Chidi Duru, a two-term member of the House of Representatives before he ventured into the hospitality industry with Bon Grand Towers Hotel in Abuja, Ado Ekiti and soon, Owerri, is also an operator in the fintech sub-sector. In this interview, he spoke with journalists, including Davidson Iriekpen, about what informed his choice of businesses. Excerpts:
I know that you’re one of those who started the present democratic government in 1999 and you held sway for two terms and disappeared, only to reappear last year and it wasn’t favourable to you. So what have you been doing since that time?
Well, from 2007 when I left the National Assembly, I focused more of my time, energy and resources on rebuilding my business. It is important to also mention here that before I went into politics full-time in 1999, I already founded a company that was in the environment, firefighting and asset management. So, after 2007, I went back to rebuild my business and fortunately, in the course of my stay in the National Assembly, I had the singular privilege of founding a company in the pension industry called First Guaranty Pension Limited of which I was the Vice-Chairman of the company. So, a lot more time was devoted to it and time was also devoted to my holding company called Grand Towers Ltd. Grand Towers Ltd is more of a venture capitalist, if you like, or a private equity investor that invests in identifiable opportunities in the sectors and one of the sectors we identified is the absence of shopping malls in Nigeria and our first investment was the Grand Towers Mall which is the first lifestyle shopping centre in Abuja that we sited in Akwodu Street, Abuja and attracted Shoprite.
The first Shoprite mall or shop was in my mall in Abuja and today, in Abuja, Shoprite is in about four other malls but I was the first person that had contact with Shoprite and brought them to Abuja. So from 2007, like I said, I got more involved in my business, in rebuilding my business and of course, getting involved in the affairs of my community, inspiring the younger ones, sharing my time and experience with them and of course, in mentoring which is something I like to do and have done over the years given the history of my family and the background where I come from.
It is not quite usual that people would leave the political arena, not someone who had some laurels as you won best legislator in the National Assembly in those days; so, what actually informed your taking a break from politics to go solely into business?
For me, it was not a deliberate choice and it was forced on me and a number of us. In 1999, when we were elected for the first time into the House of Representatives in Nigeria, we set up a group called the G-14 and in that G-14 were people of like minds. We had the Nduka Irabors of this world, the Tony Anyanwus of this world, Achobioma and Co, Faruq Lawan, Suleman Ishyaku and our confidence and conviction was that we wanted to change the paradigm. We wanted to contribute our quota in determining how the country is run and see whether we can help to position Nigeria differently and then to run best practices as you’d find it anywhere in the world.
In 2003…I believe in 1999/2000, we succeeded largely because when we had the first Speaker of the House, Salisu Buhari, a lot of us felt that he could not represent us or reflect the standing of most of us that were members in the House of Representatives and therefore, a guided push was made by us to ensure that we remove him as Speaker of the House and then ushered in Ghali Umar Na’Abba and that principle guided us even when there was a deliberate impact by the then government to ensure that over 95% of us did not return in the 2003 election and particularly for people like me, who were the target of a deliberate government/executive effort to ensure that we did not return to the House of Representatives. 95% of my colleagues did not come back.
I, for one, came back through the law court. It was actually the court that brought me back in 2004. So, the principle never left us. By 2007, it was very clear that having fought the battle and having continued to hold true to what we believed in which is that we believe in Nigeria and we believe that we have something much more to offer other than the normal ways of playing politics in the country, it was clear that the government had taken a deliberate effort to ensure that under no circumstances would someone like me and a particular Nze Chidi Duru come back to the National Assembly. So, after that, one took a bow and it wasn’t deliberate. It was forced on me and there was no other way other than to exit the scene and face my commitment to my business and, of course, my family.
You’re more or less someone who is private sector and development-minded. You were instrumental to creating the contributory pension scheme. What challenges at the time gave impetus to that design and to what extent has the original template succeeded?
I believe that again, by my training as a lawyer, I believe and I say it with every sense of conviction, that Nigeria is not in dearth of laws. What we need in Nigeria basically is more of enforcement of laws. And I also believe that we also need to begin to address the policy trust and the institutional reforms that are required to move Nigeria from where we are today to where we would like to see Nigeria. And I mean: see Nigeria in competing with the rest of the world. One of the things that gave me joy is being offered the opportunity to serve as the Chairman of the House Committee on Privatisation and Commercialisation. Earlier before then, I was invited to chair the House Committee on Appropriation and I felt that my talent and my abilities would be better utilised in a committee such as privatisation and commercialisation and people didn’t understand how you were given a Grade A committee and you’re turning it down for what was thought to be a committee that people just could not understand what it meant.
