AFC’s Samaila Zubairu – driven by a desire to get things done

I’ve at all times been pushed by a want to enhance issues. I’ve at all times been pushed by my capability and can to make issues occur,” says Samaila Zubairu.

Bettering the established order and making issues occur is an apt job description for Zubairu, President and CEO of the Africa Finance Company (AFC). It’s certainly one of a band of African multilateral monetary establishments taking up the continent’s financial transformation with rising confidence, talent and skill.

Within the time that Zubairu has been on the helm of AFC (he was appointed in 2018), it has grown its steadiness sheet to over $12bn, surpassing his acknowledged goal on the time he took over and placing it ready to play a severe function within the quest to construct Africa higher.

He has had an prolonged apprenticeship within the white warmth of excessive finance and mega tasks. He remembers that as a younger graduate in an accounting / consulting agency, one of many main duties was to audit a reasonably remotely situated asset owned by the Nigerian Nationwide Petroleum Company and operated by Elf Aquitaine, one of many greatest oil corporations on the time in his native Nigeria.

“We went on the speedboat to this island, means out the place the oil was. I seen one thing unusual. The one electrical energy was within the compound, whereas throughout it, the villagers would collect to have a look at the individuals within the compound.

“So I requested them, ‘Why can’t you lengthen the ability to the group and construct some services the place they will additionally meet?’ How this may be proper, I puzzled.”

The occasion left a really profound impression on him and he finally put it in his report on the go to, describing it as a safety threat for there to be a lot poverty in an space that was producing a lot wealth.

“It was simply odd and I didn’t perceive how any human being may very well be snug with such a scenario.”

Even now, recalling the occasion 34 years later, you’ll be able to really feel the sense of disquiet it generated in him. Maybe it’s this reminiscence and the sense of injustice it aroused in him that’s the supply of his vitality and nearly missionary zeal. It has made him one of the highly effective achievers on this planet of African finance right now.

Behind the succesful administration of steadiness sheets, it’s evident that he’s pushed by a ardour to see change within the continent that’s fired as a lot by empathy for the unusual individuals as it’s by company objectives.

Underlining his profession each earlier than and at AFC, is a fierce willpower to exhibit that Africa shouldn’t be a charity case however a viable enterprise proposition – together with within the firm’s main sector focus, the infrastructure area. To show the purpose, AFC has distributed over $600m in dividends to its shareholders during the last 15 years.

Incomes his spurs

Having earned his BSc in accounting from Ahmadu Bello College and with knowledgeable accounting qualification below his belt, he had extra work stints at Denham Administration Firm, FSB (now Constancy Financial institution) and Liberty Service provider Financial institution.

Whereas at Liberty Financial institution, he was given the duty of organising the funding banking division; it could deal with securities buying and selling, capital markets and personal banking, he says.

Amongst its purchasers was a buying and selling firm owned by Aliko Dangote. Though it was already a formidable presence in Nigeria and the sub-region, the corporate had larger ambitions – it needed to turn out to be a producer quite than only a dealer of cement.

It had set its eyes on Benue Cement Firm, which the Nigerian authorities was searching for to divest as a part of a broad privatisation technique. Zubairu, known as in to advise on the transaction, threw himself into the duty in typical style.

“As they have been planning to maneuver away from buying and selling to manufacturing, as a part of the technique classes, we made our enter on how that transition needs to be approached. They needed to amass cement crops and I wrote a paper on the best way to make the acquisition,” Zubairu says.

The paper led to an invite to fulfill Dangote in particular person. Zubairu laid out a enterprise technique for the person who would later turn out to be Africa’s premier industrialist and wealthiest man.

Dangote was competing with Blue Circle and Lafarge, overseas entities that have been successfully the identical agency however had submitted separate bids for the Benue Cement Firm. They have been additionally giants within the sector, which made the conflict seem to be a David and Goliath confrontation.

This known as for considering nicely out of the standard enterprise field. “We have to level out that they’re one entity, and we have to get political will behind us,” Zubairu suggested Dangote. “We have to make it recognized that they’ve already purchased some property and so they can’t be allowed to purchase all of the property, which might imply that there can be no competitors within the area.

“We additionally need to stress the significance of native content material as a result of there must be indigenous participation in any privatisation train. We even have to indicate that we’ve a plan to spice up manufacturing so we are able to substitute imports with native manufacturing.”

A newspaper report from April 2000, wherein then President Olusegun Obasanjo assured gamers that the method can be honest and that the privatisation effort wouldn’t end result within the focus of financial energy in just a few fingers, signifies that the message had important resonance.

