LEAVING

THE

TARMAC

BUYING A BANK IN AFRICA

Aigboje Aig-Imoukhuede

Published by

RedDoor

www.reddoorpress.co.uk

© 2021 Aigboje Aig-Imoukhuede

The right of Aigboje Aig-Imoukhuede to be identified as author of this Work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, copied in any form or by any means, electronic, mechanical, photocopying, recording or otherwise transmitted without written permission from the author

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CONTENTS

My deep and sincere appreciation to my wife Ofovwe, my children Ohiozoje, Aima, Morenike, Renuan, my business partner Herbert and all my colleagues at Access Bank.

To God be the glory!

FOREWORD

When the author Aigboje Aig-Imoukhuede approached me to write the foreword to this book, I asked him if the content is one hundred per cent accurate; he responded in the affirmative. I went on to tell him that if so, he must have stepped on some toes, because every true story reveals the good, the bad and the ugly sides of life; it reveals our strengths and successes, weaknesses and failures as well as those of other parties we may encounter along the way.

Leaving the Tarmac is a frank account of Access Bank’s rapid rise from a position of insignificance in 2002 to one of national importance and regional leadership ten years later. It is not a coincidence that these successes were achieved during the author’s watch as MD/CEO, supported by his able deputy Herbert Wigwe.

As President of Nigeria, I continuously sought the views and inputs of entrepreneurs and professionals within the private sector to ensure that our reform programme remained on the right track. Aig was an active participant during these interactions, he also stood out as a private sector leader who clearly understood my vision for Nigeria’s economic development.

The book reveals how he strategically positioned his bank to benefit from our National Economic Empowerment and Development Strategy agenda.

Through NEEDS, I was determined to engineer the emergence of at least seven mega-banks who could compare favourably with the leading banks in South and North Africa in terms of relevance, capital, size and reach. Only then would the Nigerian banking sector be able to catalyse the growth of the real sector and finance large infrastructure projects. In 2004, we raised the minimum of capital of banks from N2 billion to N25 billion, compelling them to consolidate. The consolidation strategy was a spectacular success and the industry grew exponentially during my second term (2003-2007). Our capitalisation policy also unleashed fierce competition and entrepreneurial activity within the banking sector, with Nigerian banks attracting huge investments and global recognition. Of course in any reform programme there are winners and losers. This book explains why Access Bank emerged as a winner and remains so today.

My general opinion of banks and bankers has not always been positive, particularly when they display short termism and a narrow focus devoid of national interest. Access Bank, whilst not perfect, has been refreshingly different from the normal run, its commitment to sustainable business practices has seen the bank take the lead on issues of economic development, health, women empowerment, corporate governance and so on. For this reason, whenever they seek my support in their quest to become the world’s most respected African bank it is forthcoming. It is my fervent hope and prayer that the bank maintains its enviable track record long after Aig’s retirement as CEO.

CHIEF OLUSEGUN OBASANJO, GCFR

INTRODUCTION

At the time of writing this I am stepping aside as chief executive of Access Bank. So much has happened in the last twelve years in Nigeria, in banking, in Access Bank itself and in my own life that I felt this would be a good time to write the story of Access Bank’s growth from the moment that my colleagues and I bought it in 2002 to the present day.

I hope that the story I am about to tell will be an inspiration to other young entrepreneurs who are setting out with big dreams, great visions and high hopes. It is a story that shows how you can build a world-class business in a relatively short time if you lay the right foundations, have good core values and do the right things. It is also a snapshot of a decade in which an enormous amount has changed in the world of international finance, politics and power, particularly within Africa.

I am always being asked how I have achieved what I have at such a relatively young age, and I have often been encouraged to write an autobiography. I think it is too early to write a book about my own life, but I want to answer many of the questions, such as ‘how’ and ‘why’ the success of Access Bank came about. In these pages I will give a very personal view of the business philosophies that I, and those close to me, have believed in so fervently from the beginning and that we feel have been vindicated by the success of the company.

At the beginning of my career I was inspired by reading books about the success of great American and European bankers such as the Rothschilds and J.P. Morgan, and about companies like Sony, Apple and Hewlett Packard, books that were always readily available in airport bookstores. There has been very little, however, written about African companies or indeed Nigerian businesses, despite the fact that some of these organisations possess the most interesting business stories of our times, and despite the fact that Nigeria has the potential to be one of the most successful economies in the world if the right business philosophies can be introduced and adopted by the big companies as well as by the politicians and others in positions of power.

Historically the private sector in Nigerian business has not been strong on issues of emotional intelligence. A business community where the hard IQ issues of growth, expansion and profitability dominate so totally is bound to face difficulties in a modern world where a greater degree of sophisticated thinking is needed in order to tackle corporate issues such as risk and sustainability. In my view the world’s developed economies started out by putting an emphasis on leveraging the factors of production to the highest degree of efficiency with little consideration for environmental, social and other such issues. As their businesses matured they learned to act in a fashion that would ensure their long-term sustainability, particularly as regards their role and relevance to their host communities.

The time has now come for Nigeria to mature in the same way, and it can do so quickly by learning from the many successful examples you find across the world. Already we have seen in Nigeria that the companies that developed strong core values, and have worked hard to maintain them, exhibit sturdy foundations upon which to grow, trade and begin to earn the respect of the world. Any budding entrepreneur wanting to emulate their success needs to study and understand how these foundations were laid.

I believe that the story of Access Bank proves what is possible with strong corporate foundations, and I believe we must speak confidently about our story of transformation if we are to inspire others to achieve the same.

Update May 2020

This book was ready for publication in 2015 but I chose to delay its launch for reasons I will disclose if and when I choose to write a book about my own life. Readers must note and appreciate that its content remains as written in 2015, with no alterations.

