Unfinished Business

Herbert Wigwe and the story of Nigerian banking

In 1912, a pamphlet was published in colonial Lagos under the title An appeal from the native traders of Lagos to the financiers of Great Britain. The pamphlet was the culmination of long running complaints by Nigerian traders (note Nigeria as we know it today did not yet exist then) about the British Bank of West Africa (BBWA) discriminating against them in how it made loans. They complained that Nigerians were charged higher rates of interest when they managed to get loans and that they were third in the pecking order after European and Levantine traders. They had other very specific grievances one of which was that, because this was the period between the two great wars, what they (the Nigerian traders) saved in BBWA was invested in London instead of being lent back to traders in Nigeria.

Another grievance related to the Bank of Nigeria. In 1899, the Anglo-African Bank was established by a group of influential Nigerian traders to compete with the BBWA. It started off with three branches in Calabar, Burutu and Lokoja and later on opened others in Jebba and Ivory Coast. By 1905, the bank had done quite well and felt confident enough to change its name to Bank of Nigeria and began to compete directly with the BBWA for business. It also began to complain directly to the Colonial Office in London about having to buy all its silver coin at a premium (1%) from the BBWA. Eventually, the Colonial Secretary in 1906, one Lord Elgin (you may have heard of him), decided to terminate BBWA’s silver import monopoly and grant equal rights to Bank of Nigeria to import them in 1907. The two banks went aggressively at each other so much so that Bank of Nigeria began targeting BBWA’s customers in London with lower rates which forced BBWA to do the same in Lagos.

But a lot of the rivalry between BBWA and Bank of Nigeria turned out to be personality driven (and the market not being large enough to support two aggressive banks) and when the larger than life Sir Alfred Jones, Chairman of BBWA, died in December 1909, the conflict between both banks subsided almost overnight. His replacement as chairman, Lord Milner, wasted no time in deciding that both banks ought to be friends and not enemies and soon they were in discussion about BBWA taking over Bank of Nigeria. By May 1912, the following press release went out to the public and the Colonial Office:

The Bank of British West Africa Limited has entered into a provisional agreement to purchase the business, assets and goodwill of The Bank of Nigeria Limited¹

This led to the other complaint in the aforementioned pamphlet: once again the BBWA was the only bank in the entire region and cries of monopoly could be heard everywhere. The demand for Nigerian banks did not however go away with the demise of the Bank of Nigeria. If anything, it intensified. And in that sense, one might say that that long forgotten pamphlet was the forerunner of what we know as Nigerian banking today.

It took a while to get going but in 1929, the Industrial and Commercial Bank was setup in Lagos and collapsed a year later after making several dodgy loans to its managing director. That same managing director went on to start another bank named Nigerian Mercantile Bank a couple of years later in 1931. It struggled for five years before giving up in 1936. In between, in 1933, the National Bank of Nigeria was established with a solid and prudent management team which grew its deposits 500% between 1934 and 1939. By 1951, it had deposits of £871,000 (they had been £2,000 in 1934). The Nigerian Farmers’ and Commercial Bank would show up on the scene in 1947 but 30 branches later across Nigeria, it collapsed in 1952. The high water mark of the pre-independence period was between February 1951 and May 1952 when 18 Nigerian banks were registered. Only one of them, Merchant Bank, was still alive by 1954 (Merchant Bank itself lost its licence in 1960 for ‘misuse of government funds’). Dr. Nnamdi Azikiwe also set up the African Continental Bank in 1948 which had close links to the Eastern Region Government (a tribunal later investigated the bank and found that it had been insolvent several times and only survived due to government patronage obtained by Dr. Azikiwe. However it also found that there was no corrupt motive to his actions and his main motivation had been to ensure that Eastern Nigeria had a bank).

Agbonmagbe Bank was established in 1945 and grew slowly but steadily until the Western Region Government placed a £200,000 deposit with it in 1959. There were other banks like Berini Nigeria Bank (a joint enterprise between Nigerians and Lebanese), Bank of the North (also jointly owned by Nigerians and Lebanese) and Bank of Lagos (a Swiss-Nigerian affair) which all began life in 1959.

In July of that same year (1959), the Central Bank of Nigeria was born to regulate all of this growing banking activity.

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I’m sure Herbert Wigwe was getting round to telling his own story about how he found his place in the long running story of Nigerian banking before his life was abruptly cut short in California. Maybe there’s a manuscript out there that might eventually see the light of day. But for now, we have only the words of his co-conspirator, Aigboje Aig-Imoukhuede, who delivered his memoirs, Leaving The Tarmac: Buying a Bank in Africa in 2021.

The story is well known now how Nigeria’s self-styled military ‘President’, Ibrahim Babangida, ran into the usual trouble of collapsing oil prices in the late 1980s and sought help from the IMF and World Bank. One thing they both told him (among many others) was that Nigeria did not have enough licensed banks (the distinction is worth noting as there were of a course a number of dodgy ‘banks’ out there at the time). Babangida then led the public on a pointless debate of the IMF’s suggestions (with repercussions that still linger till this day) and when the public rejected the suggested package of reforms (many of them painful), he simply repackaged them as his own Structural Adjustment Programme (SAP) and pushed them through anyway. The recommendation for more licensed banks made it from the IMF to SAP and from 1988, in perhaps a replay of the post pamphlet years above, Nigeria went through another rebirth of its banking industry. In December 1988, Access Bank was granted a banking licence and by May of the following year, it opened its main office in Apapa, Lagos.

