Editor’s note: This story was featured in the April/May issue of Ventures Africa magazine
Words: Tolu Ogunlesi
VENTURES AFRICA – In 2010, Uche Orji, a highly rated semiconductor analyst and Managing Director with UBS in New York, resigned from his post as an “incredibly great offer” had just come his way – one that would more than double his salary. But a month after his resignation, Orji changed his mind about the new gig. He was finding it impossible to convince himself that it passed his three-way test for taking on new assignments: Can it be done? Should it be done? Can I do it? He decided to return to UBS. It was one of the lowest points in his career, Orji concedes. For a man who earned a living offering highly quoted advice to investors and multi billion-dollar firms – something he had been doing at UBS for six years – such a public about-face was not a wise decision. Professionally, he survived it, but even today he doesn’t like to talk about it. Even the most painful loss-making moments of his career seem to pale beside this incident.
Fortunately for Orji, his next big opportunity was just around the corner. In 2012, he responded to an advertisement by the Nigerian Government for the position of pioneer Managing Director of the newly created Nigerian Sovereign Investment Authority (NSIA). He travelled to Nigeria for the interview, confident he was qualified, but aware of the risk involved in quitting a high-profile Wall Street position to take up a job at a ‘government start-up’. More than 700 applicants had applied for the three jobs on offer: a Chief Executive and two Executive Director posts. Orji made the shortlist and, in August 2012, was named as CEO. He took up his duties in September, operating from the NSIA’s temporary offices near Nigeria’s Ministry of Finance, in Abuja, Nigeria’s capital. It was, he says, the third opportunity for him to move back to a country he left 17 years ago (he turned down the first two).
Orji has no problem settling down after returning in Nigeria. “Every country has its own different nuances. And so what you do when you arrive is study the place and engage people. I’ve done it in other places. And this place is not alien to me. This is my home.” Asked if he always had a plan to move back home, Orji says he thinks that everyone born and raised in Nigeria who leaves, harbours a desire to return someday. In his case, there was no formal plan. His fundamental loyalty was to his career and not some fancy notion of ‘home’. The career decided where he went, not the other way round.
Born in Arochukwu in the Igbodominated south-eastern Nigeria, Orji grew up in Umuahia – the capital of what is now Abia state. He attended secondary school at the prestigious Government College Umuahia, whose alumni includes the author Chinua Achebe. He studied Chemical Engineering at the University of Port Harcourt in Nigeria’s oil capital and after graduating completed his mandatory year of National Youth Service at the Nigeria Industrial Development Bank (NIDB), today known as the Bank of Industry (BOI). His job here as Project Assessment Engineer was his first foray into development financing. Orji then joined Arthur Andersen (later KPMG) as an audit trainee, auditing financial services companies and working on a system implementation for Diamond Bank. He joined Diamond Bank’s Audit Group in 1993, rising to become Financial Controller.
In 1996, Orji left Nigeria for the Masters in Business Administration programme at Harvard University. In 1998, after graduating, he joined the Goldman Sachs Asset Management European Equity Team in London as an analyst, later rising to the position of portfolio manager. During this time he managed in excess of a billion pounds in assets across Europe. A move to the Goldman Sachs Technology Team saw him managing about $600 million in assets worldwide. In 2001, he joined JP Morgan in London, as a Vice President, swiftly rising to become a Managing Director at the firm. In 2006, he made his way back across the pond to New York, to the United Bank of Switzerland (UBS), where he took up a Managing Director post. Orji would spend the next six years at UBS, leading the global team of semiconductor analysts. It was a powerful position – essentially he was the man who decided whether investors should buy or sell the stocks of multi billion-dollar technology companies like AMD Inc, Intel and SanDisk, among others.
Orji’s 12 years as a semiconductor analyst have been phenomenal: he speaks with pride of being ranked first in the Swedish, Irish and German rankings, second in France – “the most difficult market to crack in Europe,” he says – and fourth in the UK. His team, based in London, went from being unranked to being ranked ninth and eventually, first in Europe. It took the team just 18 months to get here, having started “from scratch”. Orji says he’s “still the only [semiconductor analyst] on record today who’s been able to achieve top-three ranking in Europe and in the US.”
Orji refers to the terrain of semiconductor analysis, where electronics meets material science meets mechanical engineering meets chemical engineering, as “tricky”, “high stakes” and “very volatile”. But, he says, it was a path that he found fascinating, and one he consciously chose to follow. “It’s a very difficult sector, very very difficult. Not everybody can cover semiconductors,” he says. He attributes his success to the teams he’s assembled and worked with over the years. In his six years at UBS, only one person left his team for another job. Considering the attrition rates in investment banking, Orji considers this retention rate a big deal. “Burnout is high,” he says. “We worked intense hours. For 12 years my day started at 4.30 in the morning. Every day. By 7.30 I’ve had three conference calls – before the morning even starts. Try driving your team at that pace for six years.”
