The Nigerian Millionaire Who Wants To Negotiate With Boko Haram.
The house is a Mecca of sorts. Highflying politicians, senior executives at his conglomerate, diplomats, private bankers and hangers-on typically have to wait for hours to get an audience with the man. When I meet him on a crisp afternoon in May, he’s relaxing his frame on a couch in the dining room, chatting with senior executives from one of his companies.
Orji Uzor Kalu is as eccentric as he is charismatic. When I enter his dining room, he sizes me up quizzically for seconds, and then spontaneously welcomes me heartily to his home in my local dialect before offering a seat directly opposite him. In less than a minute of meeting him, he immediately switches to discuss the state of Nigerian affairs. He had only returned from London a night before, and on his arrival, a group of Journalists at the International Airport in Lagos had asked him to comment on Nigeria’s security situation. He loses all reticence when he talks about Nigerian affairs, and Kalu, who has always had a predilection for uttering provocative statements, had declared that Nigeria’s President, Goodluck Jonathan could become the country’s last president. He is a newsmaker, and sure enough his statement had made it to the front pages of some of Nigeria’s major newspapers on this day.
Orji Uzor Kalu
Over the last few years, Nigeria has had to contend with its worst security challenge in its recent history. Boko Haram, a dreaded Islamic sect which plans to institute an Islamic state in Nigeria among other warped objectives, has embarked on a series of terror attacks on hapless Nigerians. Kalu believes the Nigerian government is not handling the current security crisis properly and has severally urged the government to negotiate with the terrorists.
Last year, he offered to negotiate with the Boko Haram sect on behalf of the Nigerian government. He believes he could have been able to strike a compromise with the terrorists and stop the bloodshed. The Nigerian government barely considered his offer. The government has declared on several occasions that it would never negotiate with terrorists, a decision Kalu believes is ill-advised.
“It’s sad enough that lives are being lost – precious lives that could build our country. And we’re losing them to terrorism. This is what we have become. Apart from the thousands of lives that have been lost, the damage on our economy is irreparable. Businesses are shying away from Nigeria and jobs are being lost,” he says.
He should know. Orji Uzor Kalu, 53, is one of the wealthiest men in Nigeria and runs one of West Africa’s largest companies, Slok Holding – a $2.5 billion (annual revenues) conglomerate that has interests in everything from shipping, manufacturing and energy distribution, to insurance, property, banking and the media. Slok Holding employs more than 3,000 people in Nigeria, Liberia, Cote D’Ivoire, and the Gambia. He owns 93% of the conglomerate, an asset that puts him in the league of the wealthiest businessmen in Nigeria. Kalu is not involved in the day-to-day management of his companies, but still maintains his position as Chairman of the group. He now spends the vast majority of his time as a commercial diplomat in his own private capacity, helping to support business promotion between Nigeria and other countries, while persuading foreign businesses to invest in Nigeria. Later this evening, he is hosting a group of international businessmen and Abuja-based foreign diplomats to a dinner at his home to discuss commercial relations among other issues. And as we chat, we walk around his expansive residence as he selects wine and discusses with his Chefs on food selection for his evening soiree.
“All these foreign companies are eager to do business in this country, but when they turn their TV on and they see all the bad news of insurgency, it’s a deal breaker. So I feel a sense of responsibility as a successful businessman to sell my country as an attractive investment destination.”
Kalu was born on April 21, 1960, a few months before Nigeria gained her independence. At the age of 19, after he got suspended from the University of Maiduguri for spearheading a series of student riots, he took a $35 loan from his mother and started trading in Palm oil and fish. He would buy his goods cheaply from Nigeria’s eastern region, and sell at double or triple the price in the Northern states. As his trading business prospered, he expanded his business horizons, venturing into the sale of furniture and importing commodities like rice, sugar, flour, cement and aluminum roofing along with fellow tycoons Mike Adenuga and Aliko Dangote, who are his close friends. By the time he was 22, in 1982; he was already a multi-millionaire and was enjoying a rising national profile as one of Nigeria’s most successful young businessmen. In Nigeria, more than anywhere else, success begets success, and before long the young, ambitious businessman had ingratiated himself with top-ranking military officials who were ruling the country at the time. Nigeria was under military rule for the better part of the 80s. Leveraging on his connections within the military, Kalu cornered a series of lucrative state contracts, chief among them being a contract for the supply of arms and ammunition for Nigeria’s defense forces and law enforcement agencies. He cleaned out with deals like this and promptly reinvested his money in commercial and residential real estate across Nigeria and expanding his trading business from Nigeria to other countries in West and Central Africa.