I was also fortunate to work with a reform-minded head of the DPU that was responsible for midwifing the privatisation and commercialisation impetus of the government, which was Mallam El-Rufai under the main chairmanship of the Vice-President, Atiku Abubakar. Working together, we midwifed a number of reform-minded policy trusts in Nigeria and impacted what we now enjoy in the telecommunication space which is the telecoms reform bill. We midwifed the mobile network operation in Nigeria today and today, we have close to about four mobile networks operating in Nigeria: MTN, Glo, Airtel and we have 9mobile. But, at that time, it was basically three mobile network operators which are: MTN, Econet and Mtel which is the Nitel operator that later died.
Our vision was very clear. We needed to enable Nigerians to communicate from Point A to Point B. If you remember at that time, it was claimed that telephone was not for the poor. Having lines were meant for the rich, for the very few privileged ones that were privileged to have the 090, it cost probably about N250,000, sometimes N350,000 to acquire the line. And there were long waiting lists for you to acquire that. We were very convinced that if we were able to put lines in the hands of Nigerians, it will greatly transform not only our social life, it will transform even how we relate with each other. It will also transform our economy. It will enable a lot of businesses as we know today that has also done.
Working with Mallam El-Rufai too, we were also able to again look into the horizon and came to appreciate the fact that we also needed to reform the power sector which we are lucky that we passed that bill. First, we attempted in 2002 but we couldn’t get it passed and assented to until 2004, when we started that process again and then 2005, it was now passed and assented to law as an Act of Parliament by the President but of course unfortunately, the politics of that time did not allow the full liberalisation and investment that is required in seeing through the implementation of the reform that that power sector reform engendered in Nigeria. Because if it was done then, when the whole world was looking at Nigeria, when the investors were looking at Nigeria to invest money in Nigeria, I can wager that power would have been long addressed in Nigeria unlike what it is today.
The other thing we talked about but unfortunately, couldn’t get it passed was the competition anti-trust law. Lack of understanding of the impact of the dominant companies in the economy. It was very difficult to lead members to understand that unless we innovate rules and regulations that inhibit antitrust behaviour in a country, that Nigeria will suffer as a consequence of that. So, unfortunately, it was one bill I was interested in and couldn’t get it passed before we left parliament. But I’m happy that in 2019, that it passed of course with some measure of confusion. There’s a confusion whether it is an antitrust bill or a consumer bill. What I find now is that more emphasis is placed on the consumer aspect of the implementation of the Act on the anti-trust behaviour.
And, of course, you mentioned the pension reform Act. Nowhere in the world have those countries made progress without long-term funding. And it is the pension access that provides long-term funding that crystallises investment, that crystallises development and in more ways than not, that puts hands in the hands of the PEs, the venture capitalists to be able to take long-term positions in assets that they would like to acquire. For example, South Africa has close to over 500 or 700 billion dollars in pension assets. And many countries in the world have asset sizes of close to 3, 4, 5 trillion dollars. And you’d find that in Nigeria, with the pension gap, even without looking at the benefits of a reformed and restructured pension class in Nigeria, many of us are witnesses to the fact that it used to be the case that our fathers, who worked in the civil service, our friends and our brothers who worked in the civil service, would actually exit or die without accessing their pensions, because those pensions were largely unfunded and they couldn’t access them.
So, one of the strategic decisions that we took when I got involved in the pension industry was to look at it and tell you: what is it that we can do to address the issue of the challenges that faced the civil service and the civil servants while they were working and while they retired from service. And one of those things was the unfunded pension scheme and we looked at Chile and many other countries in the world that have been successful in innovating a largely successful pension scheme in their countries and we adopted the Chile model, which is to transform from an unfunded pension scheme to a refunded pension scheme to the extent that you are certain that your contribution to your scheme whilst you’re working is not only safe, it’s secure, it’s guaranteed and that when you retire, in the withdrawal, that your pension will be able to take care of your lifestyle for the rest of your life. That is one benefit of it.
The second benefit of that is to also have a pool of funds that will be targeted to long-term investment and development. Today, we have close to about N11 trillion in our pension asset and that, in a way, is good news even though in 2004, when we passed that bill, we had expected that by 2015, the asset class, the contribution in our pension scheme will be in the region of 30 to 40 trillion naira. And then if you’re talking of 2020, we should be discussing about 50 to 60 trillion naira in our pension assets. So, imagine what that would have been if those asset class are targeted at road infrastructure, building railway lines, building airports and a number of those asset class that can return inflation between assets returned to the pensioners.
In your business interest, it seems that you’re into real estate, hospitality and technology industry. What informed your choice of businesses and how has Covid-19 affected you as a practitioner in the hospitality industry and what is Airvend all about?
