Co-founder of Access Bank, Herbert Wigwe, in an interview with Peace Hyde on My Worst Day, touches on a wide variety of issues including his experience as an entrepreneur, his worst day in business and advice for young people. You can read Aigboje Aig Imoukhuede’s version of the story here. Here are the excerpts:
What was it like starting out as an entrepreneur?
Interesting, I had the experience a couple of times. I had the opportunity of working in a bank, that didn’t go well very early in my career, having trained as a chartered accountant. I also had the opportunity of working yet again, in another entrepreneurial endeavour, where we started a bank from a plain balance sheet, and grew it into one of Nigeria’s corporate success stories.
So, coming into Access bank was nothing new. The only difference was we were at the forefront of everything. We were at the firing line of all the pressure and the pains that come with entrepreneurship. We put our own capital at risk, so it was a totally different experience.
What was your experience like in Access Bank compared to GTBank (which was then a relatively young bank)?
It’s different when you are doing it under someone else’s umbrella. That’s intrapreneurship. When you are truly on the firing line, everything is up for grabs, you can lose everything in one second.
What gave you and Aig the confidence?
Our confidence was built on the fact that we had done it before. Where I first started as a banker, was an entrepreneurial environment. Getting into the bank which we worked in before we worked in Access (which was GTBank) was also a successful entrepreneurial endeavour. So coming into Access, in my mind, was no big deal.
What was the chemistry between you and Aig like?
My partner and brother shared so much in common with me. His aspiration was the exact mirror of what I really wanted to do for myself. When the idea came up, it didn’t take one second for us to say, “Let’s do it.”
How was your team like back then?
It is never one person’s effort. It’s the effort of a group of people. It’s the effort of a strong team. It’s also God’s blessings because you will meet several landmines along the route. Landmines that you don’t even know how to navigate.
Yes, we both came in, but there was also a strong team that we brought in. They may not have been the faces, but these guys were also entrepreneurs. They challenged our thought processes day in, day out. What they didn’t know was that each time that happened, it got us stronger and made us more confident to do what we were doing.
What were people’s reactions when you and Aig took over Access Bank?
There were people who thought, “How are these guys going to pull it together?” There were those who thought, “Young people don’t work together very well, they are likely to quarrel.” Several people thought like that. Some also people said, “It’s just a matter of time, something will happen.”
In fact, there were some consulting firms that said they were not going to take on our mandate because these guys are just a bit too young for what they want to do. So that was the kind of vibe that we got.
How did you guys felt back then?
Within us, we didn’t feel we were too young because we knew there were people who had done it at that age, perhaps with much smaller businesses or with much smaller banks. We felt we were so much better trained than most people who had done it before. We were infinitely confident in our capacity to what we were doing. So age was a number, but if you look at our track record up until that time, we were not 35.
The journey from small to big
It’s been great. There have also been very trying times. There have been days when we’ve had to roll on the floor and pray, and just beg God that certain things shouldn’t happen, when there’s been big changes in the macro. More days of celebration with each passing thing. Each success makes us so much more confident. So it’s been mixed feelings. On the whole, so much thanksgiving to God and pride.
When will you say was the worst day in business for you
There was some information about an exposure which we had so far. The communication was that it was not a performing loan, and it was not true. Because of the size of the loan, it could have triggered an issue. We were a much smaller institution. And our reputation, particularly in banking, could affect the overall franchise. It could affect our stakeholders, our customers, most importantly our people, because they were going to be concerned about our professional future.
(He later discussed how he fell seriously ill while in Ghana for the opening of the bank’s branch, due to the pressure. In order to resolve the situation, himself and Aig had to embark on a fire sale of assets.)
Did these incidents incite fear of failure in you?
I am absolutely petrified of failure, and would do everything possible not to find myself in certain circumstances. People ask us why we spend so much time working. Apart from the fact that we truly enjoy what we are doing…, so I don’t know anything about work life balance. I enjoy every second of what I do… but the thought of failure is something I don’t want to dream of. So we are perpetually seeking ways to better prepare ourselves for those difficult moments in life.