When Ibrahim Babangida came into power in 1985 as President, he began to encourage Nigerian businessmen and indigenous companies to participate actively in the upstream petroleum industry.
“I saw an opportunity in the marine service sector. In those days it was extremely difficult to spot an indigenous vessel on Nigerian waters. I don’t think there was a Nigerian vessel back in those days- in the mid 80s, and even with all the foreign vessels that were on our waters, there was still a deficit of vessels. At that time, market focus had begun to drive and consummate the upstream oil and gas industry into deeper waters and it was clear that there was an increased need for more operational service vessels,” he says.
In 1987, Kalu, drawing from his own personal funds and loans from the banks, launched Slok Shipping to service the marine sector. “We started off with crew and patrol vessels. They are smaller vessels that take personnel to offshore drilling sites, and we grew from there.”
Today, Slok Shipping
operates much larger Offshore Support Vessels – Platform Supply Vessels
(PSVs) and Multi-Purpose Support Vessels (MPSVs). PSVs are deep-sea
vessels designed primarily to transport supplies and equipment to and
from offshore oil and gas support production platforms, offshore
drilling rigs and other types of offshore vessels and installations.
MPSVs on the other hand provide a diverse range of supply and
maintenance functions in the offshore oil-field services industry. These
vessels are not cheap. According to Kalu, they could cost anywhere from
$30 million – $50 million, depending on their size, components and
capabilities. Slok Shipping has 21 of these vessels, making the company
the largest operator of Offshore Support Vessels in Nigeria, and one of
the largest in Africa.
It’s a capital intensive
business, but as Kalu says, the rewards are worth it. “Usually if you
can get 75-80% utilization per annum, which we do, you can recoup your
investments in six years.
It’s
a rewarding business, and Slok’s shipping business alone contributes a
healthy nine-figure sum to the group’s annual bottom-line. Slok Shipping
is now the largest shipping company in Nigeria, both in terms of
revenues and service fleet. The company operates in marine transport
service involving offshore support and deep sea transportation within
the Nigerian waterways. Slok Shipping owns, operates, and manages its
own fleet and its clients include a good number of international and
indigenous oil companies, many of whom sign multi-year contracts.
But the business is not without its challenges. “The cost of capital in Nigeria is a major challenge. It’s crazy. In Nigeria you take a bank loan and you have to repay to the tune of 21% in interest, and I’m competing with foreign companies that are getting loans at a 6% interest rate. It’s not healthy for business,” he says.
And Kalu believes the government is not helping matters. In 2003, the Nigerian government established the Cabotage Vessel Financing Fund (CVFF), a fund that aims to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping. According to the Coastal and inland shipping (Cabotage) Act of 2003, the beneficiaries of the fund will be Nigerian citizens and shipping companies wholly owned by Nigerians. The CVFF is managed by Nigeria’s Ministry of Transportation through one of its agencies, the Nigeria Maritime Administration and Safety Agency (NIMASA). It is funded primarily through a 2% surcharge of the contract sum performed by any vessel engaged in coastal trading and monies generated through fines, tariff, and fees for licenses and waivers. Indigenous shipping firms were encouraged to apply for the fund. Last year, six indigenous shipping firms were selected by the Ministry of Transport to benefit from the fund after meeting certain criteria. Slok Holding, which applied for the fund and met all the criteria, was not shortlisted for the fund. One of Kalu’s Personal Assistants believes Slok’s exclusion from the shortlist was suspect.
“You know in Nigeria, there is always one form of maneuvering or the other. The companies that were shortlisted to benefit from the fund cannot match us in terms of asset base or technical capacity. But that’s one of the challenges of doing business in this market. At times, there is no such thing as meritocracy,” the assistant says.