As a person and leading the companies that I lead, our first guiding principle is to identify disruptive businesses that impact on lifestyle and change how we live, how we commute and then more importantly also, earn us profit. When we got involved in the shopping mall, which was the underlining principle. A number of us travel beyond the shores of this country and when you travel, if you want to come back to Nigeria, you’d see Nigerians log in bags and bags of things they have bought for themselves, their families and loved ones. To the extent that most airlines make more money in addition to what we pay as our air ticket, also for our luggage. That in any area of the world you enter the airport and you look at the line, you can easily identify Nigerians by the number of luggage that they carry.
And why is that so? Because they have shopping centres. They have big time retailers in those shopping centres that carry a number of the things that are not easily available in Nigeria. And the only shopping mall we had at that time in Nigeria was The Palms in Lagos. Shortly after that, was the Polo Park, which was undergoing development and that attracted our attention. And then, we looked at Abuja. We had the Cedi Plaza, which was basically… But then, we felt that we needed to bring Shoprite.
Shoprite was the dominant grocery store in Nigeria that was making waves, which had come to Nigeria and was trading at The Palms. And it took years of engagement with them to the point that if we were not resilient, if we were not passionate about what we believed in and why we wanted to do it, we would have all given up. And then finally, in 2012/2013, we started and then we completed the Grand Towers shopping mall in Apo and then, Shoprite birthed and Abuja changed since then.
Ever since then, we have had about four shopping centres that have come at the back of that. And of course, our investment in pension asset which is First Guaranty Pension. Again, it was also life-changing.
I made a point that those who worked in the civil service and retired could not access their pension. And of course, the fact that we needed to have a very disruptive, long-term investment to enable people access that money and then get involved in those kinds of projects that we spoke about.
And of course, in the new world of fin-tech, enabling payments as we know it, being able to transact, make payments on the phone, buy your airtime, buy your electricity, pay your bills just by the touch of the finger and then transfer money from one phone to another and then bill collections as we have, which is also very disruptive as we have.
So, that also encouraged our investment in the fintech space. So underlining our interest is always: identify a disruptive industry that would enhance value and lifestyle and of course, enable Nigerians to live the same lifestyle as their counterparts overseas and we believe that once we are able to achieve that, the bottom-line would always look good as our businesses have always shown that these bottom lines look good.
On the hospitality industry, before COVID, we were always confident that people would always travel. And if you travel, you would like to find a place to sleep. And then, we felt that we needed to also get involved in that space. So, the Bon Hotel Grand Towers and first flagship interest in the industry and we partnered with a global brand that was formerly called Protea and changed from Protea to Bon and they currently manage all our assets in the hospitality industry. Then, we are going to find an opportunity in Ado-Ekiti, given that Ado-Ekiti had the Ikogosi Warm Springs which is more of a resort of its own and well-managed, could also help to, what we call, a destination in-country tourism.
If that happens, it would contribute to the footfall in our property and down there in Ado-Ekiti. Every family, every compound in Ekiti has one professor. I’m not talking of doctors or lawyers and all that. So, and Ekiti has close to three universities and one outstanding one which is private-sector led. That is, Afe Babalola University, which is one of the best private universities in Nigeria, in West-Africa and has also built one of the best medical facilities in Africa, supported by firms from Dubai and the United States.
So, they also helped to contribute to our footfall. And of course, Owerri. As you know it, it is a land of tourism and hospitality and we hope that…Were it not for Covid, Owerri was… It would have been ready for opening before the end of the year.
But we would be happy to say that before the end of next year, Owerri would be in our portfolio.
Shoprite you just mentioned, I think sometime last month or so, thereabout, there was this news that the South African partners were trying to pull out. So, what are you people thinking?
It is very unfortunate. Unfortunate in the sense that it took hard work, it took labour and it took a lot of traversing between Nigeria and South Africa to encourage Shoprite to look to Nigeria and then take the investment decision that they took. We approached many other grocery stores in South Africa; Pick and Pay and others but it was Shoprite that took that decision and invested in Nigeria first in The Palms, the Polo Park and Grand Towers mall and many other malls in Nigeria.
What one would have wished is through that investment, rather than one pulling out, we would have wanted to see more of those big departmental stores coming to Nigeria. But instead, what has happened is because of the economic situation that we have found ourselves in, it is no longer profitable for most of them to operate in our environment.
I can mention to you a number of the stores that have come to Nigeria and have shut down and gone back home because of the difficult terrain that this economy represents for them.
Take a typical case in the last two months. The naira has depreciated in the last two months from N360/$, to N370/$ to N380/$ and I don’t think you can get for N460/$ now on the parallel market. Sometimes, it gets to 470/$, goes to 480/$, comes down to 462/$.
So, if your goods are import-dependent, what you’d be doing, you’re no longer managing your business. You’re managing currency for CBN. Every day, you’re on your laptop just determining what the currency value is and then, the next second, people are changing their price. So, that also creates some brand damage to your brand. Because if you come to my shop today and this phone is sold at N1,000 naira. And as you’re walking out the door and coming back because a friend told you: “Please can you also get me that type of phone?” and then as you’re coming back, the phone has gone from 1000 to 1200.
