Nigeria: Return of the banking czars

Two of Nigeria’s legendary bankers, Jim Ovia, founder of Zenith Bank Plc, and Tony Elumelu, the former chief executive of the United Bank for Africa (UBA) Plc, are back leading their respective banks after a four-year enforced departure. What are the implications for the country’s banking industry? Frederick Mordi discusses.

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 mega-city 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 ground-breaking 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.