Even though the Transport ministry shortlisted 6 companies for the fund last year, not a single cent has been disbursed to shipping firms since its inception. In January this year, the fund’s value surpassed $300 million, but very little has been said about the fund or its beneficiaries. There has been a delay and secrecy surrounding the disbursement of the fund. An analyst in the shipping industry who pleaded anonymity believes that top ranking officials in the Transport ministry and NIMASA could be earning millions of dollars monthly in interest from the fund in a personal capacity, hence the delay. In Nigeria, these things do happen. A lot.
“This is the problem with Nigeria – corruption. The whole system is so corrupt that even a fund that is supposed to be used to develop a sector is being manipulated by a few persons to enrich themselves,” Kalu says.
It’s an interesting statement coming from a man whose critics have accused of corruption and gross mismanagement of government funds in the past. Kalu, a veteran politician, was Governor of Abia state, a large state in Nigeria’s south eastern region from 1999 – 2007 after winning free and fair democratic elections. Indigenes say he looted the state’s treasury without remorse and left the state worse-off than he found it. He denies he was ever corrupt and even points out that he is perhaps the only governor in the history of Nigeria who left political office a poorer man.
“When I left Government house in 2007, I was poorer than when I got in,” he insists.
There might be some truth to this. While he was governor of Abia state for 8 years, Kalu famously had a falling-out with Nigeria’s President at the time, General Olusegun Obasanjo. Obasanjo responded by exercising his powers as president to close down some of Kalu’s flourishing businesses. The former president revoked the license of Hallmark Bank, a successful commercial bank in which Kalu held a 70% stake, and he closed down Slok Air, a domestic commercial airline that he owned. Obasanjo’s vendetta on Kalu’s businesses affected his fortunes significantly.
“Obasanjo could have been a great president, but he was petty. Rather than supporting businesses to grow, he was going around closing businesses of people he felt had different political ideals from him, depriving thousands of people of their jobs just to settle personal scores. He frustrated my businesses so much that by the time I left office in 2007, I had lost tens of millions of dollars.”
But Kalu has since bounced back and reorganized his businesses. Apart from his shipping business, Slok Holding owns a controlling stake in First International Bank, a commercial bank with operations in Liberia, Gambia, Sierra Leone, DR Congo and Guinea. He runs a thriving trading and manufacturing outfit that manufactures and sells automotive batteries, aluminum roofing sheets, razor barbed wires, tyres, matches and candles across West Africa. Another of Slok’s subsidiary companies markets and sells petroleum products across Africa. In the media, he owns The Sun Newspaper, a Nigerian newspaper with a penchant for ‘British Tabloid’ styled journalism. He founded it in 2003, and it’s now one of the highest-circulating daily newspapers. Late last year – ten years after founding The Sun, he launched New Telegraph, which aims to be a more serious, politically-minded news daily. It’s already doing well in the marketplace, with daily circulation exceeding more than 50,000.
A few pundits believe his new media venture is a part of a well-orchestrated machinery aimed at shaping the national agenda in lieu of his presumed presidential ambitions.
But the business is not without its challenges. “The cost of capital in Nigeria is a major challenge. It’s crazy. In Nigeria you take a bank loan and you have to repay to the tune of 21% in interest, and I’m competing with foreign companies that are getting loans at a 6% interest rate. It’s not healthy for business,” he says.
And Kalu believes the government is not helping matters. In 2003, the Nigerian government established the Cabotage Vessel Financing Fund (CVFF), a fund that aims to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in the domestic coastal shipping. According to the Coastal and inland shipping (Cabotage) Act of 2003, the beneficiaries of the fund will be Nigerian citizens and shipping companies wholly owned by Nigerians. The CVFF is managed by Nigeria’s Ministry of Transportation through one of its agencies, the Nigeria Maritime Administration and Safety Agency (NIMASA). It is funded primarily through a 2% surcharge of the contract sum performed by any vessel engaged in coastal trading and monies generated through fines, tariff, and fees for licenses and waivers. Indigenous shipping firms were encouraged to apply for the fund. Last year, six indigenous shipping firms were selected by the Ministry of Transport to benefit from the fund after meeting certain criteria. Slok Holding, which applied for the fund and met all the criteria, was not shortlisted for the fund. One of Kalu’s Personal Assistants believes Slok’s exclusion from the shortlist was suspect.
