Aigboje Aig-Imoukhuede, co-founder of Access Bank Plc, has disclosed a rare insight into how himself and partner, Herbert Wigwe bought and transformed Access Bank Plc through the capital market.
The billionaire banker revealed this during the just concluded African Stock Exchanges Association (ASEA) conference held in Lagos.
Speaking in a chat with Oscar Onyema, the session moderator and CEO, Nigerian Stock Exchange, Aig-Imhokuede said prior to the takeover of the old Access Bank, the financial institution was a very small bank and had been listed on the NSE.
“It was a small bank listed on the Nigerian Stock Exchange but wasn’t being run well. They tried to raise capital, and the markets were not responding very positively to its attempt to raise capital,” the former bank CEO said.
He then narrates how they make the move to actualize the takeover of the bank from the old owners.
“That was the opportunity for myself and Herbert Wigwe, whom I had convinced crazily that we should leave Guaranty Trust Bank and buy Access Bank. It took $10 million to buy 51 per cent of Access Bank. Between Herbert and I, we had $2 million. We understood the markets, and we were able to fund a group that basically raised $10 million, and then we bought Access Bank.
“Without Access Bank being listed, this story would never have happened. It would have been much difficult,” he added.
Speaking further, Aig-Imoukhuede noted that after the acquisition, he set the audacious goal of making Access Bank being among the top ten banks in Nigeria.
“In 2002, we bought into Access Bank, and the first thing I learned was that the dollar balance sheet of Access Bank was a bit smaller than Aliko Dangote’s credit card limit. I thought to myself, after GTBank, what had I gotten myself into.”
He continued, “In the market then, Access Bank was 80 out of 90 banks. We came to the stock exchange and said that in five years’ time, Access Bank would be among the top 10 banks. The market didn’t laugh. The investors didn’t laugh. They looked at these highly driven young men and women and said, let’s give them a chance. Five years later, we were number 8.”
After meeting the top 10 target set, Aig-Imokhuede’s team set an even bigger goal of becoming one of the top 5 banks in Nigeria.
“We then said in five years’ time, we would be in the top five. Moving from 80 to 8, was a bit easier than from 8 to top 5, because the institutions around were very formidable. That in itself, also concretised the need for us to grow regional,” he confessed while claiming that Access Bank is currently in the third or fourth position in Nigeria, depending on what metric used.
Aig-Imoukhuede also hinted that there’s a major deal in the works and gave advice to entrepreneurs interested in rolling out across Africa.
The successful banker who in his post–Access Bank career founded Coronation Capital, stated that basic needs were yet to be met in Africa.
“If you look at the African opportunity, it’s about meeting basic needs, because basic needs are largely unprovided for, and provide solutions to those basic needs at scale. Think about Aliko and cement,” he said.
In his view, African financial providers had played a lot on the short end of financial solutions. Money transfer, credit cards, but the need around safety, security and wealth creation is completely unmet today, apart from in South Africa.
“Yes, we are beginning to open pensions; yes, we are beginning to grow an asset management field, but honestly speaking, we are on the ground floor. When I left Access Bank, I said I’m going to keep my investments in short money, but focus my mind on the long money game.”
He then gave a brief into why he founded the Coronation Capital after he left Access Bank.
“So Coronation Capital is essentially a private equity platform that has grown into a much larger diversified investment management platform. We want to, as we did with Access Bank, establish very firmly in Nigeria and then grow regional.”
The former President of Nigerian Stock Exchange hinted there is a deal in the works involving Coronation and the Nigerian Stock Exchange.
“I’m giving you a sneak preview into a major announcement you are going to hear in January, but I think a lot of money is going to be made in that space. The stock exchange for the Coronation Investment platform is a tool that we are going to be providing to the market. So there’s a lot going to happen,” he added.
Aig-Imokhuede said the move would have taken place prior to this time, but for his serving as the President of the NSE.
His words; “My being President of the Exchange held me down, because I couldn’t do things that would put me in conflict in my role. So as I disengage, I would be able to unleash my creativity in the capital markets for wealth creation.”
“Whether the country is small or the country is big, the country will have a President, the country will have a Central Bank Governor, and other regulators, who must be given their sovereign respect.”
“You need a lot of energy and you need a lot of relational skills when you say you want to roll out. When you receive a phone call that this President wants to see you now, you need to get on a plane and make sure you see him. When you need an approval, or a policy context that can make or mar your dream, you need to interact.”
Aig-Imoukhuede also gave a glimpse into his interest in philanthropic efforts.
“The one thing I have found across African countries is that it was too often the exception, that the public service in Africa, was an enabler of dreams. In Africa, too often policymakers and policy implementers were disablers of dreams. And I said, why? Why should I almost have to die to make my business work? Why should I as a barber in Obalende, in addition to learning how to cut hair, why do I have to learn how to be a power generator to run a shop?”
“I then did a study, and I found that over several years from the mid-70s, Africa suffered a massive under-investment in capacity development of the public sector, while there was a shift of massive investments to the private sector.”
“We cannot afford to live in Africa, with this under-investment in capacity in the public sector; we will all suffer for it. So, AIG (Africa Institute of Governance) is all about building capacity in the public sector. So, the first thing we did was scholarships to Oxford University Blavantik School of Government, to study for a Masters in Public Policy (MPP), on the condition that you must come back and work for your home country. Next, was a fellowship programs for public servants who have excelled.”
