Tony Elumelu, the billionaire founder and Chairman of Heirs Holdings, with interest in United Bank for Africa, Transcorp and Heirs Oil and Gas, has been on Twitter twice in recent months to lament the deplorable state of the country. It is certainly not every day you come across a billionaire directly calling out specific government policies and failures. Nigerian businesses “respect” government so much they don’t even invest in think tanks that would advocate for economic policies that would make their investment more profitable and the national economy stronger.
“Why are we paying taxes, if our security agencies can’t stop this?” Elumelu asked in the thread. This is the same question many tax-paying Nigerians have been asking for years now”.
“Nigerian billionaires have to forge creative alliances with citizens, think tanks, civil society groups, and invest in improving economic policy and governance in the country…. Doling out $5,000 to “entrepreneurs” is not a substitute.
Elumelu’s newfound public social media activism is not unconnected to his new investment in the oil and gas sector, an investment that is being sabotaged by the poor security of pipelines in the South-South region. The banker’s oil and gas outfit, TenOil, has in the last 5 years or so invested a fortune in buying assets from the international oil companies, including a $1.1 billion investment in purchasing Shell’s interest in Oil Mining Lease (OML) 17.
Tony Elumelu’s March 17th Twitter thread leads with a tweet empathising with his colleagues at the office who were “bemoan(ing) the very pressing issues that they face every day in this country, and how things have been getting worse and worse- no electricity for 5 days, hike in the price of diesel, frightening food inflation, etc.”
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This is something I can also relate to as I have used this column to repeatedly highlight the problems Elumelu mentioned. In fact, on that same day, he wrote his thread, my family and I were battling a lack of water brought on by a week-long power outage in our neighbourhood. In fact, we ended up buying water in plastic kegs on the 18th of March. So much for my illusions of having finally become part of the new middle class!
Elumelu’s thread quickly got to what I consider his main point which is insecurity affecting his business in the Niger Delta. In May 2021, Elumelu had acquired OML 17, with a proven and probable reserve of 1.2 billion barrels of oil and daily production of 27,000 barrels which the company planned to triple.
However, moving crude oil from where it is extracted to where it is put onto ships to take it out of the country requires a network of pipelines across the oil-rich region of Nigeria. In recent years, these pipelines have been subject to industrial-grade theft. In his tweets, Elumelu lamented that more than 95% of the oil that should normally go to Bonny Terminal, for example, is stolen along the way.
Two insiders in the oil and gas sector told me that a certain pipeline was losing up to 99% of its oil and had to be temporarily shut down as it didn’t make sense for the owners to keep pumping oil for thieves. This is one of the reasons why Nigeria’s oil production has been below available capacity and projected level for months now. We simply can’t get all the oil we are producing to the terminals without a good chunk of it being stolen. At this point, it is fairly possible that the criminal syndicate behind the theft is the largest “oil company” in Nigeria today.
“Why are we paying taxes, if our security agencies can’t stop this?” Elumelu asked in the thread. This is the same question many tax-paying Nigerians have been asking for years now. Wealthy and connected Nigerians like Elumelu usually insulate themselves from Nigeria’s insecurity by monopolising police resources, making them blind to the reality on the ground. But the problem of oil theft is more than what billionaire-owners of oil wells can solve by mobilising the police commissioners in the region. The level of theft can only mean the involvement of powerful people at the height levels of government and society. The level of logistics required to move the stolen oil makes it impossible for people in authorities not to know.
“Everybody will eat breakfast” is a common refrain on social media which means that a bad situation will eventually affect everyone. The bad situation of insecurity and government corruption enabling it has now come to bite our billionaires in their backside, proving once and for all that insulating oneself from a problem in the society instead of helping to solve it is not in anyone’s long-term interest. It is in the self-interest of us all to work together to solve our problems. To save Nigeria (and their businesses) Nigerian billionaires have to forge creative alliances with citizens, think tanks, civil society groups, and invest in improving economic policy and governance in the country. Even if our primitive and vindictive politics cannot yet allow them to openly associate with or promote politicians with an agenda for economic growth. Doling out $5,000 to “entrepreneurs” is not a substitute.
