Nigerian fuel king Femi Otedola takes on country's power deficit

Ancient Greek philosopher Aristotle once said: "Give me a child until he is seven and I will show you the man."

You could argue that Nigerian billionaire Femi Otedola is a case study for this. Despite dropping out of school early, he has made a fortune from the fuel trade in one of Africa's largest markets.

A lifetime of money-making later, Otedola could be forgiven for resting on his laurels.

He is the joint 16th richest person in Africa, with a personal fortune estimated in November by Forbes at $1.6bn.

He rubs shoulders in that list with formidable South African business leaders Jannie Mouton, of investment company PSG, and never-say-die supermarket king Christo Wiese.

But the lithe 63-year-old, immediately recognisable with his trimmed beard and glasses, is far from done. Having conquered the oil market, he is now turning his talents to one of Nigeria's most intractable challenges: energy supply.

A fuel king rises

It's a challenge he feels well equipped for giving his enormous success in the cut-and-thrust world of domestic fuel. His earliest ventures in oil were inspired by a lightbulb moment when he ordered a delivery of diesel and saw a broken-down truck arrive three days later. Zenon, founded in 2003, took stakes in diesel depots and other downstream infrastructure, building a formidable position in Nigeria's domestic fuel market.

By 2007 he had leveraged that success to acquire a controlling stake - and thus roles as chief executive and chairman - at Africa Petroleum. By this stage, Otedola already enjoyed a position as one of Nigeria's most successful entrepreneurs.

But the international oil market is not known for its stability. When crude prices crashed in the wake of the global financial crisis of 2008, from around $146 to less than $40, African Petroleum, soon rebranded as Forte Oil, had to undergo a brutal restructuring, including huge job retrenchment and asset sales to pay back debts.

That fightback proved crucial, and Otedola's tough decision-making - and strategic positioning in the fuel market - eventually paid off. By 2019 he had decided to sell his remaining 75% interest in Forte Oil.

He subsequently invested i power generator Geregu, which uses natural gas-fired turbines to generate power and claims to have current installed capacity of 435 MW.

Switching to power

After so much success in fuel - albeit tempered with the occasional market crash - what informed that decision to move from a proven cash generator to invest in the uncertain field of power generation? "After building Forte Oil into a market leader, I felt it was time to reposition for the future. The downstream oil business had served its purpose, but I could see the real opportunity - and Nigeria's real challenge - lay in electricity generation.

"In 2013, we acquired Geregu Power after extensive due diligence. Expert consultants advised against distribution companies and pointed us towards generation. That decision saved us billions and positioned us in a sector vital for Nigeria's long-term growth," he says.

Both Otedola and Nigeria have their work cut out. Nigeria may be the biggest economy on the continent, but it lags when it comes to power generation. Nigeria has more than 230m people, yet around 85m - equivalent to the population of Egypt - lack access to power. South Africa struggles to supply its population of 63m with just under 50,000 MW installed capacity; Nigeria struggles even more with an estimated 13,000 MW.

Power cuts cost the Nigerian economy dear, as Otedola knows only too well. "It is crippling. When the grid fails, the economy runs on diesel: and I know, because that was the origin of Zenon. Homes, factories, hospitals - all depend on generators. This is wasteful and unsustainable. No major economy can grow without reliable power," says Otedola.

"Energy remains central, because without it no other sector can thrive. Beyond that, I see promise in infrastructure, technology and agriculture: the sectors that can transform lives at scale. I believe in businesses that close gaps where inefficiencies exist. Power generation is not an 'all-comers' affair. You need vision, patience and capital.

"My plan is to continue consolidating Geregu as a benchmark in private power generation, with world-class governance and strong partnerships, including with State Grid Corporation of China. We plough profits back into operations, and we see expansion opportunities as demand rises."

Has fuel had its day?

Otedola keeps an eye on the progress of other Nigerian entrepreneurs, including Africa's richest man Aliko Dangote and his ambitious 650,000-barrel-a-day oil refinery in Lekki Free Zone, not far from Lagos.

"I admire Aliko's vision. Many thought him crazy when he acquired land for billions [of naira]. Today, the refinery will be transformative, making Nigeria self-sufficient in refined products. It's a lesson in self-belief - the same quality that drove me into power generation," he says.

Yet, he believes his country leans too heavily on oil. "We remain over-reliant on oil. Successive governments have recognised this, and the current administration is intensifying efforts to diversify. We are seeing major pushes into agriculture, manufacturing, technology and services, and these sectors can employ millions. I see us prioritising diversification and enforcing fiscal discipline which will pay dividends. If we stay the course, the results will be lasting."

Nigerian businessmen Aliko Dangote (L) and Femi Otedola (R) arrive for the opening of the second Lagos domestic airport in April 2007. (Photo by PIUS UTOMI EKPEI / AFP) 'A land of enormous potential'

One of Nigeria's big tasks, ahead of elections in 2027, is to spruce up its image, solve its security and infrastructure issues, and try to win over investors. Otedola, ever the optimist, thinks his country can do that.

