Sijibomi Ogundele: Navigating Relentless Rise in Costs Major Challenge for Businesses in Nigeria

Last week, the Nigeria police was said to have quizzed Sijibomi Ogundele, the Group Managing Director of Sujimoto Holdings, the Czar of Luxury Real Estate Development, and the mastermind developer behind the renowned Giuliano and other audacious projects. Adedayo Adejobi spoke with the real estate mogul, who reeled out the shocking reality behind the spurious Allegations. Excerpts:

you made the headlines last week on allegations of a transaction gone sour with a client who alleged fraud. What really happened?

 I arrived at the Force CID office in the capital city of Abuja with a trove of evidence: the title documents of the Leonardo project in Banana Island, approvals from Lagos State, and all pertinent papers proving our utmost commitment to transparency with the audacious LeonardoBySujimoto project. We clarified that there was nothing regarding the offences of obtaining money under false pretense, fraudulent misrepresentation, and criminal breach of trust, and the only offence we encountered was a delay, which was a result of external economic forces affecting our nation. Rising material costs, a plummeting currency, a cascading effect of inflation, and a shifting economic landscape have all conspired to slow down our ambitious endeavour to design and build a landmark property that not only surpasses the iconic 1979 Necom Tower as the tallest and most luxurious project in Nigeria, but also sets a benchmark standard for luxury living across Africa. The past few days have been uneasy for me and my business. This stems from a transaction we undertook a couple of years ago involving the sale of an off-plan apartment to one of our valued clients.

Despite securing the land and obtaining all necessary approvals, we encountered significant obstacles that have delayed our project delivery. After numerous conversations and negotiations, the client in reference demanded a refund for his payment, which was originally made in Naira. At the time of the transaction, the exchange rate was N420 to the dollar; today, it has depreciated to N1,750, creating a staggering deficit of N1,330. This poses a critical question: who will absorb this loss? Although the exchange rate volatility is neither the client’s fault nor ours, it is a reality that profoundly affects our operational expenses and capital expenditures, which are largely dollar-denominated. Given these circumstances, we needed to clarify our position with the authorities at the FCID regarding allegations of obtaining money under false pretence, fraudulent misrepresentation, and criminal breach of trust. This was a false allegation; we provided comprehensive documentation to demonstrate that these claims are unfounded, as the evidence provided to the FCID authorities gave true insights into the transaction conducted.

 Our successful clarification with the FCID underscores our commitment to upholding our integrity. Addressing our clients’ concerns is not merely a business obligation to me; it remains a testament to our commitment to transparency and the capital of trust. I received numerous advice to take a longer lane to pursue legal action against this whole situation, but I will never do that. However, I chose to thread paths rooted in dialogue and understanding. I met with the client involved, acknowledging that while the economic downturn and our delays may not be his concern, we were able to reach an amicable resolution. 

Were you in any way prepared for the shocks: staggering inflation, naira devaluation, and forex surge?

There is no gain in saying that the major pressing challenge for every business owner in Nigeria today is how to navigate the relentless rise in material costs. To put things into perspective, when we started this journey two years ago, the price of cement was around N2,000; today, it has skyrocketed to about N9,000. Steel prices have surged from N480,000 but today priced at to N1.3 million. Additionally, the costs associated with clearing containers—a significant hurdle for entrepreneurs engaged in import and export—have skyrocketed, with the clearance of a 40-foot container now exceeding N22 million, up from N4 million. No one prepared us for the staggering devaluation of the naira to the dollar, which has skyrocketed from N360 to N1,750. Given that 85 per cent of our project costs are dollar-denominated, this forex surge has severely strained resources and diminished investor appetite, contributing to project delays. Each week brings with it fresh challenges, yet our unwavering dedication to bringing the iconic LeonardoBySujimoto project to life serves as a lesson for us as passionate and uncommon entrepreneurs, determined to overcome all obstacles while ensuring a successful completion of the project. 

 When you started a decade ago, what fired you up to embark on such huge audacious projects, did you have the money?

When we founded Sujimoto a decade ago, I began this journey with nothing but a visionary mindset and a drum of audacity, I didn’t even have the money to buy the first land from My mentor and Father Alhaji Saro -may his Soul Rest in Peace. Without the support of wealthy relatives or influential neighbours, I carved my path with hard work and uncompromising honesty. I firmly believed that by marrying integrity with excellence, we could build a local brand with a global reputation that Nigerians would embrace and appreciate—and today I am grateful to the Almighty that we have succeeded in doing that.

While the vision for the 36-storey LeonardoBySujimoto Project is grand, it is not without challenges. Navigating the complexities of today’s economic landscape has presented us with numerous obstacles. Yet, our journey—from the successful Medici Residences in Ikoyi in 2014, and now the soon-to-be-completed LucreziaBySujimoto, a 15-storey building in Banana Island, set to launch by the end of Q4 2024—These 10 years of consistency demonstrates our resilience and commitment to excellence. In every instance, we have faced skepticism and doubt, with many questioning our ability to deliver.  Yet, we have consistently upheld our commitment to integrity and excellence, ensuring that our clients remain informed and supported throughout every process. The temerity to always say the truth and uphold integrity at all costs and make sure we remain very transparent where we had shortcomings, we made it an obligation to prioritise the well-being of our investors, not only exceeded expectations but also significantly enhanced their return on investment. 

With the rather harsh economic conditions, any plans to close shop?

Despite the challenging economic conditions in Nigeria, which have made several businesses close their doors of operation, we remain resolute and determined to commence construction on the ambitious LeonardoBySujimoto project before the end of November 2024. Today, the land in question is valued at approximately N17 billion, with the entire project worth over N180 billion — no sum of money is enough for us to destroy a project of that magnitude or the value we have built over the years. We remain unwavering in our determination to complete this ambitious project in less than 36 months, positioning it as one of the fastest and most robust civil engineering feats in Nigerian history, the tallest and most luxurious building in Sub-Saharan Africa, and the best investment anyone can make. As we draw closer to the groundbreaking of this landmark project, I want to extend my deepest gratitude to our investors and supporters. Their patience, understanding, and resolute trust in us have been instrumental in our journey.  I also extend my profound appreciation to the dedicated professionals at FCID who treated me with utmost respect, and professionalism, which have clarified our path forward. To all the uncommon entrepreneurs facing challenges, may the Almighty continue to grant you strength and perseverance to weather every storm. For the naysayers and the cynics who doubted our vision, I personally assure them that in less than three years, they shall all bear witness to the unveiling of the tallest and most luxurious building in Nigeria and across Sub-Saharan Africa.