have to create an environment by developing the regulatory framework that you are judged by and often times it is an ever-evolving framework.