The Point of Success is Giving Back to Society-Austin Avuru - Africa’s premier report on the oil, gas and energy landscape.

The Point of Success is Giving Back to Society-Austin Avuru

Three and half years after he retired as CEO of Seplat Energy, the London listed E&P firm he co-founded, AUSTIN AVURU runs A A Holdings, a boutique investment firm focused on upstream hydrocarbon portfolio as well as real estate and equity investing. Mr. Avuru is also keen on A A Foundation, a charitable outfit to which a share of A. A. Holdings’ revenues is allocated annually.

A A Foundation, in September 2023, hosted the ‘church blessing’ of the Arrupe Jesuit College, a secondary school it built in Avuru’s home town of Abbi in Delta State. The $7Milllon project had earlier been handed over to the Jesuits, a Catholic Congregation widely acclaimed for running top notch secondary schools. That ceremony came exactly six years after the Catholic Bishop of Warri had dedicated a $1.9Million, Sixty Bed Hospital, which Avuru had built in the same town, in 2016.

The hospital project in itself was a follow up to the construction of boreholes and water taps which Avuru delivered to the town in 2007.

“My emphasis basically is on education and healthcare and a strong dose of Catholic religion”, Avuru had told Africa Oil+Gas Report in 2020; “these are my foundation activities. If you bring them closer to your people, you have fair-minded people growing up properly educated with healthcare available to them. That’s about the best you can do”.

We met up with Mr. Avuru in his office at A A Holdings in Lagos.

Excerpts of the conversation by Akpelu Paul Kelechi:

At the Church blessing of the Arrupe Jesuit College, the Bishop said: “The Lord has provided all that human kind needs, but much of that provision is in the hands of some people and such people are supposed to deliver to the rest of society”. Do you see yourself as one of those vehicles?

“When we exit in 2025, the Jesuit College will not even call on us to do anything for them again; Jesuit colleges run on their own and that’s partly why their school fees is a bit higher than moderate. They are self-funding non-profit so they provide top quality education from the resources available to them from school fees. We will not go back and be subsidizing them, no. That is not how they are structured and that is why we went to them”.

That is truest statement that captures the essence of life that I’ve listened to in a long time. People see their personal wealth as reward for either super brilliance or hard work and so they beat their chest as having been so successful, more successful than everybody around them and that is the reason they are wealthy. There’s no person that believes in religion especially the Christian religion that will have that point of view. A typical Christian should believe that wealth is placed in your hands by God as belonging to him with you as a servant to distribute it. And I believe honestly that that is the truth.

If you read that my biography, you can see so many instances where we have arrived at where we are not because we work harder than others; we did work hard and so forth but I also pointed out people, my own classmates, who have I believe were a step ahead of me that circumstance found them two-three Steps behind you in the fullness of time. It cannot be because you are more brilliant than them or anything like that. It is the same way that you and two other people will set out to do business and you all would be doing the right things but by some happenchance, you do better and you see so much wealth entrusted on you and you turn around and think you should go ahead and celebrate how much more successful you are than the others. Wealth and most of such endowments are God’s; they belong to God and when they are entrusted unto you, you should use them well.

I also think all of humanity believes this. Why do you think that the wealthy in the developed world spend as much as they do on philanthropy? Why do you think Bill Gates will be going around the whole world trying to solve the problems of the planet? He could sit down and just enjoy all his wealth. Warren Buffet will give out 80% of his wealth to somebody and say, go and distribute it. There is fun in living life and being successful in human endowments, it gives you satisfaction. But the moment you start thinking that that’s your personal belonging, you have missed the point and I think that’s what the Bishop was referring to.

One of the buildings in Arrupe Jesuit College

You installed the bore holes and water taps in 2007. You set up Austin Avuru Foundation about 10 years later. Did you always envisage the foundation?