In the long run, nonetheless, regardless of scrupulous consideration to element and a bid that was probably the most aggressive in value, Dangote was not allowed to amass Benue Cement. “We received however they mentioned we couldn’t take over as a result of we have been a buying and selling firm,” Zubairu remembers with some wistfulness.

Regardless of this setback, Zubairu had impressed sufficiently together with his recommendation and management to be invited to hitch the Dangote Group, first as treasurer and later as chief monetary officer.

On this capability, he helped the corporate hone its industrial technique, laying the groundwork for the continental behemoth that it could finally turn out to be. It was a interval that noticed the unbundling of Dangote Industries into listed subsidiaries on the Nigerian bourse and Zubairu was concerned within the largest venture finance facility for an African firm to this point.

Change after all

Having carried out that, Zubairu felt the necessity to change course. He based Africapital Administration Restricted, via which he sought to carry the monetary nous that had been deployed to Dangote’s profit to a wider clientele.

“I’d managed to assist one consumer rework from a dealer to an industrial conglomerate and I believed I can in all probability do it once more, so let me exit and discover the alternatives to take action,” he remembers.

Africapital Administration centered on advising corporations engaged in vitality and industrialisation tasks. Profitable tasks from that period embody consulting on the most important industrial park in Africa, numerous energy crops, processing crops, roads, dams and airstrips.

Via a three way partnership with Previous Mutual’s African Infrastructure Funding Managers, Africapital Administration helped create the Nigerian Infrastructure Funding Fund, a non-public fairness automobile centered on infrastructure within the subregion, and likewise led the $300m acquisition of Eko Electrical energy Distribution Plc.

“In the midst of all that, I used to be requested by my buddy and former colleague, who was by then the Minister of Finance to use to steer the Nigeria Sovereign Funding Authority and I mentioned no, I’m not ,” Zubairu says, recalling how the subsequent leg of his journey started.

At his buddy’s insistence, nonetheless, he handed in his resume, just for the incumbent to be retained. It was then recommended that Zubairu apply for the place of CEO of AFC, an organization he knew nicely on the time, not least as a result of he was a tenant of their constructing, he says with fun.

After a “complicated course of”, he was supplied the place. I ask Zubairu why he took the job. “It was the chance to create enchancment at scale,” he replies after the slightest of pauses. “I felt that bettering the lot of some wealthy males or massive corporations, which is what I had been doing, was not as impactful as bettering the lot of a rustic or continent.

“I used to be at a degree in my life the place I felt that AFC was an awesome platform with which I might assist speed up growth impression, and do it in a means that may very well be transformative and prepared the ground for others to comply with.”

An Africa-wide project

Established in 2007 by treaty, the function of the AFC, as decided by member states, is to be a automobile to catalyse and combination funding into infrastructure on the continent via progressive approaches.

Africa’s infrastructure hole stays one of many continent’s greatest challenges and a barrier to its financial transformation. The African Improvement Financial institution estimates that the continent must spend at the very least $130bn a 12 months to carry its infrastructure to an optimum state, together with offering climate-resilient services.

Regardless of this, funding in African infrastructure is nicely behind different areas on this planet, owing to a number of components, not least the hesitation to spend money on a area perceived to be dangerous, mixed with a scarcity of venture preparation on the a part of managers on the continent.

When Zubairu joined the AFC in 2018 as CEO (turning into the third particular person to sit down within the massive chair), AFC was already confronting these challenges.

He introduced a renewed sense of urgency to the duty, vindicating the expectations of the board that appointed him, together with its chairman, Dr. Okwu J. Nnanna, who welcomed him into the function by describing him as “a person with the distinctive qualities throughout deal origination, execution, and capital elevating that may proceed to facilitate AFC’s potential to ship transformational change via infrastructure funding because it strikes into a brand new period.”

AFC’s steadiness sheet is now in extra of $12bn and it’s being wanted by companions to assist play a lead function in Africa’s vitality transition and decarbonisation efforts. Right now, not a convention goes by the place he’s not invited to talk and he has the ears of Presidents and CEOs throughout the area and past.

Options-driven mindset

As an Eisenhower Fellow, Zubairu has a wider perspective on the function that his establishment and others prefer it need to play in Africa’s lengthy transformational journey.

The Eisenhower Fellowships programme is a global management growth programme based in 1953 in honour of US President Dwight D. Eisenhower. Fellows are chosen primarily based on their demonstrated management potential and dedication to creating a constructive impression.

He requires a practical strategy to each the vitality transition and likewise to growth.

“You recognize,” he says in his characteristically considerate method, “Africa is a continent that wants credible leaders and sponsors. So that you want establishments which are in a position to play the function of midwife, to create the chance for others to comply with. I felt that we might construct an establishment that would do issues on a grander scale and lead for others to comply with.”

