Former President of Afreximbank, Dr. Benedict Oramah, has urged Africa to build its own artificial intelligence models rather than remain a supplier of data to foreign technology firms, stressing the need for greater economic independence. In this interview with Nume Ekeghe on the sidelines of the just-concluded IMF/World Bank Annual Meetings in Bangkok, Thailand, he argues that Nigeria can leverage its cheap gas to power data centres, establish technology parks and attract investment, while calling for massive infrastructure financing, industrialisation and deeper continental trade to drive growth and create jobs
You have completed your tenure at Afreximbank and established Marob Strategies and Consulting, what services does Marob Strategies offer and what are your plans for it?
I just completed my two terms of office at Afreximbank. You know the journey we embarked on, which I’ve been involved in for the past 30 years. Fragmentation as you know is the bane of the continent. Finishing at Afreximbank does not mean that the problem has been solved. As I moved on to other things, I kept focusing on the challenges that we had to solve, and there aren’t enough soldiers to attack that problem. Retreating when you still have energy would betray the commitment to the continent. I never saw my departure from Afreximbank as retirement because, thank God, I still have the energy and the faculties. It would be a disservice to the continent if the experience, contacts and capabilities acquired over time were lost overnight. Marob is the strategy firm we have established. I have always believed that one of Africa’s challenges is the proper articulation of strategy and its execution. That is what I created Marob to do. It is not primarily about making money, although we have to generate revenue to meet our obligations. Essentially, it is about continuing to develop strategic interventions that I believe the continent still needs, helping African institutions articulate their strategies, and mobilising the capabilities and resources required to execute them efficiently.
I believe we can do even more for the continent through Marob because it gives me greater freedom to think and challenge conventional wisdom. Once we develop and test these ideas, we can take them back to Afreximbank, other African multilateral financial institutions, commercial banks and other organisations working across the continent.
Your work with Dangote’s refinery and its subsequent share offering has attracted attention. What informed Afreximbank’s support for the project?
We expected the reception because Dangote had built a brand, and we helped him build it. We are happy that Dangote became what it is and the refinery itself. It’s all credit to Alhaji Aliko Dangote’s perseverance and determination. For us at Afreximbank, when we were supporting him, a bank can only do so much. We began by doing principal financing, but we were looking for entrepreneurs. A bank has money, but a bank is not organised to do certain things. For a bank to be effective, you need entrepreneurs who are credible, trustworthy, who can envision, execute and strategise. Dangote embodies all of this, and that refinery, for me, was a no brainer to support. I recall that initially, our first facility to the refinery was almost a billion dollars. When we went to the board, I didn’t go there to argue about credit. My argument to them was that when we see this kind of thing in other parts of the world, we say these people are doing great things. This one is here. This is our project. I told them I didn’t think this is a matter of credit, but a matter of continental pride and continental survival. Since we started that relationship, Afreximbank has provided $18 billion. Most of it was to the refinery.
I must also say it’s not just me. There was no way I was going to do it alone. The management, everybody, believed in it. It was like a mission, and I bought into it. When it got to this stage and we had to do the IPO and the private placement, I was very pleased that Alhaji recognised all of that and gave us the opportunity to participate in a big way. We worked with Afreximbank to underwrite about 25 per cent of the private placement and also about 24 to 25 per cent of the IPO. That was a significant opportunity, and I believe it shows Alhaji’s appreciation of the road we travelled together.
Afreximbank always achieves smooth transition between presidents, unlike many African institutions where former leaders are pushed out. Why is continuity important?