 At no time did I really sit down to plan about it because I am not a politician that would sit down and plan on how to give out so that people will vote for him in the next election, no. I’ve always wished right from my childhood that I had enough to give out, always. I’ve always known that it gave me more inner satisfaction than anything else. In a way, I think I must have taken after my mom. I couldn’t believe that even in her state where she’s a weak 90-year-old, we were talking and my sisters were discussing about the school opening, and all she could ask was: how many of so and so persons’ children were they able to give employment in that place? She’s thinking of how people will benefit from the presence of the school and that’s the first thing that crosses her mind.

It’s the same thing throughout my tenure in and both Platform and Seplat; anytime I go home, once she says I should sit down, I know she’s going to discuss employment for people. So and so person, haven’t you been able to give him a job? Why have you not done this? Why have you not done that? She’s over 90 years of  age and she does it even up to now!

So it does give me real inner peace and satisfaction when I give out especially when you see that glint in the eyes of the receiver that they appreciate what you give them, that it really made a different to the person.

Can you outline the four key focus areas of AA Foundation’s philanthropy?

It is education, healthcare, sanitation and empowerment or poverty elevation. All four are woven together. I believe that if you offer a child proper education, especially a child is endowed to receive education; you have created the future for that child. You now need the child to thrive by providing the fairly decent environment. Just think about drinking clean water. You see, you may not appreciate it because you didn’t grow up in a village like I did. The difference between drinking pond water, brown water from the pond or from a well and drinking clean water might mean the difference between dying at 20 from typhoid in the village and leaving up to 80 years.

When we speak about sanitation, the difference between going to the back of the house to stool and throw it across and flies gather around it and so on, might mean the difference between dying of dysentery a week later and simply being a healthy child that grows into adulthood because there’s clean drinking water. It doesn’t take too much to make that difference so when you talk about sanitation, that’s really what we are referring to.

I knew I couldn’t give water to the entire village with those boreholes we drilled. However, for the villager who goes to farm in the morning, when he returns in evening and he is sure there’s a place he can go and fetch a bucket of clean water to drink, he can use all his muddy water to do all other things but the water he and his family members are going to drink, he knows he can go across and fetch it and that’s what I did with those boreholes. With sanitation, that child that you’re giving education will also be given a chance to live.

Healthcare and sanitation are tied together while education is to provide the future. And of course poverty alleviation is simply this, somebody has an idea that can be transformed into proper value creation and you can support them to achieve that, it doesn’t take too much. We have supported some kind of farming in the village level and some cottage industries. We are not making noise about it. In education, we have paid the school fees of people doing their Master’s degree in Harvard and so on. Again, like everything that we try to do, we’ll try to be very definitive but we also try to create the boundaries so that we don’t do just about everything; which is why we’ve systematically said, those are the four areas and we have concentrated on those four areas hoping that all of them taken together, will simply help to take poverty away from people who can ordinarily live a good life if you give them a chance.

You could have tackled Orogun Grammar School, your Alma mater and Abbi Grammar School, the community college, for refurbishment, but you chose a new build project. Why?

We are already tackling both schools and I will tell you two stories. You know, when you are living in the rural areas, you will almost not forgive these people who run the affairs of our society as governors and president because they are actually wicked.

Abbi Grammar School started when we were kids in 1972, when I was 14 and I was already in Orogun Grammar School, in class 2. They gathered us to go and clear the forest that was going to be Abbi Grammar School, so I’ve known it from the day when we cleared that forest until its glorious days when it produced people in Divisions One and Two. But then, it deteriorated to a point where trees were growing through the roof.  The school enrolment dropped to 82 in the entire school and they were no longer a centre for writing School Certificate examination. That’s how poor it became with government running it. At Platform Petroleum, we had a budget for community development; what we then did was to say, okay, to help these people where I come from, we took 10% of our community development budget to Abbi. Fortunately, the area where Platform Petroleum is operating is contiguous to Abbi. So, if we budgeted ₦50Million, we would take ₦5Million and go to Abbi and that’s how we picked the classroom blocks one at a time. It was direct labour with just ₦4 – 5Million. We turned it around one by one over time; we changed the roof, changed the tiles of the floors and took it one at a time. By the time we did three blocks of six classrooms each, did the principal’s quarters, put a borehole and water supply in there, and in those four years that we did that, between 2008 – 2012, the enrolment went back to almost 400. We breathed life into the school otherwise the school was dead. It was only after that that the government came in and did all those TET Fund things. We revived the then dead Abbi school thanks to part of Platform Petroleum’s community development effort.

