A Conversation with Tony Elumelu

The private sector has an important role to play in helping entrepreneurs transform the African continent.

May 24, 2022

Meet Tony Elumelu, a Nigerian businessman, billionaire, investor, philanthropist, champion of African entrepreneurs, and steadfast believer in luck. Hear how and why he’s committed to catalyzing entrepreneurship across the African continent.

Ask almost any entrepreneur about their secret to success and more than likely they’ll credit a combination of hard work and luck. Elumelu is no exception. After an illustrious career running Africa’s largest bank, United Bank of Africa, and currently serving as its chairman, Elumelu says he decided “to commit the second phase of my life to helping, to impact humanity, to helping democratize the luck that I had growing up, to help expand access to opportunities.” And he has done just that, funding thousands of early-stage startups and empowering more than 15,000 entrepreneurs across 54 African countries to solve the continent’s biggest problems.

Elumelu says, “I’ve come to appreciate the significance and importance of entrepreneurship in transforming families, in transforming communities, in transforming countries, societies, and humanity.” He strongly believes that the private sector has a role to play in developing the continent and making that transformation possible.

Listen as Stanford student Chisom Obi-Okoye interviews Elumelu about his career path, philosophy of African capitalism, and vision for the future of the continent.

Grit & Growth is a podcast produced by Stanford Seed, an institute at Stanford Graduate School of Business which partners with entrepreneurs in emerging markets to build thriving enterprises that transform lives.

Hear these entrepreneurs’ stories of trial and triumph, and gain insights and guidance from Stanford University faculty and global business experts on how to transform today’s challenges into tomorrow’s opportunities.

Full Transcript

Tony Elumelu: I wasn’t the most intelligent in my class, I wasn’t the most hardworking, and therefore there must be luck in it that I’m who I am, what I became.

Darius Teter: There aren’t many billionaires like Tony Elumelu, who are both humble about their origins and committed to inspiring future billionaires.

Tony Elumelu: And I thought it was time to commit the second phase of my life to helping, to impact humanity, to democratize that luck that I had growing up, to help us expand access to opportunities.

Darius Teter: At Stanford Seed, we believe that when entrepreneurs succeed, everybody benefits. Their wins ripple out to customers, employees, and communities. And that’s why we give entrepreneurs the tools to grow and scale their companies, because these businesses create sustainable wealth that can change the lives of many. That’s a vision shared by Nigerian investor and philanthropist Tony Elumelu, named one of Time magazine’s 100 most influential people in the world for 2020.

Tony is the chairman of United Bank for Africa and the founder of the Tony Elumelu Foundation. Through the foundation, he empowers entrepreneurs across the continent to solve Africa’s biggest problems while creating economic and social value for their communities. Since it was established in 2015, the foundation has trained over 15,000 entrepreneurs across all 54 African countries.

On this special episode of Grit & Growth, we’re sharing a discussion between Tony and Stanford student Chisom Obi-Okoye that took place as part of Stanford’s View From The Top speaker series. Together, they explore his philosophy of African capitalism and his vision for the future of the continent. So without further ado, here are Tony Elumelu and Chisom Obi-Okoye.

Chisom Obi-Okoye: Hi, Tony. It’s so great to have you here. Thank you for being with us today.

Tony Elumelu: Good to meet you, too.

Chisom Obi-Okoye: You are one of the most celebrated and most decorated business leaders in Africa, and, I would posit, the world. So it’s truly an honor to be able to host you at Stanford this afternoon.

Tony Elumelu: Thank you very much.

Chisom Obi-Okoye: We watched a video earlier where we learned a little bit about the foundation, which we’ll speak about towards the later half of the interview, but we saw there that you are such a supporter and such an advocate of entrepreneurship, which isn’t really a surprise, because your parents were entrepreneurs. I’m curious to know how seeing them build businesses at a young age influenced you and impacted your journey.

Tony Elumelu: I’m pleased and honored to be with you all today. Stanford, great university. A team from this great university visited the Tony Elumelu Foundation before the pandemic, I think, and I was quite impressed. They were on time, in spite of the chaotic traffic situation in Lagos. And the research work, also very, very impressive. So for me, coming back here, such an honor. I have a great impression of your school.

Entrepreneurship is in my DNA. I preach entrepreneurship. I encourage entrepreneurship. I also try to catalyze more entrepreneurs in Africa, because in my own life journey, I’ve come to appreciate the significance and importance of entrepreneurship in transforming families, in transforming self, in transforming communities, in transforming countries, societies, and humanity in turn. And when we founded the Tony Elumelu Foundation, it was driven by the need and urgency to help catalyze development in Africa, the skill that’s sustainable, realizing further that entrepreneurship is a way to that.