“You know in Nigeria, there is always one form of maneuvering or the other. The companies that were shortlisted to benefit from the fund cannot match us in terms of asset base or technical capacity. But that’s one of the challenges of doing business in this market. At times, there is no such thing as meritocracy,” the assistant says.
Even though the Transport ministry shortlisted 6 companies for the fund last year, not a single cent has been disbursed to shipping firms since its inception. In January this year, the fund’s value surpassed $300 million, but very little has been said about the fund or its beneficiaries. There has been a delay and secrecy surrounding the disbursement of the fund. An analyst in the shipping industry who pleaded anonymity believes that top ranking officials in the Transport ministry and NIMASA could be earning millions of dollars monthly in interest from the fund in a personal capacity, hence the delay. In Nigeria, these things do happen. A lot.
“This is the problem with Nigeria – corruption. The whole system is so corrupt that even a fund that is supposed to be used to develop a sector is being manipulated by a few persons to enrich themselves,” Kalu says.
It’s an interesting statement coming from a man whose critics have accused of corruption and gross mismanagement of government funds in the past. Kalu, a veteran politician, was Governor of Abia state, a large state in Nigeria’s south eastern region from 1999 – 2007 after winning free and fair democratic elections. Indigenes say he looted the state’s treasury without remorse and left the state worse-off than he found it. He denies he was ever corrupt and even points out that he is perhaps the only governor in the history of Nigeria who left political office a poorer man.
“When I left Government house in 2007, I was poorer than when I got in,” he insists.
There might be some truth to this. While he was governor of Abia state for 8 years, Kalu famously had a falling-out with Nigeria’s President at the time, General Olusegun Obasanjo. Obasanjo responded by exercising his powers as president to close down some of Kalu’s flourishing businesses. The former president revoked the license of Hallmark Bank, a successful commercial bank in which Kalu held a 70% stake, and he closed down Slok Air, a domestic commercial airline that he owned. Obasanjo’s vendetta on Kalu’s businesses affected his fortunes significantly.
“Obasanjo could have been a great president, but he was petty. Rather than supporting businesses to grow, he was going around closing businesses of people he felt had different political ideals from him, depriving thousands of people of their jobs just to settle personal scores. He frustrated my businesses so much that by the time I left office in 2007, I had lost tens of millions of dollars.”
But Kalu has since bounced back and reorganized his businesses. Apart from his shipping business, Slok Holding owns a controlling stake in First International Bank, a commercial bank with operations in Liberia, Gambia, Sierra Leone, DR Congo and Guinea. He runs a thriving trading and manufacturing outfit that manufactures and sells automotive batteries, aluminum roofing sheets, razor barbed wires, tyres, matches and candles across West Africa. Another of Slok’s subsidiary companies markets and sells petroleum products across Africa. In the media, he owns The Sun Newspaper, a Nigerian newspaper with a penchant for ‘British Tabloid’ styled journalism. He founded it in 2003, and it’s now one of the highest-circulating daily newspapers. Late last year – ten years after founding The Sun, he launched New Telegraph, which aims to be a more serious, politically-minded news daily. It’s already doing well in the marketplace, with daily circulation exceeding more than 50,000.
A few pundits believe his new media venture is a part of a well-orchestrated machinery aimed at shaping the national agenda in lieu of his presumed presidential ambitions.
“It’s purely business,” he says. “The
newspaper business in Nigeria could be lucrative if well-run. But more
importantly, The Telegraph aims to offer an objective coverage of
political, social, and cultural issues and set the agenda for some of
those pertinent discussions we should be having about our country and
its future.”
On whether or not that
future involves him becoming President of Nigeria at some point, Kalu, a
staunch catholic, remains evasive. We are still talking and strolling
around the house when we reach the building in the compound that serves
as his family church. He makes a sign of the cross and leads me into the
place of worship.
forbes.