For Orogun Grammar School, it is the Old Students that have been on the vanguard to reviving that school. I personally renovated one classroom block and I have made pledges that I have redeemed to Orogun Grammar School Old Students and that is an on-going thing. We didn’t build a school because we’re not doing the others; no. We’re doing all that we can do and of course, you know that in my honour, Platform Petroleum built an entire geology department at the University of Nigeria, Nsukka UNN, where I graduated.

I could have built a secondary school or a university in my name and pump in a lot of money into it but that is not what I am looking for. We chose a secondary school because that’s the foundation really; primarily and secondary school.  I was looking for a secondary school that will be run to world class standard in perpetuity. We went out deliberately to seek approval of the Jesuits; if you look at their schools, the Loyola Jesuits Collage in Abuja and the one they have in Port Harcourt and look at their numbers, you know that you don’t have to tell them what to do. You don’t have to worry about it because it’s not your school, it’s theirs. It’s not a question of saying oh, when Austin Avuru dies, the vision is dead, no. I thought that it would be the right thing to do, build it for them and allow them run it and maintain their standard.

Then you are sure that in addition to those schools around, whether it’s Orogun or Abbi Grammar School that we are renovating, you have a top-notch school that sets the standard for them to look up to for both students and stuff. This is the best thing to do in that environment to raise the standard of education. You know, when you go to Uromi, because Lumen Christi has been in Uromi, it changed narrative about that whole area. Lumen Christi is for boys and Presentation is for girls in Benin. The standard of education in the whole of Edo State changed because of those two schools run by the Catholics.  When you set such standards it helps to elevate the others who aspire.

How much will you have spent by the time you exit funding the school in September 2025?

Our original budget was to spend a million dollars a year for 5 years but once we started, we knew that wouldn’t do. In fact, 2023 was our highest spend year because once we set a date for the school to take off, there is a minimum that must be in place because the school couldn’t take off without you fencing it for instance; you were putting buildings in place but you have not fenced the place. Imagine fencing 18 hectares of land. There must be water also and there must be electricity. By water, what I mean is not just the water but the entire reticulation around the entire place so that any other building can just hook up to the main supply and the same thing is applicable to electricity as well. With all of those things added we found out we had spent three times what was our annual budget in the fiscal year of September 2022 to September 2023.

All the things we had committed to putting there and now, we believe that we will be spending about Seven (7) Million US Dollars over those five years but it could be slightly more. We deliberately put our budget in dollars so that we are not battling with exchange rate-based inflation. Buildings that could have cost us ₦200,000,000 are now costing us ₦400,000,000 to build but in dollar terms, they are about the same price so it is safer for us to just budget in dollars. In 2020 when we started, we could have told you that our plan was to spend ₦3Billion but in today’s reality, we would be spending ₦6Billion but in dollar terms, there is not much of a difference. The figure is somewhere around $7Million over the next five years.

The medical centre was built at the cost of around $2Million without the cover of AA Foundation. How do you ingratiate such earlier project, those done pre-AAF into the overall AAF operation?

Yes and we have added a few more things to it since then but between 2002 and 2020, I was either in Platform or Seplat as Owner-Manager. This means that I have shareholding; that also means I earn revenue beyond my salary. As an individual, those revenues were coming into my coffers up to the point where I retired in 2020; up until that time, those revenues were coming in as Austin Avuru’s revenues and I would use part of it to do those things you are talking about. As part of my restructuring as I was getting ready to retire, I then setup A.A. Holdings and everything that I own as an individual: my shareholding in Platform, my shareholding in Seplat and now in Pillar and a few other things were aggregated into a trust fund called A.A. Holdings. So I no longer own those things and A.A. Holdings pays me a salary now. Because everything now goes into A.A. Holdings, everything had to be done properly. If I had written a will, the beneficiaries of A.A. Holdings would have been the beneficiaries of the will.