And I’ve come to realize that this journey of entrepreneurship, not just entrepreneurship, everything in life, discipline is critical for success. And I’ve come to see, and I preach this too, that the journey entrepreneurship is not a linear journey, it is up and down, but if you’re tenacious, if you’re resilient, you cross the finishing line. So those are part of the early learnings from my parents. My mom, my dad, long ago told us, and it resonates in my brain to date, that if you earn a dollar and you are unable to save, if you earn a billion dollars, you will not save anything. So that for me is the first lesson in capital formation. Capital formation starts from savings. If you do not save, you don’t have money to invest. If you don’t invest, you remain where you are. And so these lessons have helped me in this journey of entrepreneurship.

Chisom Obi-Okoye: So let’s fast forward a few years. You graduate from university with a bachelor’s and a master’s degree in economics. You then proceed to become one of the youngest bank branch managers in Nigeria, typically a job reserved for people who are in their fifties or sixties. You become the managing director of one of the biggest banks in Nigeria. And then 2005 comes around, and you are being asked to help lead what becomes the biggest merger in Nigeria’s corporate history. What were some of the challenges that you faced during that time, and which leadership principles did you stay rooted in as you were guiding this process?

Tony Elumelu: So first, you saw United Bank for Africa is almost 70 years old as an institution, and kept in set ways of doing things. We were coming from a bank that was so strong, savvy delivery and technology, young people, etc. So a bank with size of less than 1,800 people, and the United Bank for Africa had about 12,000 staff. These 1,800 younger, technologically advanced, and this other one, older, and very big bank. So it was not easy integrating, because as you see, corporate mergers, the legal combination is not the issue. The difficult part is the people integration, the culture integration.

And if you can see from history, most corporate institutions, it takes so many years to integrate people and culture. And if you do not integrate people and culture properly, you lose the major value levers. And so we were mindful of this and wanted to make sure we were able to merge, integrate. And this is a financial institution that was like, you merge, they want customers. Don’t care whether they want to be served. Same institution. They move them. It was tough, integrating our people, merging our people, merging cultures, old culture, set in their ways, and a vibrant, younger culture.

But therein lies the interesting aspect of the combination of the job. I say to people, my elder brother, who is seven years older than me, he doesn’t have gray hair. I have gray hair. My gray hairs are there from the company merger, because making it work, serving your customers, making sure that everyone in the universe of the institution, which was we had 428 branches at the time, that it was same level of service across both. Customers of Standard Trust Bank, they were used to a certain level of self delivery. You would not want them to come to the new institution and have a drop.

So we just had to make sure that service, we put our customers first, and that’s why today United Bank for Africa, which interestingly has grown from a one-country bank to a bank that operates in 20 African countries, with presence also in Paris, London, recently Dubai, and the only African bank that operates in U.S. as a deposit checking institution. Today, United Bank for Africa serves over 35 million customers in Africa, and still growing. We’re helping to simplify payments on the continent. We’re helping to orchestrate trade transactions, inter-Africa trade transactions.

Prior to this time, Africa did not trade with and amongst itself. We believe the reason Africa didn’t do this is payment issues because of infrastructure and, most importantly, financial inclusion, trying to make sure that everyone, a continent with over one billion people, the banking population is not so high. So to us, it’s not just about banking itself or offering banking services. It’s about what we call democratization of access to financial services. It’s about financial inclusion. So making sure that almost everyone in markets where we’re operating has access to banking facilities. We believe that in Africa, we have informal economy that is very large, and all of us should be involved in trying to formalize the informal economy.

Chisom Obi-Okoye: You alluded to this a little bit earlier. There’s a lot of innovation happening in the financial services industry, a lot of tech disruptors, many of which are working towards that goal of democratizing access to financial services. How do you see the company collaborating or even competing with some of these disruptors, particularly thinking about new technologies like cryptocurrencies, peer-to-peer payment, etc.?

Tony Elumelu: For us, or for me at this point, not so much of a bank, however. As a group, we realize the importance of technology. These two disruptions that we see in the world are real. And in Africa in particular, thanks to the population of our continent, we know that we have to catch up. If we don’t catch up, we’re going to be left behind. And for businesses, they don’t need a bank. They don’t need a facilitator for payments. They need a [system] that follows their lifestyle. And banking is changing. It’s changing from the way we used to know banking so many years ago.