We like to share it with our people: the only way to continue to sustain a business over time is for you to always be in day one mode, assuming that something can go wrong. And how do I continue to make sure I lift this enterprise to the very next level, so that whatever shocks come up, one year after, is the day one mode, reinventing and coming up with new innovations to take me ahead.
What is your advice to young people?
A couple of things are very important. You must be extremely confident in what you are doing. You must know what you are doing. You must stick to areas of your competence. Don’t do things because others are doing it. Fear and belief in God are very important because there are little things in those moments of despair that would give you comfort. Fear of God and respect of God and religion is critical.
Want to be like Warren Buffet, Michael Phelps? Here are their secrets
The distinctiveness among Buffet, Dangote, Ovia, Phelps, Bolt, Musk, is not what they do, but how they do it and how often they do it.
Michael Phelps won 22 Olympic medals (18 gold), how did he do it? Well, he trained and trained and trained, then he ate and ate and ate every day. He was also blessed with natural attributes i.e., he was tall.
So, wait, if I am tall and eat, and train, I can also win 18 gold medals? No! but stay with me.
Warren Buffet likes to invest. He reads research reports, likes numbers and is always looking a discount deal on great stocks. Ok. So, if I am good with numbers, research buy great stocks I will become as rich as Warren Buffet? Well, maybe not as rich but you will earn more from your investments. The distinctiveness among Phelps, Bolt, Buffet, Musk, Dangote, and Ovia, is not what they do, but how they do it and how often they do it.
Let’s look at an Olympic swimmer like Michael Phelps. When Michael was eight, he wrote out his goals; he wrote, “I would like to make the Olympics,” then listed his time goals for the various races i.e. breaststroke, freestyle etc. At the age of eight, this future Olympian had visualized his goals, written them down, and put a date for accomplishing them.
When seeking to create a financial plan, it is impossible to achieve success without visualizing out a goal on paper. Imagine creating an investment plan without any idea of a retirement date or income or rates of return. It’s impossible without a clear road map to determine how much to save and invest for five years. During his teenage years, he trained “every single day, 365 days a year, Sundays, Christmas and Thanksgiving days included… and twice on his birthdays,” says his coach, Bob Bowman.
If an investor saved N1.00 every day for 5 years at 0%, that saver would have N1,826.00 What if those savings increased to N5.00 and were invested at just 5% annually? Then the savings pot will become N10,373.04. Yes, inflation will erode the value after 5 years, but applying a 13% inflation rate, the saver still has a real saving of N5,170.14.
So, the second lesson we take from Olympic champions is to start early, save, and then invest constantly. Micheal Phelps is a swimmer, a sport for endurance and speed. What do endurance athletes like swimmers and marathon runners eat? Food rich in carbohydrates; they need the carbs to fuel the massive amount of energy they expend during their sports. Phelps, for instance, for breakfast eats as many as 12,000 calories prior to his races. His breakfast consists of “three fried-egg sandwiches, three chocolate chip pancakes, a five-egg omelette, three sugar-coated slices of French toast, and a bowl of grits.”
What does a sprinter like Bolt eat? Not calories but lean protein, eggs, meat, fish, dairy. Protein allows muscles to recover and develop after sprinting, which causes minute damages to muscle fibres that can be easily converted to energy. So, two different Olympic champions, each multiple gold medal winners, but because of their different sports, they eat very differently to achieve a different objective.
Similarly, in investing, each investor is different, bond investors have instruments that have 30-year durations as opposed to stock traders who may be looking to buy and flip a stock in hours. What is key is to invest according to a stated objective and risk profile.
Where the investor has a longer endurance factor to risk, meaning the investor can accommodate volatility in his earning, that investor will be comfortable investing on equities. Equities are higher-risk investments and can lose all invested capital but can also gain 100%.