I think people who fight like that are small people, and people who doubt their competence. Why would you throw away a trove of wisdom that will make you stronger? I’ve done my own. I’m gone. But if I can contribute to making President Elombi successful, I think it would be stupid of President Elombi to tell me not to contribute because it’s him. I was in the bank from day one, so I know all the challenges. I was privileged to have worked very closely with all the presidents as an adviser and special assistant, handling very sensitive issues, research and strategy. That experience helped me later because there was hardly anything we went through that I didn’t know about or participate in resolving. As president, why would I throw that knowledge away? There were times when I had to go back to my predecessors for advice. I remember when we wanted to develop the idea of export trading companies. Rather than issue a request for proposals to find an expert, I told the team to bring in a former president of the bank because I knew his experience in export trading companies. He helped us undertake the study, and that work eventually led to the establishment of the African Trade and Distribution Company. If I had burnt that bridge, would I have been able to go back to him? Even if we paid him more, he might not have been willing to help us. That is how we approach continuity at Afreximbank. It is not just about presidents; it also applies to staff. Whenever we have a task that a former colleague can handle, we bring them in. It is not only because we want to support our colleagues, but because we know their capabilities and can identify who is best suited to do the job. So, I would be surprised if President Elombi discarded that experience. In fact, he has continued to involve me, and I have had to tell him that I also need to attend to other things. For us, it is about preserving institutional knowledge and using the experience of people who have helped build the bank to strengthen the work that continues.
You earlier spoke about building a continental strategy and advisory firm. What problem are you trying to solve?
The big picture for me is that we build a number one continental strategy and advisory firm, so that we no longer have a situation where our people run to someone else to do the things we can do. We are already rapidly going there because of the kind of mandates we are getting. I would rather find partnerships than tell a country, company or bank that comes to us that we are overstretched. Ultimately, we may become the nucleus of a federated advisory platform that brings credible advisory firms in different African countries under one umbrella, so that we can give our people the right advice.
Your Pan-African approach to business is quite strong. Where does this conviction come from?
Everybody in the banking business, including our governments and corporates has to regard themselves as economic freedom fighters. We are combatants for economic freedom. Those in banking and financial services are engaged in financial guerrilla warfare. Our sensibilities have been numbed by the so-called belief that things are good. We did not understand that there is still economic bondage. It is only now that we are beginning to break away from it. During the struggle for political independence, many of those who fought for it went into the bushes, fought with guns, were killed and were jailed. They were ready to sacrifice and pay the supreme price. That is why we can go around, carry flags and say we are a nation. But if you read the works of people such as Nkrumah and Nyerere, you recognise that this was just the beginning. Political independence gives you the platform to achieve the ultimate independence, which is economic independence. We were quickly sabotaged in pursuing this. There used to be a time when the issue was the struggle against neocolonialism. It quickly disappeared from the lexicon, so that we no longer remembered there was something to deal with. The fight we are in now is not going to be fought in trenches, but on factory floors, in technology incubation centres and so on. It is not going to be fought with brute force. It will be fought with ideas. Capital is key, not bullets. That capital includes human capital.
Afreximbank supported several initiatives aimed at integrating African economies. What do these initiatives say about the continent’s ability to achieve economic independence?
I’m very proud of what we did at Afreximbank during my time, and even before, under my predecessors. The first meeting of the Organisation of African Unity in May 1963 produced key decisions. The leaders asked the United Nations Economic Commission for Africa to conduct a study towards delivering a continental free trade area, an African Payments Union, a Pan-African trade fair, transit schemes and a strategy to break the technical attachment of currencies to foreign currencies. We didn’t know this until after we had done some of the things ourselves. In 2018, the AfCFTA was launched, and we supported the process. We were paying the salaries of quite a few people. Even the negotiations of protocols were supported by grants we provided. We launched the Pan-African Payment and Settlement System (PAPSS), which the African Union adopted. We introduced the Pan-African Transit Guarantee Scheme, and we organised the Intra-African Trade Fair. We never saw that 1963 resolution. We only discovered it after we had asked a team to examine the African Union’s archives and identify decisions from many years ago that were still relevant but had not been implemented. When they came back and told me what they found, I asked, why did it take 60 years? The leaders knew that after independence, we had to move quickly to integrate our economies.
At the AfCFTA signing, you said signing papers would not open borders. Why has implementation been difficult?