I tell you, our United Bank for Africa. I told you earlier that we have 35 million customers. All of 2004, UBA celebrated, we were the first bank in Nigeria to have 32 ATMs — 32 ATMs in all of Nigeria! A major marketing tool, that we have 32 ATMs. And then, 97 percent of our customer transactions are called in the banking hall. Today, UBA opens about 500,000 accounts every month, and these accounts, 95 percent are opened online, not in the banking hall. So things have changed. And by the way, we’ll change further. I mean, technology is disrupting a lot of things, not just in the U.S., not just in the West, but everywhere. So we live in a new world, and every one of us is adopting, and adapting faster to the new world, or we will be left behind.

Chisom Obi-Okoye: You mentioned energy a little earlier, which makes me nervous, because it seems as though you’re reading my mind, because that’s where I want to go next. Last year, the Africa Energy Chamber recognized you as one of the 25 most influential individuals in shaping Africa’s energy sector. I’m curious to know, especially knowing that at Stanford sustainability and renewable energy and energy more broadly is a really important subject that gets studied here and talked about a lot, what are the most pressing issues and solutions being discussed right now as relates to energy in Africa? And also, I would love to know a little bit more about the work that you’re doing, I believe through Transcorp, to address this.

Tony Elumelu: Access to electricity is extremely poor in Africa. Less than 35 percent of our people have access to reliable electricity on the continent. This is why most … I’m sure at Stanford, you might have seen this in your business research studies, that most small and medium-scale enterprises on the continent die. They don’t succeed. And single most important factor for this, due to poor access to electricity. So to us, as a group, we believe in the concept and philosophy of Africapitalism, which is a call on the private sector to play some role in developing our continent.

There is a realization that the private sector has a role to play in developing the continent. And in practicalizing this, and not just speaking to it, we decided that the power sector was critical for us to invest in, and so we mobilized our resources and invested in this space. So as the world mobilizes towards a more inclusive society, the world mobilizes through a more prosperous world. I always like to remind people that we cannot have that prosperity across the world if we do not deal with the issue of access to electricity on the African continent.

So it’s a major … For me, it’s not just an investment, a commercial investment, it’s what we should be doing in the 21st century, to have improved access to electricity. Those who have capital should look at investing in Africa. There are opportunities there. And those who have voices, let’s keep shouting to attract attention of those who have deep pockets so that collective [action] can make a difference in Africa.

Chisom Obi-Okoye: I want to spend some time on what you mentioned earlier, Africapitalism, which you are known across Nigeria and other countries as well as being a strong proponent of, and you’ve detailed here. I’m curious to know why you believe that Africa needs to take a unique approach to capitalism.

Tony Elumelu: Well, it’s not a unique approach to capitalism per se. It is for me a realization … Okay. At times, there’s this entitlement mentality that people have, “We should be helped. We should be supported. We should be developed.” But for Christ’s sake, I mean, it can’t be like that forever. We need to help ourselves too. So it’s a realization that, come on. The private sector has also grown, is growing. We need government to prioritize. We need government to create the right environment for the private sector to keep doing well, but the private sector also must be sensible and reasonable and conscientious in how we do things.

We should invest in a manner that helps to catalyze prosperity, which means invest in a manner that helps to create social equity, social wealth. We should invest in a manner that helps to create inclusiveness. So this is not just about a new form of capitalism or the other. It’s more about the fact that the private sector should play a role in helping to develop the economy. Let’s stop blaming others for our woes. Let’s stop blaming others for everything. Let’s lead, and hopefully they’ll follow.

And I’ve seen it happen, in advanced society, again, the meeting I attended earlier, it all had different names today. Patient capital, impact investing, shared prosperity, mutual destinies. We just need to invest in a manner that’s not just about profits for the investors. We should invest in a manner that creates mutual benefits for everyone, for investors, for communities where you do business in, for society at large. The fact that we do what we do at the Tony Elumelu Foundation, committing 100 million U.S. dollars to supporting Nigerian and African entrepreneurs, is not because we have so much money, but we also know that some of the basic needs we want to have are provided.

So when we say we’ll give non-refundable seed capital of $5,000, and when we do so, and to date over 15,000 Africans have benefited from that program, it is not to encourage laziness. No. But we know when San Francisco, where in tech environment, we know some started with less than $5,000, but today they’ve grown big. So we just want to give young Africans access, opportunity, opportunity to prove their concept. Instead of people keeping their monies in bank accounts abroad, why don’t you bring your money to invest into something on the continent? You make more money, but you also impact society in a more positive way. That is the entire essence of it.