A.A. Foundations is also a beneficiary of A.A. Holdings so it is not just my wife and children and A.A. Foundation owns 15% of A.A. Holdings. The way we run it is that, 15% of our annual budget at A.A. Holdings goes to A.A. Foundations to do its job and that is why we do not look for external funding. We use the little we have to fund whatever project we choose to fund and that is the structure.

What we have done is to move from individual earnings into earnings that are aggregated into a trust and I am managing the trust on behalf of those that will succeed me.

16 years ago, you drilled four wells in Abbi. Has that number increased?

No, it is still those same four wells. We make sure that they remain functional by having somebody with a small motorcycle and a generator who goes around every morning and evening and pumps the water so that every time someone from the village goes there to fetch water, it works.

Do you have plans to increase the wells?

No because in-between, there has been all those World Bank projects and the like that other people have done but after one or two years, they won’t work again. If you drill a borehole, somebody must be responsible for it to work every day. So we don’t need more drinking water boreholes because the way we located the wells is such that they are located at the four corners of the town so that average villager won’t have to go too far to get water. That was intentional.

Let’s go back to what the Bishop said again. Do you have a template for what the wealthiest Nigerians should do to help their country and the role they should play vis a viz what Government’s roles should be?

The average wealthy person knows that the excitement is in working very hard to create wealth and make money but after you have created the wealth, you just find out: so what? I believe that every wealthy person should first go through the excitement of creating value and creating wealth but after that is done; he should ask himself what he wants to do with it. If wealth is not created for the public good, then it is not wealth. Whether it is philanthropy or creating jobs and redistributing wealth to people through job creation, wealth has to be distributed because wealth belongs to God and it was handed to you for proper distribution.

Can philanthropy take care of all of Nigerian society’s needs?

No. Philanthropy is only in response to what we have talked about several times that the wealth belongs to God and that you are only playing your little role in redistributing it because it was placed in your hands. It doesn’t take away the role of societal governance; there has always been governance since the medieval times which means that there is a structure that aggregates well from all those they are taking through taxes that can be used to generate what amounts to the general public good. You cannot take that away and that is governance.

For individuals who also see wealth entrusted to them should not lock it up somewhere; they have to also redistribute it and to redistribute it means doing something for the public good.

The $7Million you talked about is coming from the investment of A.A Holdings. How much is the investment boutique A.A Holdings making to be able to fund a project for $7Million?

A.A. Holdings tries to spend between 12 and 15% of its annual budget on philanthropy through A.A. Foundation and that is the way it is structured. Those sums of money are not arbitrary and in a year like this where we have over spent, we are going to have to make it up. There is proper planning, budgeting and execution both in A.A Holdings and its affiliates.

Duomo Lulu Briggs, chairman of Platform Petroleum, pledged the sum of 250Million Naira to the AA Foundation. That’s $280,000. Is that going to be added to the money set aside for Arrupe or you’d look for another project for it?

They have already paid and that is the best thing that has happened to us at A.A Foundation in recent times because as I explained to you, we have really over spent and we are  under financial pressure to get that facility ready for use. So essentially, what we were supposed to finish in September 2024 was what we were forced to finish in September 2023 because there are a certain minimum requirements that must be met before they can start. When Duomo pledged on behalf of Platform where he is the chairman the sum of N250Million, it was a life line. They acted swiftly and four days after his announcement, they had paid. As I speak to you, ₦150Million of that N250Million has already been disbursed to various vendors and contractors whose payments were due.

Where is AA Foundation going after 2025? Will you  be called upon to keep helping with the school infrastructure after some time? Will you keep refurbishing the Magistrate building and the Police station in Abbi? Will you keep changing the cars for the Officiating Minister of the Catholic Church in the community? Or will you be doing other things?