We have really progressed. One of the surprises for me was when we came to Rwanda to open the papers for signing the AfCFTA. We thought 21 countries would sign, based on all the discussions. But as the books were opened, I think 45 countries signed that day. The problem is that we have been divided and fragmented into these atomistic units for so long. There are vested interests and so much fear of losing authority or power that people think will happen if they open up and start implementing what they signed. To be fair, I don’t expect everybody to be so open-minded. You just need a strong nucleus to get things moving. It is moving now. I think 24 countries have created their tariff schedules, which means they can implement the agreement. Non-tariff barriers remain the biggest problem. It took the Europeans almost 50 years to achieve what they achieved. It will take time, but I always knew that businesses would push the boundaries. People always said we had infrastructure problems and that was why we were not trading among ourselves. My view was, and remains, that Africa has infrastructure challenges, but the infrastructure deficit is a generalised challenge. The stock of infrastructure on the continent today can carry, depending on the year, between $1 trillion and $1.4 trillion of African trade. The question is, why is Africa’s share of that trade only between $170 billion and $200 billion? Why is it not $800 billion? The infrastructure stock can carry more than $1 trillion, yet our share is only 15 to 16 per cent. Why is it not 30 per cent? China’s share of our trade is higher than the trade we do among ourselves. The issue is trade information. We don’t know what is going on around Africa. Our traders and businesses trust Chinese, Europeans and Americans more than they trust the person next to them because they don’t know what is happening in neighbouring countries. We have factories in Ethiopia manufacturing leather products that import semi-processed leather from New Zealand at a higher cost than Burundi exports the same product to the world. We have many such absurdities. That’s one of the reasons we created trading companies, trade information platforms and the trade fair.
How can Africa bridge its infrastructure gap when governments cannot provide all the required financing?
I always knew there was no way governments could finance the infrastructure gap. To bring African infrastructure to world standards would require investment of about $100 billion a year. That is more than a trillion dollars over time. I asked my team to aggregate the budgets of all African countries, and I found that it would amount to about 60 per cent of their total budgets. You don’t need to be a rocket scientist to know that would not work. You need private capital. The only way is to demonstrate that there are businesses. Once businesses demonstrate the opportunity, private capital will finance infrastructure. People who invest in commercial infrastructure don’t need anybody to plead with them. The business case will attract them.
What policies should Nigeria and other African countries adopt to create decent jobs?
I don’t see anything other than a better economy that grows. Then you have to invest in human capital. There are jobs people are looking for people to fill, but they cannot find them because we have so many people who do not have the training and education to fill those jobs. The birth rate is very high, which is good, but we have to invest in human capital. We have to invest in quality education right from the first year in school and produce the right calibre of skills for the decent jobs we are talking about. I went to a company in Nigeria that does additive manufacturing. They wanted me to come and help them. Initially, I was skeptical, but when I saw what they were doing, I was surprised. It is 3D printing. You need skills in computer-aided design, material science and other areas. They have to go to India to get some of these skills. When you expand a refinery, you don’t necessarily double the number of jobs because some things can still be done by the people already there. But the refinery may start looking for skilled people and not find them. There may be thousands of jobs that it can only fill partially. I am the chairman of a number of companies, and I know the challenges we face. At our hospital and African centres of excellence, we sometimes struggle to find people with the appropriate skills. We prioritise quality service. It is not charity. The economy has to grow to create opportunities, but the system has to produce the quality of human capital that the growing economy needs, through formal and vocational education and relevant skills. I must also add good healthcare because healthcare is part of human development. We have to read the trends and create financing arrangements that support young people who want to start businesses. Some will fail and some will succeed, but the few that succeed may become the Google or SpaceX of the world. Except for a few countries, our educational systems are not producing the right kind of people. Our universities are not being funded to train people, and only a few have the capabilities. We also need vocational education because quite a lot of jobs will emerge from labour-intensive manufacturing. There will be repetitive jobs, technical jobs and jobs created by expanding manufacturing. These can be decent jobs. If somebody has good skills, they will get paid well and can set up their own company.