His first priority in Abuja is building a winning team. “That is the most fundamental thing that I think my role today requires of me. If there’s one thing I’ve done successfully through most of my career it’s actually pick the right people to work with – because you can’t do it alone – and run a team that is stable, motivated and determined to win.” Orji takes the task of putting together a team very seriously. He looks for the right attitude, a hunger for success, the willingness to work hard and to share the team’s vision. He is deeply impressed by “people who take the time to do the most mundane piece of work and do it well.” Attitude, he says, is evident in the littlest things. Integrity also ranks high. There’s competence, which boils down to knowing and understanding the field, whatever it might be. And finally, there’s the bit that can’t be accounted for: his “gut feel” about the ability of a potential recruit to work well with the rest of the team, regardless of the brilliance proclaimed by a resume.
Orji firmly believes that leaders have responsibilities to their teams and he strives to create an environment that allows his team to give their best. “I actually encourage friction in my team, I encourage people to speak their minds. I will fire you if you’re a ‘yes man’, because you’re not adding any value. If all you do is say yes to what I say then you’re really not helping. You must have your own opinion,” he says, adding that he delegates amply and seeks to lead by example. “As a leader I’m in the trenches with you. I try to be the first person in the office every day. I work later than most people. I’m doing more than I’m asking you to do,” he says.
Kayode Ogunro, a Special Adviser to the Nigerian Minister of Finance, has worked with Orji setting up the NSIA since September 2012. “He’s not your CEO who sits on his throne and gives directives,” Ogunro says. “He’s very team-oriented.” Orji’s work ethic is deeply influenced by his Christian faith. On his iPad is a Bible which he reads regularly, and which beats having to display a giant Bible in the office. “I’m a Christian but I don’t wear it on my sleeve,” he says.
When Orji took up his new post as CEO of NSIA he found himself in the middle of a complicated situation. Nigeria earns tens of billions of dollars annually through the sale of crude oil. Most of it, purportedly, goes to the government. According to a constitutionally endorsed sharing formula, it is divided at three levels: federal, state and local governments. Leakages are common. In 2006, Nigeria’s then anti-corruption commission chief, Nuhu Ribadu, estimated that Nigeria had lost more than $380 billion in oil revenues to corruption since independence in 1960. Over the last decade there has been a determined push by Nigeria’s Ministry of Finance to develop and implement stronger and more transparent accounting and reporting mechanisms. As part of the reforms, in 2004 the Obasanjo Administration created a new, sequestered fund designed to hold savings from oil revenues, formally named the Excess Crude Account (ECA).
Since its inception, the ECA has generated controversy. Its opponents argue that such a mechanism is not explicitly backed by the constitution, especially because it allocates to an account managed at the Federal level funds that should belong to all three tiers of government. Its biggest opponents were, understandably, the powerful state executive governors who exercise a great degree of control over funds allocated to their states. During his term in office, President Olusegun Obasanjo held out against the state governors’ bids to abolish the ECA, pacifying them with a promise that the funds would be used to jointly develop critical infrastructure projects across the country. A leaked US diplomatic cable suggested otherwise.
“Although the Government of Nigeria said repeatedly that the funds would be used for needed infrastructure in electricity and roads, that does not appear to be happening as the funds appear to be going to support consumption and agricultural inputs such as fertilisers,” the 1 June, 2009 dispatch said.
The ECA also served as a buffer for the Nigerian economy during the global meltdown in September 2008. Still, nearly 10 years after its appearance, questions about its legality linger. There have been numerous inquiries into how its funds have been disbursed since its creation. One of the ambitions of Olusegun Aganga during his short tenure as Minister of Finance was to create a Sovereign Wealth Fund (SWF) that would replace the ad hoc ECA and formalise a mechanism for national saving. In 2011, Aganga told a Nigerian newspaper about the decision to abolish the ECA and create a genuine SWF. “As a developing nation, it does not make sense keeping money somewhere and looking at it, without any interest paid on it. With the Sovereign Wealth Fund, such monies would be put to work,” Aganga said. He succeeded in putting the bill before the National Assembly. It was passed into law and signed by Nigeria’s President Goodluck Jonathan in May 2011.
The state governors have since filed a suit at the Supreme Court, contesting the legitimacy of the NSIA. In the absence of a favourable ruling from the Supreme Court, a constitutional amendment will be needed to give legal backing to the Funds, “otherwise the NSIA will always be held to ransom by vested interests, about its operations,” says Kayode Akindele, Partner at 46 Parallels, an investment advisory and management firm with offices in Lagos, Nairobi and London. Another option, says Akindele, would be for the NSIA to keep its hands off State Government funds. “[The] NSIA would have no issues if the Federal Government set it up to just manage the [Federal] share of the savings,” Akindele says.