Aig-Imoukhuede also disclosed that the organisation was working on a world-class finishing school that will be as good as JFK and BSG in Africa and for Africans.
In addition, AIG was working with the civil service in Nigeria around reform.
He listed two ways African Stock Exchanges can provide value.
“The first thing is this: clearly an exchange in Africa will have to walk the same path as exchanges across the world to make themselves fit for purpose. If you are mutual, you have to demutualise.”
According to him, this would enable the exchanges to be more entrepreneurial in thinking while adopting technology would also help exchanges be more useful.
“In addition, technology can also play a big role. I think that with the very many options around, from blockchain to distributed ledger technology, to simply digital systems for distributing retail products, the ability to leapfrog and serve retail markets is enormous.”
Crude oil prices approach $70 after US attack on Iranian general
Crude oil prices spiked by 4% on Friday upon news that a top Iranian general was killed in an airstrike by the United States military.
Brent crude futures, the international benchmark for crude oil, stood at $69.01 per barrel, an increase of 4.17%.
US West Texas Intermediate (WTI) also stood at $63.34 per barrel, a 4% increase.
The Pentagon said the attack was carried out on the order of President Donald Trump to deter “future Iranian attack plans”.
It added that Soleimani was killed because he “was actively developing plans to attack American diplomats and service members in Iraq and throughout the region”.
The airstrike comes days after an Iran-backed militia and its supporters breached the US embassy in Baghdad.
Iraqi Popular Mobilisation Forces (PMF) confirmed that Abu Mahdi al-Muhandis, deputy head of the force, was also among those “martyred by an American strike”.
In September, oil prices increased by 14% after coordinated attacks were carried out on Saudi Arabia’s oil facilities which cut off 5% of global oil supplies.
Working in Nigeria’s good
Although world leaders are holding their breath awaiting Iran’s next action, the situation is working in favour of oil producing nations like Nigeria.
Already, Brent crude price is $9 above Nigeria’s crude oil budget benchmark.
A reprisal attack by Iran could send oil prices as high as $100 as global crude supply could be threatened.
Sylva: FG making plans for fuel at N97 per litre
Timipre Sylva, minister of state for petroleum resources, says the federal government is working to make fuel available at N97 per litre, using the compressed natural gas (CNG) as an option to premium motor spirit (PMS).
CNG is a fuel that can be used in place of gasoline, diesel fuel and liquefied petroleum gas (LPG). It is used in traditional gasoline/internal combustion engine automobiles or specifically manufactured vehicles.
Fielding questions from reporters at his office in Abuja on Thursday, the minister said the common man would not notice that subsidy on PMS has been removed when they have CNG as an option.
“If we are thinking of reducing pump price for fuel? I could easily say yes and I’m sure all of you wonder why I am saying that,” he said.
“We are thinking of giving the masses an alternative. Today we are all hooked on PMS, what we want to do going forward is to see that we are able to move the masses to CNG gas.
“CNG unit for unit costs less than even the subsidised PMS. Per litre the subsidised rate of PMS is N145/l. CNG will cost N95 to N97/l that is why I could say we want to reduce the cost of fuel, that way when we are given an alternative Nigerians will not notice when the subsidy on PMS is removed.”
The minister said he is hoping that the petroleum industry bill (PIB) will be passed by the national assembly before May.
According to him, the PIB “has taken us back for too long.”
“We are very ambitious about the PIB and we are hoping that it will pass before May this year which is the first anniversary of this administration and second tenure of this government,” he said.
“We are counting on the excellent relationship between the executive and the legislature but I must say that it is a hope and that is why I am mobilising the support of all of you. We are also mobilising the support of the national assembly and everybody else in the industry.
“Let us build a consensus around the PIB because the PIB has taken us back for too long, it has held us down for too long and we need to get it passed quickly. It is taking us a while to tidy up because we want to take every interest on board.”
Inflation hits 11.98% — highest in 19 months
The consumer price index, which measures inflation, stood at 11.98% in December 2019.
This is 0.13 percentage points higher than the 11.85% recorded in November.
This is the highest point the index has reached in 19 months.
“On month-on-month basis, the headline index increased by 0.85 percent in December 2019, this is 0.17
percentage points lower than the rate recorded in November 2019 (1.02%),” the report, which was released by the National Bureau of Statistics on Friday, read.
“The urban inflation rate increased by 12.62 percent (year-on-year) in December 2019 from 12.47 percent
recorded in November 2019.
“The rural inflation rate increased by 11.41 percent in December 2019
from 11.30 percent in November 2019.
“The composite food index rose by 14.67% in December 2019 compared to 14.48% in November 2019.
“Core inflation, which excludes the prices of volatile agricultural
produce stood at 9.33% in December 2019, up by 0.34% when compared with 8.99%
recorded in November 2019.”
According to the report, the rise in the food index was caused by increases in prices of bread, cereals, meat, fish, O
Oils and fats, potatoes, yam and other tubers.
On a year-on-year basis, food inflation was highest in Sokoto (17.75%), Ogun (17.37%) and Plateau (16.75%), while Bayelsa (13.26%), Delta(12.72%) and Bauchi (12.19%) recorded the slowest rise.
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