"Nigeria is a land of enormous potential, and I believe the current government has made important strides in laying the groundwork for inclusive growth. We have world-class entrepreneurs, some of the fastest-growing tech companies on the continent, brilliant young people driving the creative sector, and an agricultural base that could feed Africa.

"While millions remain outside the formal economy, I am confident that with continued reforms already underway, such as improving infrastructure, expanding social investment programmes and supporting MSMEs [micro, small and medium enterprises], we will see more Nigerians brought into productive economic activity."

Is the environment getting any easier for foreign investors? "We have seen significant progress in roads, rail and airport modernisation, and Lagos airport itself is undergoing improvements to enhance the first impression investors receive.

Policy consistency is also being addressed: initiatives such as the Presidential Enabling Business Environment Council have simplified procedures and reduced red tape. If we stay on this path, and continue to strengthen regulatory stability and investor protections, Nigeria will become one of the most compelling investment destinations on the continent."

Many of Nigeria's world-class entrepreneurs are making it in other capitals of the world. Many in Lagos joke that London could be Nigeria's 37th state.

Once Nigerians have made it, should they head back home to plough their earnings back into Africa? "Yes, but conditions must encourage them. Patriotism matters, but business logic matters too. If Nigeria creates the right climate - reliable power, rule of law and returns on capital - our entrepreneurs abroad will come back willingly," Otedola says.

He insists that entrepreneurs - whether foreigners or émigré Nigerians - must look beyond skewed perception of African risk. "'Africa risk' has become a lazy shorthand in global finance. The reality is that African markets, including Nigeria, have produced some of the highest returns anywhere. Across the continent I see governments taking steps to strengthen transparency, protect contracts and reassure investors through consistent policy.

"Of course, perception lags behind reality, but I believe Nigeria is setting a positive example of reforms that reduce uncertainty. When I went into diesel in the 1990s, people saw only chaos, but I saw opportunity. That is the mindset investors need to adopt today: Africa, and Nigeria in particular, is not just risk, it is reward," he says.

And having conquered fuel and moved on to power, few embody the risk-reward dynamic of Nigerian entrepreneurialism quite as much as Femi Otedola.

Origins: from nail-clipper to fuel king

Femi Otedola earned his first money clipping the nails of his father's guests at the family home on Victoria Island, Lagos. It was something he had planned well before his seventh birthday. He would give his father's friends an invoice, out of his own receipt book, in return for a few coins. He had a grand name for his clipping business: FEMCO.

One of his customers was the larger-than-life John George Luttrell, the big blond-haired midwestern American who was the managing director of Mobil Oil Nigeria.

The big man stretched back in his chair and yielded, magnanimously, to a nail cut from one of Africa's future billionaires. Maybe it was out of politeness, maybe this was because Luttrell, according to his obituary in 2010, had respect for humble graft. He had grown up in poverty in the dusty farmland of Missouri in the depression of the 1930s and started out as an oil rig worker during a break in his university education, paid for by a local doctor.

"I was shy but confident - self-assured enough to sell my services to anyone who entered my turf, but reserved enough to know the line that separated cute from intrusive," recalls Otedola a lifetime later.

This encounter with entrepreneurialism lends context to Otedola's journey as an entrepreneur. The host that day was his father, Michael Otedola, a journalist by trade and then Mobil's head of corporate affairs and, still later, the governor of Lagos. He had good contacts and plenty of support for his young son.

"It is true I had support, but support alone does not guarantee success. I still had to build Zenon from scratch, face failures, and climb back after collapse. Everyone's journey is different, but discipline and self-belief matter more than background," he says.

Along the way did he have many detractors, I ask?

"Plenty. Some friends even plotted against my father while he was governor. I learned to cut off negative associations and focus on my path. Critics will always be there, but results silence them," he says.

Otedola has always gone his own way. Another early sign of that maverick streak that so often drives entrepreneurs came when he started at the University of Lagos Staff School. He went to lessons carrying a briefcase - one of his father's hand-me-downs. Every day, he arrived to the laughter of his schoolmates.

"I wanted to look like a big man, a businessman, like the entrepreneurs and senior officials in the public and private sectors who all carried briefcases," he writes in his new book Making It Big.

Otedola eventually dropped out of school. This paucity of exam certificates has brought down criticism upon many an entrepreneur and Otedola is no exception, though he is pleased to see mindsets shifting in Nigeria.

"It's a mindset issue. In many societies, education is equated with success, but in Nigeria, skills and entrepreneurship are increasingly recognised alongside formal degrees. We must encourage all forms of talent. What matters is vision, resilience, execution and results, not only the paper you hold. I believe Nigeria is moving in the right direction by creating initiatives that support both graduates and self-taught entrepreneurs."