How can African countries use artificial intelligence to drive industrialisation and economic growth?
AI is a fact of life now. But we should make sure we don’t become those who are just applying models and using what other people have done. We should also generate our own models. One of the things additive manufacturing does is shorten production time. You don’t need to keep physical inventory. You keep the computer design and use it when needed. The waiting time for certain parts can sometimes be 15 months, but they can manufacture them in days. One of the things the Nigerian company is doing is manufacturing parts for the oil industry, where equipment is very old. Some of the parts no longer have designs, so they use infrared to examine them and create the designs. They told me that what used to take months to design now takes hours with AI. China is leading in AI because of its population. They are generating data all the time. In Africa, we should not allow ourselves to be feeders of the data that people use to build models. We should build our own.
To do this, you need data centres. Data centres require huge power, and we haven’t even met the basic electricity demand. My attitude is that we can build technology parks where we concentrate energy and diversify sources, using solar, gas and whatever is available. We are working with people on an AI factory and technology park. Nigeria is in a good position because we have cheap gas. The country should make a decision to build technology parks and sell electricity at a price that attracts investment. You will see heavy investment, people who can do the civil works, people who can work in the data centres and people who bring equipment. Some investors don’t want to do the civil works. They want to set up their facilities and lease the infrastructure.
What would you consider your major legacy at Afreximbank, and how is the bank performing under your successor?
The legacy is the people you leave behind who continue the work, and the way they continue to think and do things. At Afreximbank, we amplified the mantra we work with: ‘If it is possible, it will be done; if it is impossible, it can be done.’ I believe we proved that we can be architects of our own future and not rely on anybody for anything. We were not driven by so-called international best practice. We focused on African best practice, rooted in our realities, ambitions and priorities.
The idea of people coming to exploit us and saying they are helping us is something we quickly made sure was gone. Nobody can deal with us except on a win-win basis. You are gaining, we are gaining. We are not going to beg you. If you give us something, of course we will take it, but with dignity. You cannot give it to us and make us look like beggars.
The way we do things in Afreximbank is that we have overlapping strategies. President Elombi is completing my second strategy, which ends this year. They have just completed their retreat, and they will launch a new five-year plan starting in January. Some of the things we started are multi-year endeavours. They don’t just stop. The fact that he is giving impetus to those things we worked on together is important. He was part of them, so I don’t see him suddenly repudiating what he was part of. That is not our culture in Afreximbank. We debate a lot. Everybody has a chance to bring their ideas when we conceive things. That’s why most people support whatever we commit to, and that’s why we execute them. It looks seamless because we debate things thoroughly and consider different views. Financially, so far, things are very good in my view. They are doing very well. In terms of development work, he has taken the course we set and is emphasising value addition and manufacturing. I don’t think the strategy he will announce will deviate violently from the direction of travel we had set for the continent. The Pan-African Transit Guarantee Scheme is being continued. The Pan-African Payment and Settlement System is becoming continental. The African Trade and Distribution Company has been established, and the Africa Energy Bank is expected to launch. The constitutional financing window will bring a new way of doing concessional financing. Some of the existing concessional financing arrangements make capital too dependent on governments. This window will provide concessional financing to the private sector. Take Nigeria for example, somebody wants to build a textile factory. He has to build his own power plant, water treatment plant and road to connect to the factory. When he brings the proposal, the infrastructure costs can account for 16 per cent of the project cost. If he had all these facilities, he would only need to seek financing for the actual project. His competitors in India, China, Malaysia and Indonesia have these facilities. He comes to you with a bloated project cost and is expected to compete in the global market. How can he compete? What we proposed with the constitutional financing window is to break the financing into two. Afreximbank would commercially finance the actual project, while the concessional window would finance the infrastructure that government ought to have provided. They would blend the financing to make it more patient, with a longer tenure. Then the entrepreneur can dream of competing with somebody else. That’s how we manufacture. That’s how growth will happen to create jobs.