His strategy is to give attention to options. “While you have a look at the area wherein we’re – infrastructure and industrialisation – you’re taking a look at a multi-layer, multi-billion alternative. So we wanted to give attention to execution and have a solutions-driven mindset.”

These options embody tens of millions of kilometres of roads, a whole bunch of bridges and hundreds of megawatts of energy that should be constructed and deployed across the continent if Africa is to progress on its growth quest.

That is the widely-referenced ‘infrastructure hole’ hampering the continent’s development and AFC is true within the vanguard battling to shut the hole. It has managed to extend its shareholding, and procure a ranking of A3 from Moody’s (the third highest in Africa).

The surroundings, Zubairu believes, is ripe for development. “You recognize, in banking and trade in Africa, most issues are new so when you begin, you’d at all times be worthwhile. We’re but to succeed in the stage the place competitors reduces profitability.”

This state of affairs, he says, has enabled AFC to develop on the tempo it has with out straying exterior of the stringent prudential pointers which were laid down for administration. He was fortunate, he provides, to have a group that shared his imaginative and prescient and mindset and on whom he might depend to pursue the dream.

“Fortuitously for me, I discovered my band who have been additionally keen to make a distinction and an impression. There are numerous the reason why issues don’t occur. We determined to be those to search out the explanations to get it carried out.”

Distinctive fairness bridge

To attain its objectives, AFC companions with governments and traders to rework concepts into bankable tasks. The important thing level is to advertise tasks that make an impression, are viable and return income to traders.

The Pink Sea Energy wind farm in Djibouti that was launched in September, Zubairu says, is a basic instance of all these components coming collectively. The venture will carry 60MW of wind energy to the nation, which has been reliant on its neighbour Ethiopia for a big a part of its electrical energy.

Zubairu factors out that it was not precisely a mannequin surroundings for funding. “On the time, that they had simply gone via their row with DP World over nationalising their port, which is the largest consumer of vitality within the nation, so it won’t have been perceived by some as investor-friendly. However it is a small formidable nation that has to depend on diesel energy so it clearly made sense for us to assist them.”

This meant working with the federal government to develop the enterprise, getting an influence buy settlement in place with the native utility and getting the World Financial institution’s Multilateral Funding Assure Company to additional de-risk the funding.

On the monetary facet there was much more innovation. “To speed up monetary shut, we launched an fairness bridge, development finance answer.

“Sometimes, tasks in Africa can take a very long time to succeed in development stage as a result of the lenders take their time; they need to see this report and that report, they need this and that. So all of that may take time.”

Utilizing the fairness bridge enabled development to proceed, even within the face of Covid. “What is exclusive about this venture is that this was the primary time that monetary shut was achieved via an fairness bridge versus venture debt and now we’ve lenders lining as much as take out fairness,” Zubairu says with justifiable satisfaction.

Djibouti goals to be the primary African nation to have 100% of its vitality wants supplied for by renewable sources. The port, he says, one of the essential within the continent, may even be totally decarbonised by way of its vitality utilization.

The place purely business companies hesitate and even reject these alternatives, African MFIs like AFC have the mandate and the boldness to step in and ship tasks which are wanted in a means that’s viable and worthwhile. Which is what AFC was in a position to do in Djibouti.

Equally, AFC backed the $335m Cabinda Oil Refinery in Angola, partnering with Gemcorp and Africa Export-Import Financial institution, that different large in African growth finance.

Angola is certainly one of Africa’s main oil producers and but imports refined merchandise. The refinery will allow Angola to scale back imports, saving each arduous foreign money and the surroundings by lowering the emissions that come from delivery in merchandise quite than producing them domestically.

The important thing takeaway from that transaction, Zubairu displays, is that “import substitution is an efficient approach to scale back greenhouse emissions related to delivery and create extra jobs within the native financial system. It additionally gives a possibility for scaling up in order that subsequently, they are going to have the ability to provide neighbours within the area.”

Different important tasks in course of embody growth of a 10GW wind farm in Egypt, constructing on AFC’s joint acquisition final 12 months of Lekela, Africa’s greatest renewable vitality supplier. AFC’s creation of particular financial zones via its Come up platform contains the primary licensed carbon impartial industrial zone in Africa. There are numerous extra tasks, Zubairu intimates, that he can’t talk about simply but.

These tasks, although various in nature, exhibit the ambitions that AFC has for Africa. It’s a imaginative and prescient wherein the vitality transition facilitates a brand new industrial push on the continent, resulting in rather more native manufacturing and worth addition to provide rise to elevated intra-African commerce, offering a boon to the nascent African Continental Free Commerce Space, which the AFC is totally in assist of.