However, where the investor has a lower risk endurance, then the investor will fill his plate with lean risk asset classes like sovereign bonds which offer lower volatility to stock and deliver a fixed return, but suffer if interest rates rise.
Thus, our third lesson from the Olympians, the food each investor eats, is a function of his individual sport. Where the investors have lower risk, his asset allocation diet is different. Each investor must tailor his asset allocation to his objectives and investment goals.
Nigerian billionaires lose billions amid COVID-19 pandemic
Nigerian billionaires recorded more losses than gains amid COVID-19 due to the volatility of the stock market occasioned by the killer disease.
The year 2020 began with lots of predictions and promises, but the volatility in the stock market (which was occasioned by the Coronavirus pandemic) was not top on the list.
On February 27, Nigeria recorded the index case of the Coronavirus pandemic, an Italian who visited the country for business reasons. A month later, the federal government was preparing to announce a lockdown of the economy as part of measures to curb the seemingly unpredictable increase in the spread of the Coronavirus.
The lockdown which commenced 2 days after the announcement brought a lot of uncertainty into the financial markets, and this definitely comes with huge consequences for individual and corporate investors.
For many investors around the world, the first four months of the year was a bad one. There were fluctuations and sudden declines in stock prices. And for top Nigerian billionaires, it was definitely more of the losses than the gains. This article examines how they performed in the last two months, from February 29 after the index case was Q1 2020.
Alhaji Aliko Dangote
Being the richest man in Nigeria is no mean feat, yet Dangote has been able to maintain this title for years without breaking a sweat. However, the Coronavirus pandemic has taken a bite out of the billionaire’s billions.
By the end of February 2020, Dangote’s 14,500,315,501 direct shares in Dangote Cement Plc worth N2,465,053,635,170 at the share price of N170 per unit, while the 27,642,637 shares which he controls through Dangote Industries Limited were worth N4,699,248,290 at the same share price.
By implication, the total worth of his shareholding in Dangote Cement Plc as at February 29, 2020, was N 2,469,752,883,460—over N2.4 trillion.
The value slid downwards hitting N129.70 at the end of March, before rising slightly to N130 at April 30.
At this time, Dangote’s indirect shares were worth N3,593,542,810 while his direct shares were worth N1,885,041,015,130 summing up to N1,888,634,557,940 (over N1.8 trillion).
By comparing N 2,469,752,883,460, the value as at February 29, with N1,888,634,557,940 as at April 30, we can see that the billionaire’s assets in Dangote Cement Plc crashed by N 581,118,325,520 (N581 billion).
By any standards, this was no small loss.
Stock prices at Dangote sugar also suffered a similar fate. Starting at N14.00 per unit on January 1, the stock experienced fluctuations before closing the quarter at N10.00 per unit. Dangote’s 8,775,541,295 direct and indirect shares were valued to be worth N122,857,578,130.00 (N122.85 billion) at a share price of N14.00 on January 1.
Twelve weeks later, with the stock price down to N10.00 per unit, the worth of the same shares had dropped to N87,755,412,950.00 (N87.75 billion), a heartbreaking loss of N35,102,165,180.00 (N35.1 billion).
Stock prices at Dangote sugar, however, took a different trend for this period, starting at N12.1 on February 29 and appreciating almost 3% to 12.45 at the end of April.
The billionaire directly owns 653,095,014 shares and indirectly owns 8,122,446,281 shares through the Dangote Industries Limited. Dangote’s 8.77 billion shares were valued to be worth N106,184,049,669.5 (N106.84 billion) at a share price of N12.1 on February 29.
Twelve weeks later, with the stock price up to N12.45 per unit, the worth of the same shares had increased to N109,255,489,122.75. This gain of about N3 billion was recorded during the pandemic period, and on surface value, it can be attributed to the food products which the company produces. People eat even during a crisis.
Adding up the figures with that of Dangote cement, one can see that the little gain of N3 billion cannot be compared to the loss of N581 billion, as the mogul still lost over half a trillion.