So, it’s a brand damage for a lot of corporates and I’m just giving you as a typical example of why corporates are finding it increasingly difficult to operate in this environment.
It’s regrettable that Shoprite indicated and filed that they’re pulling out of Nigeria as it is regrettable that any corporate that has come to Nigeria is going away.
What that calls for is that our government should step back and think through the number of the economic policies that are affecting businesses to truthfully operate in this environment, innovate those schemes, make it happen. And if it happens, this country with our sheer size, our number, will be in a position to attract the best of corporates in Nigeria to operate in our environment.
Most of these things you’ve talked about – investments, achievements and all that – you achieved them when you were young, maybe between your late 20s to early 30s. Juxtapose that with what is happening in our economy today where youths are calling for justice. You know, given the fact that most of our leaders today actually achieved what they achieved in their prime. So, take us through your experience growing up and achieving these at that youthful age against the backdrop of the environment now for youths and demand for redress.
Well, for me, I think it’s basically more to background. I would say that one was privileged to come from a background that was business-oriented. And I also learnt under the best of human beings who incidentally is also my dad who’s given to hard work, discipline and a man of integrity. He believes very strongly in hard work and the God factor. He espouses the view that when you work hard, help will always come your way and that what you are granted or given, it’s not because of you. It’s for the development of not just yourself, your family but the community where you find yourself. And in doing that, you must be truthful and you must never do anything that will harm your fellow men.
If you put all of these together, it is the bedrock of his success and he impacted it on all of us. So, we took that on and we moved on to the larger society. And one of the restraints he also imposed on us, his children, is not to ever get involved in government business. I think the only salary I’ve ever earned as working for the government was while I was in the National Assembly but outside of that, it is the principle of the Duru family that we don’t tender, we don’t dupe, we don’t accept any government work or job or whatever in that sense.
And he has a reason for that which I will explain later offline. But again, in our time, there was also a sense of the State reaching out to you. If not for nothing, most of us are benevolent to public schools, whether to federal government schools or state schools.
It is unlikely that people of our age went to private schools. I went to a primary boarding school but then the government took it over and we went to the school. And it cost, it was for nothing, really for those of us who went to public schools.
Now, if you benchmark it to what is happening today, I’m sure that if our kids are not in private school, it is maybe you’re taking a deliberate effort for your children to go to a public school. And in that public school, you probably have to think through it and work with a number of people to probably determine the quality of education that is going on in those schools. So, that engagement is not there. And yet, our youths are the bedrock of a society and these are people that would ordinarily… are the leaders. They call it the future leaders but I call them the present leaders because well managed, well groomed and well nurtured, these are people that would help to transform the society. The recent one I mentioned the experience of PayStack, I also mentioned the experience of AirVend which is the business that I lead and these are people under their 30s, who just left university and are being mentored and are being managed and they’re creating big businesses that can compete anywhere in the world.
What does that teach us? It teaches us that if government can creatively create a podium to engage them, to mentor them, to motivate them that Nigeria will be a better place. And fortunately for them and I also want to say fortunately for government, that the world has become a global village. What happened, is happening in Ghana, in US, these kids can relate with. Also what is happening in Nigeria. And the youths, the children that we’ve all brought up, some have gone to schools over there, all over the world, some have schooled in Nigeria but through these apps, through these phones they have, it’s easier for them to relate with the best practices all over the world. They find it intolerable and cannot understand even when we want to make excuses to them why things are the way it is in Nigeria. They refuse to understand that and it is a legitimate agitation.
So, what do we need to do? EndSARS, in my view, is a wake up call. EndSARS, in my view, is a youth telling us that they are fed up with the way Nigeria is being governed and they cannot accept any less. It is a statement to government that let us transform, let us reform, let us go back to the basics of what we need to do to be a great nation and we cannot pretend or play the ostrich that these are not legitimate demands and I hope and I believe that we will listen to it and we will harken to what they have told us or told those in power and that constructively, government will begin to address it.
It makes no sense that your parents will spend all the resources that they have, train you through school and you cannot even be sure of an opportunity of being employed when you leave school. Five years down the line, there are no employment opportunities.
And yet, someone else who left school, only because he’s a son of Mr. A who is connected to B, now gets employment in a government parastatal for which he is contributing little or nothing to the advancement of Nigeria. These are unacceptable to our youths. But if you create an enabling environment that would prosper and enhance opportunities for our youths to be meaningfully engaged, it now becomes a different equation entirely.
So, I think that this is what it all represents and I believe that given the stance of the governors’ forum and the speech that Mr. President made, that that engagement will begin to happen sooner than later.