Orji insists that his job is to manage the money he’s been given and not get drawn into the politics playing out in the background. His optimism is strong. “I did not give up my job as Managing Director at UBS in New York to not do whatever it takes to make this fund succeed. This fund is important, it’ll succeed.” He’s counting on support from powerful quarters. “You must give credit to the President and the Coordinating Minister of the Economy. These two people, more than any, have sweated to ensure that we become a fiscally responsible country,” he says.
He also brings solid experience to the table. His various positions and portfolios over the years have equipped him well for the tasks at hand. “Running the SWF is fundamentally a moneymanagement business. And I have actually managed money and given advice to people managing money,” he says. “This is a market I know very well.” During his time at JP Morgan, many of his largest clients were SWFs like the Abu Dhabi Investment Authority and The Kuwait Investment Office. However, he realises that his accountability this time is to the 170 million people of Nigeria and not an elite club of investors or Fortune 500 executives.
As the CEO of NSIA, Orji’s mandate is to manage the three Funds that make up Nigeria’s SWF: the Future Generations Fund, the Stabilisation Fund, and the Nigeria Infrastructure Fund. The NSIA Act empowers him to be the CEO responsible for the execution of the policies formulated by the Board and the day-to-day administration of the Authority.
His vision is two-fold: to guarantee a monthly inflow of fresh savings and to leave behind a significantly larger fund than the one he’s meeting. But he’s emphatic that he doesn’t want to put any figures to it – not to the kind of growth rates he’s anticipating and not to the size of the fund he’d like to hand over at the end of his stint as CEO. He says: “The way I look at it is, if you get more than half your calls right as an analyst you’re a truly successful analyst. My analogy is football. The most successful football manager of our time, Sir Alex Ferguson, has a winning ratio of 54 percent, which means he only wins 5.4 games out of every 10. Trust me, if you have a 54 percent winning rate you’re doing well.”
Much of Orji’s success in growing the size of Nigeria’s SWF will depend a great deal on the politics behind Nigeria’s preferred means of saving. For now, there’s a billion dollars available to him. At less than half a percent of Nigeria’s GDP, this initial sum is small compared to the funds available to other oil-producing nations. Angola, which produces less oil than Nigeria, launched its own Fund last year, with $5 billion. Norway, Orji says, adds a billion dollars in savings each week to its own $660 billion fund. But he’s not fazed. While he acknowledges the importance of launching a SWF early, he also thinks that it’s better late than never. He cites Singapore and Kuwait as examples. Both started SWFs with less than half a billion dollars. Today, their sizes have grown to $200 billion and $300 billion respectively.
NSIA expected to make its first investments in March 2013. The Authority’s Board, inaugurated by President Goodluck Jonathan in October 2012, comprises Arnold Ekpe (Group CEO Ecobank Transnational until December 2012), Ibukun Awosika (entrepreneur), Jide Zeitlin (former Goldman Sachs Partner), Hassan Usman (CEO Aso Savings and Loans Plc), Bisi Soyebo (Senior Advocate of Nigeria), and Stella Ojekwe-Onyejeli (newly appointed Chief Risk Officer of NSIA). It will be chaired by economist Mahey Rasheed, former Deputy Governor of the Central Bank. Momentum is building by the day. Orji says his team is currently writing the investment policy statement. A Chief Investment Officer will be announced any time from now. “We’re doing something bigger than ourselves,” says Special Adviser Kayode Ogunro.
The NSIA announced, in February 2013, the appointment of American investment banking firm JP Morgan as custodian of the SWF, in line with enabling legislation that grants the NSIA the powers to “any time appoint asset managers outside the Authority to manage its assets as may be specified by the Board.” The NSIA funds will be managed both in house and by external parties like JP Morgan.
The Nigeria Infrastructure Fund is the only one of the three funds expected to restrict its investments to Nigeria. For the Future Generation and Stabilisation Funds “there are no geographical restrictions or product restrictions,” says a December 2012 press statement from Nigeria’s Minister of Finance and Coordinating Minister for the Economy.
Observers worry about the possible subversion of the Nigerian fund’s investment decisions by political interests and geographical spread considerations. Suggestions that up to 10 percent of the Infrastructure Fund may be assigned to funding projects in economically disadvantaged states raise fears that some of the money may be compelled into commercially unviable projects. For the analyst Akindele, the importance of clarity and transparency cannot be overemphasised. “[NSIA] should use Norway’s Sovereign Wealth Fund as an example – they have a very public, clear and simple investment policy which they follow to the letter, and you can see their investment portfolio on their website and their financial reports.”
Despite the concerns, in addition to the backing of the President and Finance Minister, one thing Orji will have going for him is his reputation, derived from a stellar Wall Street stint. A senior Nigerian investment banking executive who says he has “many friends in common” with Orji but who has only recently met him, told Ventures Africa he was impressed by Orji’s attitude. “I have a great deal of respect for Uche Orji. He doesn’t believe he’s a superman, that he knows everything and can do everything.” But with a billion dollars at his fingertips, there’s a lot Orji can do.