Africa is fast becoming a country, especially as nations embrace the African Continental Free Trade Agreement. In this interview, the Group Chief Executive Officer of DLM Capital Group, Mr. Sonnie Ayere, explains that any organization seeing the likes of Nigeria, Ghana and others as countries is still living in the past. He states that Africa will morph into a country over time, as individual nations will become states of the continent. According to him, in less than a decade from now, DLM should become a Pan-African financial institution, exploring nations across the regions as states. Excerpts:
How would you describe your legacy and biggest achievements in Nigeria’s financial industry up to date?
I would say my first legacy was the development of the Nigerian Domestic Bond Market. I was heavily involved in putting that market together back in 2003/04 & 05 during my IFC/World Bank days. That for me is my most important legacy as it has had, as I knew it would, a major impact on the Nigerian economy across all frontiers.
The second would be the setting up of DLM itself because that’s the company that I run. The others that I can add would be the setting up of Nigeria Mortgage Refinance Company (NMRC). We were also heavily involved in the setting up of DBN, that’s the Development Bank of Nigeria. I believe NMRC and DBN will have a major developmental impact on the Nigerian economy- DBN from an MSME, job creation, economic development perspective and NMRC from the perspective of developing the housing market which as you may know, creates more jobs than any other sector of the economy.
Q: Who are the people you look up to whether related to the financial sector or not and what actually do you see in them that makes you look up to them.
Let me start with Atedo Peterside. I have always admired him right from my London days when he was just starting IBTC back in 1989-1990. I admire him for being able to build a very strong institution, I admire the fact that he was able to build a crop of professionals that were loyal. A lot of the people there today were there from the beginning and they have all done exceptionally well.
I also respect Otunba Subomi Balogun, another builder who was in fact, the first person to be awarded an indigenous merchant banking license in Nigeria. I admire him because he has been able to build what I would call a balanced life and a great financial institution. The move from building a stockbroking firm to a merchant bank to a domestic commercial bank and now to an international bank; plus being able to build a great family and groom great kids who have all done very well, must be admired. He has also written books about his life which have helped people like us learn more about entrepreneurship and doggedness.
Tony Elumelu is also someone I admire a lot. I love his positive energy. He is someone who has in his own time been able to start something from scratch and made something great out of it. Those are the kinds of people that I admire and look to emulate going forward.
Why do you look up to them?
It’s very simple. What I like in them is just their will to create. I remember at one time in my life, I had a career opportunity that came with great monetary benefits. I also had an opportunity with the IFC and I remember sitting down probably for about six weeks to plan and decide which to go for. One nice lovely afternoon, I drive out into the countryside in my Porsche 968 convertible and this thing hits my head. It says, “do you want to create, or do you want to trade?” and for me, the lights came on and I was convinced that I want to create, for the next generations to come.
I decided then that I was not going to take the job merely for money and that I was going to work for the IFC. It was like someone offering you N100, and then, you go instead for the one offering you N25. Can I say I am fulfilled so far, yes I am. Was it the right decision? Absolutely, yes. The things I have done today, I never would have done if I hadn’t focused on creating instead of merely going for the money.
You will also agree with me that challenges are part of life. What are the biggest challenges you have faced or you are facing in business?
I think the major one here in Nigeria is really policy flip-flops. That is the major problem making it very difficult to operate a business with consistency. Policies just flip and flop, making it very difficult to plan. Exchange rate depreciation is just going through the roof. You can imagine if it was a very stable economy with stable naira, it would have been such a great place to build and work.
So, it has really been more about the macro-challenges, policy flip-flops all around the place and to some extent over regulation. Take investment banks for instance, their fees are heavily regulated in Nigeria and this is something that typically should be negotiated between the parties. Things like this have really stifled the growth of investment banking in the country as their ability to adjust their earnings to the falling living standards in the country is strongly inhibited.
To mitigate some of these challenges, anybody looking at Nigeria now as a country is not seeing the big picture. Nigeria should be categorized as just one state in Africa.
However, my overall experience living here since 2005 has been gratifying and eye-opening. And if I were to advise anyone thinking of coming here, my answer would be yes, absolutely so.
Between 2009 and 2015, you did a lot almost at the same time. Is that connected to your passion to create?
Yes, absolutely and also the opportunity came at the right time. Starting with the DLM Capital Group and then building it brick by brick. Then, the opportunity coming from Ngozi Okonjo-Iweala who then asked me to come in and set up Nigeria Mortgage Refinance Company (“NMRC”) because she listened to what I had to say, and thought I was the right person to manage the task. It was because of the success of what we did with NMRC that moved me to the setting up of Development Bank of Nigeria (“DBN”), and the success of that also brought about the setting up of the African Energy Investment Corporation (“AEICORP”) a DFI designed to channel international capital market monies into developing the clean energy space of Africa.
So, it was opportunity coming after opportunity and being able to perform optimally on each available opportunity. Also, working with good people was a notable factor because it was not just me. Obviously, people who have worked with me always say that I will make a good teacher because they typically learn a lot from me. Having and harnessing the talents of the right team was very helpful.
What were the gaps you saw that made you create DLM Group?
