Dokun: Private Capital is the Future of Infrastructure Development
“Currently, I am the founder of a company with co-partners and shareholders. I have a background in engineering as I trained as a mechanical engineer. I have worked in IT, network optimization, media, and web solutions providers. Until the founding of Advent in 2015, everything I have done revolved around providing solutions. Aside from providing solutions, I have been interested in infrastructure. We have organized events centred on investment promotions, and that’s where this desire was borne.”
What does your company do?
Advent Integrated Services Limited is a foremost infrastructure development and renewal company in Nigeria. Our focus has been on the health, education, and sports sector for a long time. We’re currently expanding into infrastructure support services to the energy sector.
Most Nigerians perceive infrastructure as railways, roads, and bridges. Nobody has seen a sign saying, “this express was constructed by Advent.” What kind of infrastructure do you build?
You are right about the perception of infrastructure being roads, bridges, and power. However, that’s only a component of the infrastructure. Other infrastructure services exist. For instance, bridges do not exist in universities. Instead, they need classrooms and hostel accommodations to support educational services. At Advent, we build hostel infrastructure for tertiary institutions.
Bridges do not exist in the healthcare sector as well. So, we build key healthcare services concerning cancer care, especially radiotherapy. The government needs to declare a state of emergency for cancer care. With a population of over 200 million, cancer surveillance in Nigeria is increasing. There is a yearly record of 70,000 new cases of cancer. Chances are high the numbers are more as many persons do not visit the hospital for early detection, making them unrecorded.
Because of accumulation over the years, 200,000 cancer patients may need cancer care from chemotherapy and surgery to post-chemotherapy (radiotherapy). There are only ten functional therapy centers in Nigeria, and a center can treat more than a thousand patients only in one year. That would lead to approximately 10,000 treatments in a year. However, there are over 70,000 in need of radiotherapy services. As a result, we see Nigerians travelling to North Africa and India for treatment and radiotherapy. Sometimes, these treatments take at least three months, and the whole experience is money-draining.
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We have recognized the gap and realized that deploying resources into that sector would help stop the dollar drain on Nigeria’s economy and provide appropriate care locally to Nigerians. This would make cancer care more accessible to people. Though it is just a drop-in-the-ocean kind of result, it still counts.
We also recently began work on local infrastructure support services in the oil and gas sector. We are exploring providing services to facilitate investment into more critical assets. In essence, we are mitigating by offering services for reoperations to support staff and onshore facility that enables them to birth, load, and leave.
We have identified these gaps, making our infrastructure more public and private, not for bridges and roads. It is an area we may venture into if it becomes more viable. Areas like this are more of a social service than commercial, and we don’t have the strength to fund that.
Is Advent a social infrastructure delivery company?
Presently, many interpret us as a social infrastructure delivery company. Of course, energy is also a social infrastructure to a large extent because power is part of energy. Instead, our focus is on projects with social impacts. I prefer this description because social infrastructure sometimes implies that an organization is a social enterprise or non-profit, which we aren’t.
We are a commercial organization focused on profit and projects that create social impact.
What’s the value proposition plan for you as an investor? Is the demand large enough and effective to pay for investments? What’s the social value to the country, the government, and the people?
I’ll start with the impact, the benefits to the government and the people and then speak on the value proposition data.
We are focused on bridging a gap regarding impact and how the government can benefit from that. The government is currently unable to fund some of the things we invest in. Instead of delivering services at subsidized costs, we save people money, stress, time, foreign exchange, and distance from travelling abroad in search of infrastructure and services. Our work focus is on saving costs.
We’ve subsidized costs by allowing individuals to have local care readily available. Regarding affordability, we are in partnership with one of the partners developing products like HMOs for people with insufficient funds to access cancer care. The beautiful thing about HMO is that you enjoy 20 times the value of whatever you pay. This way, healthcare is affordable.
Even if you can afford to pay, HMOs make care easily and readily accessible. This way, anybody can visit the facility and return to their home without being out of work for more than a day. This benefits the government in meeting its objective to deliver qualitative healthcare to the populace. This would impact both the people and government regarding value proposition to the investor.
Is it viable because there’s a building where doctors can perform their jobs, and you provide the necessary mission equipment and materials?
The physical infrastructure is very important. We build capacity for healthcare workers in government hospitals by conducting free training. This occurs in government-owned hospitals, increasing the ease with which patients get treatment. It is a win-win situation for both the government and us.