The good thing about the Jesuit College is that, when we exit in 2025, they will not even call on us to do anything for them again; Jesuit colleges run on their own and that’s partly why their school fees is a bit higher than moderate. They are self-funding non-profit so they provide top quality education from the resources available to them from school fees. We will not go back and be subsidizing them, no. That is not how they are structured and that is why we went to them.

For the magistrate court buildings and vehicles, those are the examples of the failure of government. The police station in my village, I had to be the one to go and refurbish it, I have to provide them with a vehicle. For the magistrate court, with an actual magistrate there so it wasn’t as if the court wasn’t there, I had to be the one to spend money to make it look decent for the magistrate to dispense justice. If you go there before we renovated the place, it was a rat hole. Those are the failures of government. We shouldn’t be doing those things; we should be doing things to compliment what they are doing, not taking over the role of government. I didn’t mention that we also put Two kIlometres of drainage along that same road and it cost us money to do that which we shouldn’t be the ones doing. But you sit there and the government is doing absolutely nothing.

As we go along, our educational spending will be shifting from infrastructure to the softer things. For instance, we have paid ₦32Million school fees for eleven kids and we have paid ₦11.5Million as our share of the cost of running that school. Half of the cost of running the primary school comes to us and this is just JSS1 and Primary 1. So when the school is in full session in six years’ time, we probably won’t have eleven children on scholarship. Assuming we have 30 children on scholarship by that time, that easily comes to almost a hundred million naira and the same thing is applicable to the primary school. So you are going to be seeing a shift in spending from just infrastructure to maintaining the scholarship obligation that we have. Because we have a finite budget and because we know what our current liabilities are, it is the remainder that we can then put in other projects going forward. We are driven by how much we have each year and it is finite and almost predictable. It is a business that we do and we know how much revenue that we get. If we are dedicating a certain amount on projects the next year and if we are saying 10-15% of that goes to the foundation, it means that when we are planning the work programme for next year, we know what is going to the foundation because we know what our current commitments are and therefore, we know what new projects we can take on. It is therefore up to us to pick what projects we can fund within those key four elements that we have discussed. It is not just limited to Abbi.

So apart from Abbi, which other community are you looking at?

We can be anywhere. There are projects that have been delivered on our behalf. I mean, we went to Nsukka to build a Geology Department and in the Faculty of Sciences, it is the best facility that they have till date. It was built and fully equipped so we can be anywhere. When we know that there is a dire requirement and we know the impact of what we do would be far reaching in those four areas, you can find us there because we are not really restricted by geography.

Female Ward of Abbi Hospital

You paid 2.9Million per student and you do talk about mommy saying you have not done anything about so and so person’s job search, are those monies paid with these kinds of things in mind?

Now that we are getting better organized and putting everything under the foundation. Those days, my secretary had a list of all the people that we would send their school fees and there were different people in different schools. People come to me and say my name is so and so and I finished from so and so school and you paid my school fees. I don’t know them.

She just takes the name and puts on the list and then send the money but now, we are organizing it in a more structured way. But yes, paying the school fees of those who need it is part of what we do and in the specific case of the school, we went out of our way, my elder sister and Jonnie who runs the foundation, went out of their way and gathered about 60 children, some of the most brilliant ones that they could find in the primary schools and organized six weeks of extra mural studies to prepare them for the entrance exam into the school. The reason they did that was that soon, the school will be starting and it would be somehow if they didn’t have a single pupil from the community. They had to work extra hard with past question papers and so on and fortunately, eleven of them were admitted. After the admission however, we found out the next problem. The parents of those children were preparing to sell their farmlands in order to pay for the school fees. We had to gather all of them together and say, please don’t worry, since we put you into this, we are going to take care of this responsibility. Which is how, we initiated a scholarship scheme in a manner of speaking that says: any kid that is admitted into that school, because you can only be admitted on merit, whose parent lives in Abbi, we will take care of that child’s school fees because the assumption is that for any parent who live in Abbi, paying that school fees is a huge burden and we do not want to deny a brilliant child who is able to get admission on merit the opportunity to excellent quality education.

 

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