Jim Ovia is one of the icons of the Nigerian banking sector. He is the founder and Chairman of Zenith Bank Plc, one of Nigeria’s largest and most profitable banks. Zenith bank has a market capitalization in excess of N600bn. Here are some business lessons from Jim.
1. Follow your instinct
In 1990, the year Jim applied for a banking licence, there were 2 categories available. One for merchant banks ($1.6m equity) and one for commercial banks ($4m equity). His gut told him to go for the more expensive, complicated route – the commercial banking licence, and this gave birth to Zenith Bank. If he didn’t apply for that commercial banking licence, Zenith bank as we know it, wouldn’t exist today.
2. Learn the art of negotiation
When Jim applied for a banking licence from the Central Bank of Nigeria (CBN) in 1990, the standing rule was that applicants must have 20 years of banking experience to qualify for a licence. Jim had only 10 years of banking experience at that time. He was, however, able to convince the CBN team to grant the licence by informing them that his 10 years of experience were in top-rated banks (subsidiaries of American banks), known for their high-quality training and structure and that he was eminently qualified to run a bank. He made a compelling argument and negotiated well. He was granted the licence.
3. Seek out new ways of doing things
Jim knew the importance of branding and saw to it that each branch of Zenith bank looked the same, making them easily recognizable. At that time, it was a completely new concept in the sector, which several banks started doing a couple of years later.
4. To succeed in business, you must cultivate a deep hunger to do well
In the early days of Zenith Bank, Jim would go home with a report of all the day’s transactions and working past midnight, he would go over all the customers’ names so he could call and thank them the next day. This earned the bank a lot of incremental business leading to its success.
5. Empower those who work for you
Jim empowered his staff by mentoring them, attending their social gatherings, empathizing with them over their family matters. He also sent them for various trainings and conferences (locally and internationally), making them better and more productive employees.
6. See the future ahead, know when to exit a business
Jim had to sell Visafone, his telecommunication company, to MTN Nigeria because of his business philosophy, “Be a market leader, not a follower.” Although at that time, he didn’t sell businesses but acquired them, the fact that MTN was the largest telecommunications company in Nigeria while Visafone was one of the smallest and given the importance of scale in the business, when MTN made a decent offer, he sold the business to them at a profit.
7. Home is a source of support outside the office
According to Jim, one must derive authentic pleasure both in the workplace and at home, but should not create barriers between both of them.
From the Book Africa Rise and Shine by Jim Ovia
Contributed by Bode Omotoye
Banker & Chartered Accountant resident in Lagos.
CIFI: Despite CBN funds, can the creative industry thrive in this environment?
The Nigerian technology ecosystem is at its nascent stage, and beyond money, there is the need to ensure an enabling environment for operators.
Despite a frail 2020 for the Nigerian economy, there was a bit of silver lining. The Nigerian Information, Communication, and Technology (ICT) sector emerged as the leading segment of the economy aiding the country’s exit from recession by a whisker in Q4 2020.
The development, in effect, justifies to some extent, the earlier decision of the Central Bank of Nigeria (CBN) to create the Creative Industry Financing Initiative (CIFI) to support businesses in the following areas:
- Information Technology
- Movie Production and Distribution
The CBN began to contemplate the idea of the CIFI following the influx of private investment into the technology space in 2019. For instance, according to the African Tech Start-ups Funding report for 2019, Nigeria got foreign exchange inflows totalling US$137.9m in the period.
This continued into 2020, considering that despite the pandemic, the sector still attracted an additional US$122m in seed funding. Furthermore, the sector contributed 13.12% of the total real Gross Domestic Product (GDP) of Nigeria which came to N19.53tn as of Q4 2020.
Evaluating the progress made so far with the CIFI, as of Q3 2020, the CBN had reportedly disbursed c. N3.12bn in intervention to 320 beneficiaries. While there are concerns around the tenor of the loan for Software Engineers and accessibility of funds to other technological entrepreneurs, we laud the CIFI and encourage relevant agencies to do more.
The Nigerian technology ecosystem is at its nascent stage, and beyond money, there is the need to ensure an enabling environment for operators. For instance, the recent BVN concerns that rocked the financial technology space and the regulatory uncertainty which is a key risk for telecommunication operators among other concerns, are issues that should be decisively dealt with.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange
Book of States 2020: Vast resources, low industrial development
State governments have been heavily reliant on FAAC distribution to meet recurrent expenditure, thus making no room for capital spending.
The Nigerian Investment Promotion Commission (NIPC) in a recent report titled “Book of States 2020” highlighted the investment prospects of the 36 states of the federation including the Federal Capital Territory (FCT) to steer attention to the subnational investment opportunities in Nigeria. We note that the report is an outcome of a partnership between the commission and the Nigeria Governors’ Forum (NGF) to showcase the key investment opportunities for each state.
The report focused on the key areas of physical capital (airports, railway stations and seaports), resources (natural and minerals) and demography (population and labour force) of each state including their Internally Generated Revenues (IGRs), budget spending and household consumption.
While we acknowledge the decrepit infrastructure as a major hindrance to the growth of businesses and economic prosperity of many states, we note the little emphasis placed by the states on financing capital projects to attract private sector investments. Over the years, state governments have been heavily reliant on FAAC distribution to meet recurrent expenditure, thus making no room for capital spending.
The truth is that as long as state governments do not make desperate efforts to develop their internal revenue-generating capacity, the states in the country would continue to operate an inefficient rent collection system where they rely solely on FAAC allocation to meet basic needs such as paying workers’ salaries.
In our view, we believe the efforts to revive the ailing status of many states depend on the effectiveness and soundness of policies made to propel investments. Currently, Nigeria has enormous potentials to improve tourism given its ample amount of resources to attract both local and international tourists. Many countries in the continent such as South Africa, Kenya and Morocco have made great fortunes from tourism.
Over 50% of the states have recorded no foreign direct investments over time due to little or no requisite infrastructure needed to attract capital inflows amid untapped resources in these affected regions. Also, we believe the Federal Government needs to relax its control on some of the state-owned resources to enable the states better exploit these resources.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly-owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Nairametrics | Company Earnings
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