If there is anything I have learned since completing Leaving the Tarmac, it is that the one constant in my life has been the Almighty, the unchangeable power behind my continuing story.

AIGBOJE AIG-IMOUKHUEDE, MAY 2020

CHAPTER ONE

Entrepreneurial Juice

When I told my mother I was going to buy a bank she couldn’t understand what I was talking about. Only eighteen months before, she pointed out, quite rightly, we had attended a big party hosted by Chief Gbolahan Osibodu to celebrate my appointment as one of three executive directors at the Guaranty Trust Bank, a respected bank in the country, as renowned for its ethical values and good governance as it was for its enormous success. It had taken me just fourteen years from attaining my law degree at the University of Benin to becoming an executive director.

‘Why would you want to give up such a good job when you have worked so hard to get it?’ she wanted to know. ‘You are the youngest executive director in the country, why can’t you be happy with that? And how are you going to buy a bank anyway?’

I am sure most mothers would prefer their sons to have secure careers with blue chip companies rather than risk everything by setting up businesses of their own. It is so much easier to explain to friends, family and acquaintances what your son does if the listener already knows and respects the name of his employer, so much more reassuring to know that your grandchildren have the protection of a steady salary coming in while they are young and vulnerable. There was also the question of the negative publicity that so many owners of banks had received over time.

There was a general perception amongst the Nigerian public that a large proportion of the many banks then operating in the market were backed by wealthy individuals, known generally as ‘Ogas’ or ‘Godfathers’. In Europe or America the term ‘godfather’ would suggest senior figures in a criminal organisation, but in Nigeria it is closer to the original religious role of someone who provides support and protection to another of lesser standing. In Nigeria the ‘Godfather’ is like the traditional feudal barons of Europe, men of wealth and influence who extend their patronage to protect and assist others.

Many of these godfathers would have amassed both their fortunes and their networks of contacts while serving in senior positions in the army and the government, or as contractors to the government. Having grown wealthy through their influence they would then use their banks to consolidate their positions within society. There was generally believed to be a godfather behind every bank and there was also a perception that without such a person it was not possible to even start, let alone build such a business. Inevitably, as political and military reputations waxed and waned, the fortunes of their various banks would follow suit.

The assumption, therefore, was that such banks had not been founded for the good of their customers, but rather for the benefit of the godfathers and their friends and families, and that they were therefore not truly professionally run. In many cases these assumptions were well founded, although not in every case. ‘The issuance of banking licences was abused,’ Seth Apati writes in his highly recommended book, The Nigerian Banking Sector Reforms,¹ ‘and became a smart way of gaining access to foreign exchange at the official rate, which was then sold off at parallel market rates.’

Why, my mother was wondering, would I be even considering buying a bank when I had no such person to back me?

‘You are a good professional,’ she said, ‘you have proved that, but if you have a godfather you certainly have never told me about him. So how are you going to do it? How are you going to play the necessary political games to acquire a licence? Who will do the introductions for you? How are you going to survive in such a heavily regulated industry? Banks are not owned by professionals like you.’

I believe that God endows each of us with different skills and talents and you have to pray that you recognise these and are able to improve on them and work on them to the best of your ability. One thing that people who know me well tell me is that I have an ability to see a long way into the future, that I can spot things that other people miss. I can analyse a set of scenarios and project what the likely end result will be. It allows me to make decisions that sometimes appear very courageous to other people, but seem less courageous to me since I am pretty confident that I can predict the outcome.

My mother was by no means unusual in her misgivings. I would imagine that at that stage about ninety-nine per cent of the population would not have been able to understand the concept of banks being owned by professional managers. But in fact she was wrong, because a number of other professionals were already changing the way banks were owned and operated and in so doing causing a revolution within the banking industry’s competitive dynamics.

Things had changed even in the fourteen years that I had been working in the industry. When I commenced my banking career in 1988 there were two main banking models that characterised the sector; Merchant Banking and Commercial Banking, the first also called wholesale banking involved providing corporate loans, debt/capital advisory services and other financial solutions to large corporate customers, the second commonly referred to as retail banking involved cheque/cash handling services, and other financial solutions to individuals and corporate customers. The leading Merchant Banks maintained technical partnerships with well-respected American Investment Banks and I recall that four Merchant Banks stood out namely Continental Merchant Bank, (Chase Manhattan Bank), International Merchant Bank (First Chicago), ICON Merchant Bank (Morgan Guaranty) and NAL Merchant Bank (American Express Bank). The involvement of foreign technical partners influenced the strategies and cultures of these four banks to the extent that Merchant Banking in Nigeria took on the persona of America’s Wall Street. Embracing the ‘yuppie’ culture, the Merchant Banks recruited the best and brightest Nigerian graduates from local and foreign universities and exposed them to the best training. It is not surprising that many of the men and women who would go on to redefine Nigerian Banking earned their stripes in these four institutions. The Commercial Banks were dominated by the ‘Big Four’, namely First Bank (originally Standard Bank), Union Bank (originally Barclays Bank), United Bank for Africa (UBA), a joint venture led by the French bank BNP and Afribank, formerly the International Bank for West Africa (BIAO). All of them had been indigenised as public companies quoted on the Nigerian Stock Exchange; their ownership comprised the Nigerian Government as well as the general public. Employees of the big four started at the bottom rungs of the career ladder rising through the ranks as clerical officers into positions of management in a somewhat pseudo colonial working environment. Unlike their merchant banking counterparts, the older generation of commercial bankers had obtained their professional qualifications from the Chartered Institute of Bankers and only later in their careers did they obtain university degrees. It is not difficult to appreciate that while they existed side by side within the same banking industry these two models were in fact worlds apart.

Around 1988, when I