Chairman of Heirs Holdings, Mr Tony Elumelu on Tuesday in Abuja urged the Ministry of Finance Incorporated (MOFI) to take a long term view in the management of public assets in order to unlock value.
Speaking at MOFI’s Public Wealth Management Conference, Elumelu said a private sector mindset needs to be applied in managing public assets by separating business from governance.
Drawing from the example of Singapore’s state investment vehicle, Temasek, which grew assets from $300m in 1974 to $300bn at present, Elumelu said the Singaporeans realised that government had no business in managing a business that it owned.
This arrangement, he noted, allowed the government to focus on its core role of policymaking and regulations.
Elumelu said Temasek behaves more like a private equity firm that actively manages its investments, engaging with portfolio companies to drive growth and value creation.
This approach, he stressed is what is needed now in Nigeria.
According to him, asset managers need to first set the strategic intent, prepare the milestones, know how you will be judged, and then execute with discipline and the strategic intent in focus.
He listed critical success factors in this undertaking to include leadership capacity, which entails assembling the best in the industry who possess a turnaround mindset to transform the state assets and set performance targets for them; creation of a high-performance environment and a culture of excellence.
Elumelu, who is also the chairman of Transcorp Plc also stressed the need to build a strong governance structure including a strong board with seasoned private sector professionals and an empowered executive management team and balance this with non-executives, who bring objectivity and experience as well as effective risk management practices.
He pointed out that the Heirs Holdings Group has built a reputation as turn around experts going by the examples of its intervention in the defunct Crystal Bank which transformed to Standard Trust Bank and is now part of the UBA Group and Transcorp Plc, which had only one hotel when it was acquired and is now major player in power generation as oil and gas.
He said the group has also partnered with the federal government in unlocking value in the Abuja Electricity Distribution Company (AEDC) and has shown how private sector efficiency translates into profitability and increased prosperity.
Elumelu also commended the Ministry of Finance for the initiative of bringing together the key players and stakeholders to chart a course 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.
