TMCnet News
NIGERIA - Return of the banking czars [African Banker](African Banker Via Acquire Media NewsEdge) In 2010, the erstwhile governor of Nigeria's central bank, Lamido Sanusi, now Emir of Kano, introduced a new policy on the tenure of bank chiefs in the country. The policy made it mandatory for chief executives of banks who have spent two terms of five years each in office, to step down. The retroactive 10-year-limit policy, intended to improve corporate governance in the financial services sector, was part of Sanusi's controversial banking reforms, which shook the nation's financial industry in 2009. He had sacked eight bank chief executives in the country over their alleged financial peccadilloes that year. Jim Ovia of Zenith Bank Plc; Tony Elumelu of the United Bank for Africa (UBA) Plc; and Akinsola Akinfemiwa of Skye Bank Plc were affected by the tenure policy. All three had spent more than 10 years in the saddle. They eventually bowed out on 31st July 2010 and ventured into different businesses outside of banking. But now they are back in the saddle courtesy of a proviso in the central bank's rule on tenure limits for bank CEOs. According to the stipulation, a former bank chief can only hold board positions in any bank or its subsidiaries, three years after their exit expires. Apparently taking advantage of this rule, in July this year, the board of directors of Zenith Bank appointed Ovia as chairman of the bank. A statement by Zenith's group managing director/chief executive, Peter Amangbo, said Ovia took over from Steve Omojafor, who resigned in June. In August, UBA's board also endorsed Elumelu's return to the bank as chairman. He succeeds Ambassador Joe Keshi, who had occupied the position. Skye Bank's Akinsola Akinfemiwa had returned to banking last year, albeit in a different capacity and in a different bank. He is now chairman of Heritage Bank Plc. The central bank has approved these appointments in line with its rule on the tenure limit for bank CEOs. Some analysts see the return of these veterans as a positive development for the Nigerian banking industry. Following their forced retirement from banking by Sanusi, the three bank chiefs had ventured into different areas of business. Ovia's second coming For instance, Zenith Bank's Ovia, who founded Visafone Communications Limited, a mobile telephone company, had gone into the hospitality business, bringing Marriott, the international hotel group, to Lagos. He is currently constructing a 150-room five-star Marriott Hotel, slated for completion this year. During the agreement signing ceremony in 2012, Ovia said: "We identified a gap in the marketplace within the hospitality industry, to support the burgeoning sectors. Nigeria is well known for its hospitality, and Lagos as a megacity deserves world-class facilities to complement its status." The former Zenith Bank boss has also spread his tentacles to the oil and gas industry. He is the founder of Quantum Petrochemical Company Limited, which is currently constructing a $1.5bn methanol plant located in Ibeno, Akwa Ibom State, in collaboration with US-based HIS and Italian Saipem. At the groundbreaking ceremony of the project in August this year, President Goodluck Jonathan said the multibillion-dollar plant will put Nigeria on the global map for petrochemicals processing. Jonathan said: "The federal government of Nigeria lends its support wholeheartedly to ensuring the success of this project. I would like to encourage Mr Jim Ovia and his board not to relent in their efforts to support the growth of entrepreneurship in the Nigerian economy." The governor of Akwa Ibom, Godswill Akpabio, in his remarks at the occasion, also commended Ovia for the initiative, which he said would transform the economy of the state. Ovia said the petrochemical plant would boost manufacturing activities in the country when completed. The plant, he added, would produce fertiliser, tyres, and plastics, stimulate the growth of ancillary local industries and create job opportunities for Nigerians. He said: "The importance of developing capacity within the petrochemicals industry should not be underestimated: petrochemicals provide the foundation for manufacturing industries; for example, construction, packaging, pharmaceuticals, agriculture and textiles. "Nigeria has the capacity, both human and natural resources, to become a world leader in petrochemicals. I am very excited at the prospect of Quantum Petrochemical Processing Plant Limited becoming one of the first wholly private sectorled petrochemical complexes to be developed in Nigeria." Ovia is also a leading player in the Nigerian Information Technology (IT) industry. He is the chairman of the Nigerian Software Development Initiative (NSDI), and chairman, National Information Technology Advisory Council (NITAC). His second coming to Zenith, which is currently ranked Africa's sixth-largest bank, is expected to further strengthen the bank and enable it to play a more prominent role at both the regional and international levels. Elumelu returns to financial fray For Tony Elumelu, who is currently chairman/CEO of Heirs Holdings, the pan-African proprietary investment company, which he founded in 2010, his return to UBA could well offer another opportunity to put the financial institution on a higher pedestal. Heirs Holdings holds stakes in a number of leading African businesses, including Transnational Corporation of Nigeria Plc Transcorp) and UBA. (See Elumelu's exit interview with African Banker, 2nd Quarter 2010 issue). Transcorp, which manages the Hilton Hotel in Abuja, participated in the power sector privatisation exercise and won the bid for the acquisition of Ughelli Power Plc, through its subsidiary, Transcorp Ughelli Power Limited (TUPL), in 2012. Teragro Commodities Limited, another subsidiary of Transcorp, is into agribusiness and it is leveraging on advanced technology in food processing to produce agricultural products, including orange and pineapple concentrates, mango purees and orange peel oil for industrial markets. The 26,500 metric tonne capacity juice concentrate plant is located in Benue State. Elumelu has also been active in promoting economic advocacy and he has used several local and international fora to drive his concept of 'Africapitalism', the philosophy that the African private sector is the critical enabler of the continent's economic and social transformation. In 2010, he established the Tony Elumelu Foundation, an Africa-based and African-funded philanthropy that seeks to promote entrepreneurship on the continent. Commenting on Elumelu's return to banking, the current group managing director/ CEO of UBA, Phillips Oduoza, said: "His return to the board brings a depth of knowledge and experience in the African financial services industry that is second to none. We are privileged to have him lead the board at this critical stage in our development." Elumelu, who expressed delight at returning to the bank, said he looks forward to bringing his experience and energy to guide UBA's long-term growth trajectory. He said: "Financial services remain one of the key drivers of African growth, both in terms of social inclusion and regional integration, and the UBA Group provides a unique platform to deliver both extraordinary value and drive Africa's economic success." Similarly, Akinsola Akinfemiwa, who was appointed chairman of Heritage Bank, a regional bank, in 2013, is an experienced banker, under whose leadership Skye Bank blossomed. He is expected to replicate this success story in Heritage Bank. Akinfemiwa is also vice chairman of the Transmission Company of Nigeria (TCN), a federal government-owned agency that is working to address the epileptic power supply situation in the country. Unconfirmed reports say he is nursing governorship ambition in Ondo, his home state, in 2015. Watchers of the economy say the return of the trio to banking is a vote of confidence in their ability to navigate their respective financial institutions through the dynamics of the challenging operating environment. Analysts also believe they have what it takes to succeed in this task, given their pedigree. It is therefore expected that their return to banking will bring a breath of fresh air to the industry, which needs innovation to move to the next level. ¦ (c) 2014 IC Publications Provided by SyndiGate Media Inc. (Syndigate.info). |