Regarding value proposition to our investors, we’re always looking for patient capital. This poses a challenge as patient capital is mainly long-term as opposed to available money in Nigeria, which is short-term. However, several investment banks exist that indulge in long-term lending in Nigeria. After a thorough market evaluation, we are now in close cohorts with investment banks and investors with patient capital.
Worth talking about is the socio-cultural behaviour of Nigerians. It would be a mistake to judge an individual by their income. A man may earn a salary of N400,000.00 but be worth more than that. He may be worth a million naira because he has a social capital of N600,000.00. In economics, this is referred to as transfer, a situation where an individual enjoys resources for free.
Therefore, when an individual is sick in Nigeria, he may be able to obtain funds for treatment from family, friends, social media, and even foes. It is how many Nigerians pay their children’s school fees, pay for health services, and many more. So, we must recognize transfer. Effectively, this helps people pay for healthcare services.
Investors, therefore, want guarantees and concrete answers concerning questions concerning their investment. For example, they may ask, “how long can the equipment last, and how many patients can it treat in its lifespan?” If it can only last five years, by Nigerian standards, repayment for that equipment and the infrastructure cost is short-term. This translates to commercial viability. The fee is low compared to a region like North Africa, albeit viable. The business, therefore, can operate, pay its debts and deliver a good quality service.
Through your capacity building, are you are saying there won’t be any quality loss receiving treatment here in Nigeria than in India or North Africa?
This is critical as it relates to confidence in healthcare. Trust in the primary caregiver is of utmost importance. A person will only visit a facility if they are confident they will receive the best treatment.
We are organizing an EMS training where experts will work with us for one-year post-installation and commissioning. Aside from training, they would also be a part of operations. The whole process is designed so that you would get the same results here as you would in France, India, or North Africa. Our key staff members will also undergo training to take over. We cannot afford to hire people from overseas when talented folks can undergo training here and deliver better results. It is very similar to technology transfer.
Furthermore, we have a service-level agreement with equipment manufacturers. This was enacted to maintain and enforce existing standards. This way, people are met with good service delivery and can trust in the capability of the facility staff. From the doorstep, until they meet the healthcare professionals, they would recognize the world-class standard of the facility they are to receive care.
What is the link between your work and the evolution in Nigeria’s healthcare system, which is people using insurance to pay for healthcare? Will insurance go forward? And where will there be special products?
The answer to that is straightforward. Whenever people travel to other countries, they are charged a premium for their healthcare services. This is in stark contrast to residents who pay next to nothing. Insurance makes this possible. In the UK, National Health Insurance exists, and people keep contributing to a pool that anyone can draw on when they need healthcare services. This is why the NHS can deliver services for free or subsidized. Millions of people contribute to the pool to pay.
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Most people think it is free. However, the reality of things is that someone pays for it. If you were to undergo nationalization in the UK, you would be charged a fee for the NHS. It is like a health insurance scheme.
The HMO industry in Nigeria has grown substantially over the past few years. One key to sustaining healthcare in Nigeria is the government vehicle of the NHIS, i.e., the National Health Scheme. The law enforces corporate organizations to pay insurance premiums on behalf of their staff. These are the things we are working on leveraging. Some of our partners have cancer care as one of their primary offerings.
Imagine a pool of a hundred thousand people subscribed to their product, and out of them, 1% have cancer. That 1% can enjoy cancer care treatment because 99% paid for it. That makes it affordable and sustainable. The industry is also rapidly growing.
Few HMOs offer cancer care treatment, but recently, detection has become part of their offerings. In no time, it will extend to cancer treatment. This is because cancer care has multiple levels of treatment. Soon, chemotherapy will become a part of the HMO’s offer, depending on the package subscription.
In no time, people will have easy access to affordable healthcare. As the country’s economy increases, people will have more disposable income. Once people can trust the credibility of HMOs, they will be willing to pay more for them.
Where did the vision to start Advent, advancing to social infrastructure and healthcare delivery, come from?
Every startup vision is borne out of a need. I have had experiences in several sectors. Currently, I am the founder of a company with co-partners and shareholders. I have a background in engineering as I trained as a mechanical engineer. I have worked in IT, network optimization, media, and web solutions providers. Until the founding of Advent in 2015, everything I have done revolved around providing solutions. Aside from providing solutions, I have been interested in infrastructure. We have organized events centred on investment promotions, and that’s where this desire was borne.
Sometimes I would attend meetings as an event organizer but barely witness a partnership or collaboration linked to capital. I decided to switch my position as an event manager to the individual who sits across the table with the capital. We deliberated on the primary needs of humans; shelter, education, health, etc., and started with shelter. That is how infrastructure was born. We built housing infrastructure that led to building hostels and accommodations and entered partnerships with businesses to ensure people could afford to buy houses without breaking the bank. These events led us into the journey.
