Rainoil is one of the most successful downstream petrol companies in Nigeria. What has been the driver behind your success?
I have always wanted to be an entrepreneur. In 1994, we incorporated Rainoil Limited and commenced operations in 1997; essentially, Rainoil is a classic case of a start-up. We started from ground zero with little capital; however, with hard work, dedication, perseverance, and discipline, we were able to build it into what it is today. We are one of the dominant players in the downstream space of the Nigerian oil and gas industry. We have a 50 million-liter capacity multi-product depot in Oghara, Delta State, and a 50 million-liter capacity multi-product depot in the Calabar Free Trade Zone. We have about 59 petrol stations across the country. We are also the second-largest indigenous ship owner in Nigeria. We are massively into distribution, with a fleet of about 90 trucks that deliver products around the country. We provide direct employment to more than 800 people, both Nigerians and expatriates. We are an integrated downstream company and play a role in the entire value chain. Financial discipline has been one of our critical success factors.
What are the details of your long-term ambition?
I am embarrassed that the country is one of the world's largest producers of crude, yet we import more than 90% of our refined petroleum products. The financial structure in Nigeria does not encourage massive, long-term investments. To build a refinery, we need intensive financial commitments, what I call “patient capital." In an economy where interest rates are as high as 25%, such capital does not exist. We are trying to pull the funding together. It initially would be able to produce diesel and naphtha. We hope that over time we could scale it up to be able to do gasoline, which is the main product we want to see coming out of our refinery. Once we eventually start and the refinery begins to make money, we hope to be able to raise additional debts to scale it up further. Nigeria already has three refineries, but they are old. We should not continue to pour money into the existing refineries. We need greenfield refineries that are brand new. The last refinery was commission in 1985, and we need new refineries with modern technology.
Should private investors be the ones to lead these initiatives?
Nigeria is brimming with entrepreneurs. The level of entrepreneurship is on par with many places in the world. Many major investments in Nigeria are actually owned by Nigerians. In other African countries, most major investments are led by the governments or by foreigners. We are structurally defective when it comes to funding because interest rates are not investor friendly. The Central Bank and the Ministry of Finance should be worried about interest rates. No other country would allow interest rates to spiral out of control. We cannot tackle unemployment in an economy where interest rates are as high as 25%. Through treasury bills, the government is crowding out the private sector. Banks cannot lend money to the private sector, which are the ones who invest and create business and wealth.
What is your outlook for 2018?
Nigeria is full of opportunities. We have 180 million people who are talented and enterprising. The outlook remains strong. Regardless of the momentary blips, business is a long-term project. We do not judge a business by what happened in the past two or three months. I have been in this industry for over 26 years and can say this is not the first obstacle we have faced. Nigeria is a preferred investment destination. We never stop investing. We are expanding our retail outlets, our truck fleet size, and starting a new LPG facility. We will not take a long-term decision based on what has been happening over the past few months.