We have not made any calculations for NASCON, as there is no way to confirm the stocks Aliko Dangote has with the company since he is not listed on the board.
However, NASCON shares closed at N13 on February 29, and slid down to N10.05 on April 30, dropping by 23%.
Entrepreneur billionaire and Chairman of United Bank for Africa Plc, Tony Elumelu also had some losses during the two months in review.
TOE, as he is called, directly owns a total of 190,100,234 units of shares in the bank, and 2,114,110,884 units of indirect shareholding in the company. This brings his total shareholding to 2,304,211,118 units of shares. By the close of trading on February 29, UBA’s shares were worth N6.7, meaning Elumelu’s total stocks in the bank was worth N15,438,214,490.6 (N15.43 billion).
There was not much movement in the share values for UBA plc as it started N6.7 on February 29 and ended April at N6.05. This means that by April 30, Elumelu shares (multiplied by the share price of N6.05 per unit) were worth N13,940,477,263.9 (N13.94 billion), showing a loss of N1,497,737,226.7 (N1.49 billion). This loss was a 9.7% depreciation of his share value, but N1.49 billion was no small loss for TOE.
The founder of Zenith Bank, Jim Ovia is one of Nigeria’s top billionaires. He directly owns 3,546,199,395 units and indirectly owns 1,513,137,010 units of shares. With over 5 billion units of direct and indirect shareholding in the bank, he is the biggest shareholder. Zenith Bank’s shares closed at N18.5 on February 29, danced a little way up and a little way down, before sliding continuously to close at N14.3 as at April 30.
As at February ending, Ovia’s total 5,059,336,405 units of shares were worth N93.59 billion (N93,597,723,492 at the share price of N18.5 per unit. By April 30, following the crash in prices, the worth of the same shares had dropped to N72,348,510,591.5 (N72.35 billion). Subtracting the latter value from the first, one can see that the worth of Jim Ovia’s stocks dropped by a whopping N21.2 billion (N21,249,212,901).
Among all the billionaires, Jim Ovia suffered the greatest percentage loss in the worth of his assets, 22.7%.
A heart-rending drop for him!
[READ FURTHER: Meet Elochukwu Umeh, founder of Africa’s digital powerhouse)
Access Bank’s Group CEO, Herbert Wigwe had a total shareholding of 1,441,522,910 units as at December 2019, before selling off a total of 55,611,001 indirect shares in four transactions, all in January 2020.
The depletion of his indirect holding through Trust and Capital Limited left him with 1,385,902,910 total shares made up of 1,184,680,195.5 units indirect holding and 201 million (201,231,713) direct shares.
Share prices of Access bank closed at N8,2 on February 29 and dropped to N6.6 on April 30. His 1.39 billion shares were worth N 11,364,477,653.80 on February 29, and crashed by 19% to become N 9,147,018,599.40 on April 30.
Wigwe is N2.22 billion poorer because of the COVID-19 induced stock crisis.
Alhaji Abdulsamad Rabiu
According to the Cement Company of Northern Nigeria Plc (CCNN) 2018 financials, Abdulsamad Rabiu had 12,752,801,231 units of shares. However, CCNN has since then been merged with the Obu Cement to give birth to BUA Cement. Since the merger, the new entity BUA cement has not released any financial statement so there was no way to confirm what Rabiu’s stakes are in the company presently.
However, BUA cement had its stock close at N37.15 at the end of February 29, 2020. This value dropped by 12.25% over the weeks to hit N32.6 by 30 April.
By implication, whatever the number of shares the billionaire had with the company, the value has dropped by over 12% in the COVID-19 dominated weeks.
Note that the stocks started the year at N18.10, meaning that the billionaire has lost even much more than we have captured.
Having dispensed of a few shares in 2019, co-founder of Seplat Austin Avuru ended the year with 58,970,463 indirect shares in the oil and gas company.
Avuru’s shares, when multiplied by the share price of N605 gives a naira value of N 35,677,130,115 as of February 29.