Cancer care is borne of something more personal. One of my mentors, David Adesina Astro, a former director for the BBC, passed on. He taught me the power of believing in the power of one’s dreams. He also had a friend who died from sickle cell. He shot a documentary on it, which was broadcast on BBC. He collaborated on a couple of media works together in Nigeria. But within four months, he was diagnosed with bowel cancer, leading to his ultimate demise in 2012.
I have always looked at cancer from this prism, and it made me realize that we had to create a solution targeted to cancer care. Once an individual is diagnosed with cancer, the chances of survival are often grim. The cost of treatment is astronomical, and the services and provision of services are not readily available. After more deliberation over the past few years, we decided to get to work.
How would you say the Nigerian government has improved in terms of creating vehicles or systems to get private capital into social infrastructure? What have you noticed since you delved into the design field?
Previously, we organized investment promotion events. We are currently evolving. The government cannot be the only infrastructure provider as it is currently low on resources for effective development. Countries considered wealthy also fall under the same category. Healthcare and education are now privately run in the Middle East, Asia, and the West. It is why education in the west is more expensive for local students than in the past. The government is taking a chance on key infrastructure provisions for policies focused on the people, like decent education, healthcare, and shelter.
In 2010, I was present at the Power Summit, which was held at the Villa. I attended with a team from the Commonwealth Business Council. It was the first of its kind in the Nigerian power sector. The team brought over 500 people together from around the world. They also pitched to some of the biggest names in Nigeria. They did a beautiful presentation showcasing the prospects and opportunities. The process received a lot of criticism, but surprisingly, some of the distribution companies running now came from that process. Though some have run into problems, others are still running. Some are being quoted in the stock market, and their share values have increased- that is progress. It may be slow-paced, but it is a gradual process. The synergy is gradually rising, especially with low forex, as companies are on the lookout for the private sector to bridge the gap.
Opportunities are now available for the private sector in power. Most have converted problems into jobs while providing power for public consumption. We have also seen this play out in the telecommunications sector.
Free capital is gradually becoming a thing of the past. Private capital is the future for development in Nigeria and the continent. Problems arising would spur corporate governance, birthing visions, goals, and deliverables. This could usher in change as it would translate to individuals paying the right service prices.
What is the best way to get a project done in Nigeria to attract investors? What do investors look out for before investing?
Projects are more effective when implemented at the state level. They take a long time with the federal government, whereas, at the state level, it is quicker, and results are easily measurable. People can also be held accountable at the state level.
To attract investors, priority and security are most important. Aside from confidence, your policy documents should indicate your investors’ protection. This is often lacking in most. It is the reason why funds do not leave the investor’s pockets after dozens of investment meetings. For instance, I am keener on the strength of protection you offer me than on returns. Most smaller markets benefit from investments more than larger ones. They give investors policies that enable them to withdraw their capital in case of any casualties.
Do you need to bring on special-skilled people and special skills?
Because there would be a PPP (Public-Private Partnership), we need experts. One of our projects took us 24 months from the letter of award to the signing of the agreement. Typically, we sign agreements after the appointment of the letter of award. Ordinarily, it should not take so long, but if one is not resilient enough, they will back out of the deal.
We receive invitations to attend free training events. Our procurement and legal teams attend them because that is how we understand the language of PPP. It is how we know the intricacies and requirements.
How can the government see more results in terms of public-private partnerships?
The government needs to do more engagement and marketing. They also need to realize that conflicts are typical and so develop conflict resolution and management skills. If the government does more marketing, there would be visible results. Several individuals would be interested in such partnerships if the government respects contracts. That will go a long way to encourage more people to participate in PPPs.
What’s your company’s pipeline looking like, and are you considering expanding outside Nigeria?
We are currently expanding our reach in the healthcare and education sector. In the energy sector, we are growing and providing infrastructure support services. This is remarkable because we have been operating for over three years. April will mark our fourth anniversary. Currently, we have assets under management worth about 4 billion. The project pipeline is about 19 billion in the next 24 months. So, we’ve gone from relatively zero to 19 billion.
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That looks healthy. Of course, it means more challenges because we have to raise funds, and we are currently on that.
We are also expanding outside Nigeria, within the continent, and exploring opportunities. As part of our sustainability strategy, we are looking at revenues in foreign exchange. It’s a critical aspect of our group plan, which we’re working on. We’re not in a hurry to do it because we don’t want to fail and have to re-try; we want to succeed in the first trial.