I felt that certain financing techniques had not been properly explored in this system and I have since been a champion of developing securitization technology in Nigeria. So far, we have been able to do quite a number of transactions using that financial technology. The other areas like mortgage warehouse funding were designed because we saw a gap in the housing and affordable housing space. NMRC was designed for providing long term financing whilst Mortgage Warehouse Funding Limited (“MWFL”) was designed to provide pre-financing to mortgage banks especially. In order to improve the legal environment, the model mortgage foreclosure law was drafted in my board room with seven of the best law firms in Nigeria. The country should say a big thank you as this was done pro-bono.
I have always thought that the mortgage sector would be a fantastic sector to help create wealth for Nigerians across board; but more importantly, to help remove the level of corruption mindset that exists here. My view is that, one of the most important things that any man/woman wants to have is a home and a home is the beginning of everything else. If you are able to get a house and other assets like cars, etc. and pay for them at your pace which is why you have the Pay As You Earn (PAYE) system everywhere else; I think it would have a positive impact on reducing the level of corruption in Nigeria.
What were the feats you were able to record at NMRC, and African Energy Investment among others?
To start with, the domestic bond market has had a tremendous impact on the Nigerian economy. I decided that I was going to do something about the Nigerian bond market in 2003, this was just after the failure of the 2003 inaugural issuance which was the most boycotted by the market. There was no belief in Nigeria’s ability to borrow long term. The funds to create the market came from Canada, it was a Canadian grant of $150,000 that was used to hire the professionals needed to set up the Nigerian Bond market. It has been so impactful because today, that market runs in the trillions, allowing many domestic firms to be able to fund their long term developmental and growth plans.
In terms of NMRC, it is doing well but it could do better. A lot has been done in terms of providing liquidity to mortgage banks. The mortgage banks could do a lot more but I think the interest rate environment does not help and these are some of the critical exogenous reasons that are hampering the growth of the mortgage market. The same reasons apply to the Mortgage Warehouse. Now, if you look at DBN, I think it will do fantastically well. Its ability to raise money from the domestic capital market at the best possible AAA cost, should ensure its ability to create a sustainable means of funding itself and the SME market without any major government intervention.
If you look at how the Bank of Industry has had a good impact on the economy, I think DBN will also have a similar impact on the economy. I’m happy we raised the money back then; it was about a billion dollars in capital. We went to CBN to get the mandate to do it and we did it successfully. We got the company capitalized; took it through the Central Bank regulatory requirements, got all the licenses done and wrote all the different operating policies. We are pretty proud and happy to see the company fly.
I also sit on the Capital Market Master Plan Implementation Council (“CAMMIC”), as a member. The council was set up to ensure that the master plan as approved by SEC for the growth of the Nigerian capital market is successfully executed.
What new ground is DLM breaking?
We have decided that we are going into the digital banking space. In pursuance of that, we acquired a unit microfinance bank and recapitalized it to a state micro-finance bank. We started from originating consumer loans, both private and public sector loans. And we are now at the point of working with other stakeholders and parties to actually launch the bank itself. This will allow our customers transfer money, pay bills, etc.
In the next 10 years, where do you see DLM Capital Group?
A Pan-African institution. Anybody looking at Nigeria today as a country is making a mistake. Nigeria is a state. Just the same way you say, oh, we started in Texas, then we moved to Hawaii and then we moved to New York. The same way you say, we started in Nigeria, then we moved to Ghana, then we moved to Kenya, then we moved to SA, moved to Angola, that’s how it should be. With the AFCFTA initiative, it tells me that I can go to Mozambique, set up shop, have another in Ghana and other parts of the continent seamlessly.
By then would you still be the CEO of DLM, probably?
I would have moved on. Of course, I won’t be CEO by then because I would be in my 60s. I wouldn’t be CEO because first of all, your competition will be at least 15 or 20 years younger. You should be able to sit back and just be on advisory boards; keep yourself updated; keep yourself in the loop; and make sure the world doesn’t run too far ahead of you.
Were you expecting to emerge the Investment Banking CEO of the decade and what do you think earned you such feat?
I wasn’t expecting it. In fact, when the award organisers came and said they were thinking of giving it to me, I was pretty shocked. However, I later felt I deserved it, although I was not the only person that started a capital market company in the late 2000s, as there were great guys like Bolaji Balogun, Kayode Falowo, Chuka Eseka, Ike Chioke among others but I was the only one that did not have support. Others had a board or godfathers but, I built DLM on my own. In fact, we constituted our board in 2020. So, imagine that entire period, ’09 to 2019 which is a decade, it was just me. Hard work, no doubt, ambitious no doubt but, at the end of the first decade, loads of lessons learnt and a growing institution that is creating jobs and impacting human lives.
On CSR, what are the projects you embarked on and how has this actually helped or developed both the environment where you operate or maybe even outside those environments?
For CSR, we are only focused on education so far. We basically look at providing school fees for gifted children that don’t have parents that can support them. That is kind of where our focus is at this point in time. We are not doing anything beyond that right now.
What is your message to the younger professionals in the financial sector?
I observe that they are in such a hurry. Actually, I don’t understand them. They are just in a hurry for everything to happen. To them, everything must happen overnight. My advice to them is that things don’t happen overnight. If I want to address them, it will be; look guys, there is no lift to success, you climb every step and take it step by step. By the way, think about it, if a lift went up and it failed, guess what happens when it is coming down – it crashes. You must take the steps, and it’s one step at a time. So, take your time. There is no rush. And to be honest with you, one thing I have learnt in life, it’s never how fast, it’s how well.