Chisom Obi-Okoye: Now, Tony, typically when people retire from very high-stress jobs, such as being the CEO of one of the largest banks in Africa, they take a vacation. You instead decided to found a company, Heirs Holdings, and also the foundation that you’ve alluded to. This was a few years ago. I’m curious about what you saw happening in Nigeria or beyond that, at that time, that was the impetus for you to develop this foundation.

Tony Elumelu: We did two things. When I retired in 2010, 12 years ago, we decided to create a family office, which was, to some extent, novel in our part of the world. And we said the family office will be quite catalytic in the kind of investment that we make. Hence, this philosophy of Africapitalism, and decided the sectors are considered very important that could help to move the needle. Power. While Nigeria and Africa are endowed with a lot of resources, yet we do not have the ability to process all of this and convert them to the state that they can become valuable to our people. So we said energy, from an integrator point of view and across the value chains. We looked at health care sector, and we said health is important, that we need to invest in health care sector. And so far, so good on that.

The second thing was the foundation. I thought that my story has been one of this element of luck in my story, this element of being in the right place at the right time. I wasn’t the most intelligent in my class. I wasn’t the most hardworking. And therefore, there must be luck in it, that I’m who I am, what I became. And I thought I had risen very rapidly, done quite a lot, and I thought it was time to commit this second phase of my life to helping to impact humanity, to democratize that luck that I had growing up, to help expand access to opportunities.

And I’ve been inspired by what I see around the world. You look at Steve Jobs, for instance, and his background. And I asked myself, if Steve Jobs were an African, if he was an African in Nigeria, would he have been able to succeed at the scale and magnitude I succeeded? So it is all of this that drove me to say, no. I don’t know what I would say to God if I do not create or have to create more Tony Elumelus on the continent of Africa in the first instance. And that was what drove my wife and I at the time to decide that we should commit 100 million U.S. dollars to helping to identify, support, and empower the next generation of African leaders and to do it at a scale and magnitude that’s never been done before.

Chisom Obi-Okoye: My final question for you: You seem to be a nation in and of yourself. Through the foundation, you’ve worked with local governments, international governing bodies, to help move capital where it’s most needed. And so I’m sure you’ve heard it asked many times before. Nigeria is now in its election season. I will join the chorus. Why aren’t you running for president?

Tony Elumelu: Oh, wow. I didn’t see that coming. I think first is, when I look around, I know the potential that we have as a continent and as a people. I see opportunities. I know that life can be a lot better for people. And oftentimes, you feel the urge to show interest in how we are governed and how things happen. I realize also that all of us cannot be in the political space, but I know that evil succeeds or thrives in the world when good people keep quiet. So I say to myself, just the way I’m committed to entrepreneurship, the way I’m committed to helping to empower young Africans, we should support emergence and orchestration of good governance across the continent.

Because I think that is what has held us down, as Africans. So for me, it’s not just about Nigeria. It’s about many countries, many countries on the continent. So I am interested in good governance, and I know that what we preach and advocacy and everything we do, trying to encourage young people, will not succeed in the political space, leadership is not good. So mine is for us to continue to encourage the evolution of the political process that we want through our good leadership, and two, ensure that our leaders stay accountable.

That process is not there yet, but we are working together. And again, it’s one area when I was in Washington, I said that it should be a concerted effort. We should encourage people on the continent to do what is right, even as we also, from the continent, continue to speak on behalf of good governance and accountability.

Chisom Obi-Okoye: That was amazing. Thank you so much.

Darius Teter: We at Stanford Seed applaud Mr. Elumelu’s efforts to create opportunities for Africa’s next generation of entrepreneurs. There’s a lot to learn from Tony’s decision-making process, like how he approaches disruption and invests in Africa’s future. If you’d like to learn more about the Tony Elumelu Foundation, visit the link in our show notes. And if you’re interested in hearing more talks like this one, View From The Top has its own podcast feed and is also available on YouTube.

This has been Grit & Growth with the Stanford Graduate School of Business, and I’m your host, Darius Teter. If you like this episode, leave us a review on your podcast app. And again, if you are a business owner in sub-Saharan Africa or South Asia and you’re looking to grow your company exponentially, be sure to apply for the Seed Transformation program by June 1. Visit stanfordseed.co/apply to learn more. We hope to see you in the classroom in the new year.

Grit & Growth is a podcast by Stanford Seed. Laurie Fuller and Erika Amoako-Agyei researched and developed content for this episode. Kendra Gladych is our production coordinator, and our executive producer is Tiffany Steves, with writing and production from Andrew Ganem and sound design and mixing by Alex Bennett at Lower Street Media. Thanks for joining us. We’ll see you next time.

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