Taking it two months forward, a stock price of N494.4 as at April 30 shows that the value had depleted to N29,154,996,907.20
Avuru lost about N6.5 billion (N 6,522,133,207.80) to the stock price decline.
Mike Adenuga is the Chairman of Conoil Nigeria Plc, and directly owns 516,298,603 units of shares. He also has 103,259,720 units of indirect shares through Conpetro Limited, making for about 74.4% of Conoil’s issued share capital.
Conoil’s stock prices started at N18 per unit and only dropped a little to close at N17.4 on April 30.
Multiplying Adenuga’s 103,259,720 indirect shares by the stock price of N18 gives us a naira value of N1.86 billion (N 1,858,674,960) as at February ending, but the slight decline in stock value reduced the worth of these shares to N1.79 billion (N1,796,719,128).
Adenuga lost N61.9 million (N61,955,832) in his indirect shares to the COVID-19 crisis.
The 516,298,603 direct shares fell from N9.29 billion (N9,293,374,854) to N8.9 billion (N8,983,595,692.2) by end of April—a difference of N309 million.
From these figures, we can see that Adenuga’s had a loss of N371 million (N371,734,993) within the period under review.
Table of losses
Understanding the trend
A lot of factors affect the stability or otherwise of a company’s stock price and one of them is the volume of shares being traded.
A Council member, Nigerian Stock Exchange, Adebayo Ajayi, explained that the more shares owned by an individual investor, the fewer number of shares being traded and the more stable the price can be.
Investors often rush to sell when they sense uncertainty in the market. This results in a larger volume of shares being traded and directly impacts share values.
According to Ajayi, the stocks in Dangote group of companies, for instance, float more as the billionaire has gradually let in more investors over the years.
Note: The stock figures used in the analysis above was sourced from the Nigerian Stock Exchange (NSE) website, using the most recent figures from the companies’ financials.
Aliko Dangote donates mobile COVID-19 testing lab to Kano State
Recall that Aliko Dangote had already made other donations prior to this time, including his donation of N2 billion to CACOVID.
Africa’s richest man, Alhaji Aliko Dangote, has donated a 400 capacity mobile COVID-19 testing centre to the Kano State Government. This is expected to support the state’s ongoing efforts to combate the spread of the virus.
The Special Assistant to President Muhammadu Buhari on New Media, Bashir Ahmad, announced this in a tweet on Saturday evening.
FLASH: Alhaji Aliko Dangote donates 400 capacity COVID–19 Mobile Testing Centre to Kano State Government.
— Bashir Ahmad (@BashirAhmaad) May 2, 2020
Dangote’s donation is coming at a critical time, as the figure of confirmed COVID-19 cases in Kano state has risen dramatically in the last few days. The State Government recently admitted to being overwhelmed by the sudden rise of confirmed cases, a situation that has necessitated the conversion of certain facilities in the state to isolation wards.
According to a tweet from the State Governor, Umar Ganduje, the Sports Institute at Karfi, the Nigerian Air Force Hospital Kano, the Abubakar Imam Urology Hospital, Murtala Muhammed Library Complex, and the Hospitality and Tourism Institute, formerly Daula Hotel, will all serve as isolation facilities to house patients confirmed to be Coronavirus positive.
Sports Institute at Karfi and the Nigerian Air Force Hospital will now house carriers of the pandemic going forward. The Murtala Muhammad Library Complex is expected to accommodate over 200 beds and also an estimated 300 beds will be provided at Karfi Sports Institute.
— Dr. Ganduje OFR. (@GovUmarGanduje) May 2, 2020
He also stated during a press briefing on Saturday that medical equipment is expected to arrive Kano on Monday.
Recall that Aliko Dangote had already made other donations prior to this time, including his donation of N2 billion to the Private Sector Coalition Against COVID-19 (CACOVID) relief fund.
The Federal Government’s Flood Committee, which is led by Aliko Dangote, had also recently donated N1.5 billion to further aid the fight against COVID-19.