Many (or perhaps most) of the banks that opened in this period were on shaky ground from their inception and they got up to all sorts of shenanigans, mostly around foreign exchange dealing. They made money and often lost it too. But Access Bank managed to survive this period albeit somewhere in the relegation zone of the 90-odd banks in Nigeria at the time in terms of size and activity.

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Born within a month of each other in 1966, Aigboje and Herbert were both children of civil servants who eventually made their way into Nigerian banking in 1991 (after being introduced in 1989) with one of the banks that was established in the wake of Babangida’s reforms, Guaranty Trust Bank (GTB). They rose through the ranks and in Aigboje’s words:

By early 2000 I knew that if the banking industry took off without me in it as an owner I would be left standing on the tarmac.

The takeoff he was referring to was yet another rebirth of Nigerian banking triggered by the return of democracy in 1999 and a competent economic team making a lot of noises about reform and economic growth. He recruited Herbert into this idea and, with a lot of stealth, they began making plans to buy a bank while still working at GTB. By 2001, they had decided on Access Bank (encouraged by Aigboje’s church pastor) and set about raising the N1 billion needed to buy the bank. Between them, they had N200 million and so had to convince investors to give them the rest of the money.

Many years ago, before I left Nigeria, I heard a ‘street version’ of the story of how they bought the bank from a friend who was well connected at GTB. It ran something like this - Fola Adeola, the founding CEO of GTB, was getting ready to step down from the bank when he randomly received a phone call from someone calling to wish him well as he embarked on whatever he was going to do next. The person then told him (in Yoruba) that ‘but you said you’re retiring, why are you buying a bank again?’ Adeola was confused and protested that he was definitely not buying another bank. After further exchanges, he found out where the rumour was coming from - two of his ‘boys’, Aig and Herbert, had been secretly buying Access under his nose while still working for him. He immediately summoned them and demanded that they resign from the bank before he was scheduled to leave in a couple of weeks.

Here’s how Aig told the story in his book:

Once the public offer was approved by the Securities and Exchange Commission rumours inevitably started to circulate in financial circles that Access Bank had been bought by two young guys from GTB. Eventually our bosses at GTB, namely Fola and Tayo, learned the rumours as well. They demanded a face-to-face meeting at which they asked to know the truth. Without disclosing any details we let them know that indeed we were involved in a transaction whose aim was the acquisition of Access Bank. It was impossible for us to divulge details at that time because such information could and probably would be used to frustrate our plans. It was an emotional meeting for all concerned. They were mentors and friends and obviously felt betrayed that we would embark on a course of action which would see us depart from GTB without informing them.

Realising that there was nothing they could do to get us to change our minds, an agreement was reached that we should resign our positions with immediate effect.

Close enough.

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There are only 54 mentions of ‘Herbert’ in Aigboje’s book which runs slightly over 200 pages. It sounds like a low number for a couple of bankers who were joined at the hip and did everything together as they built Access Bank after buying it. But read closer and on every page there is a ‘we’ (more than a thousand uses in the book) leaving you in no doubt that this was a joint enterprise between friends. Aigboje was in the lead but they ran the bank together and it was always the case that Herbert would succeed Aigboje especially when the Central Bank of Nigeria brought in rules to limit the tenure of bank CEOs to a decade.

Here’s Aig again:

During the twelve-year period that we worked together as CEO and deputy, Herbert and I have never had a divergence of views or position on issues of corporate governance and risk management and I am constantly thanking God for giving me wisdom in the choice of my deputy. He was my friend and professional colleague for 10 years before we came together at Access and he is a tremendously gifted and respected banker, but the basis of my choice for this ‘second pair of eyes’ was my confidence that we shared the same beliefs and values

Sometimes, however, a sequel turns out to be bigger and better than the first part of a movie. When Aigboje handed over the bank to Herbert in 2014, he bequeathed a bank with N1.8 trillion in assets and around the 6th (or 4th depending on how you count) largest at the time. A decade later under Herbert’s stewardship, the bank now has somewhere in the region of N23 trillion (~$18 billion) in assets and is comfortably Nigeria’s largest bank by assets (Zenith Bank sits second with N18 trillion).

Herbert was a man in a hurry. In 2019, Access Bank completed the acquisition of Diamond Bank which created Africa’s largest bank by retail customers. From there he aggressively expanded it across Africa. And banking was not enough. From a standing start, his Craneburg Construction grew to become perhaps Nigeria’s second largest construction company, well inside a decade. Access Pensions (part of the Access Group) only last month closed the biggest pension fund administrator (PFA) acquisition in Nigerian history, creating the second largest PFA in Nigeria by assets under management. There was support for the arts matched by a personal collection to rival anyone else’s in Nigeria, including a recent commission of personal portraits by Kehinde Wiley

herbertowigwe

A post shared by @herbertowigwe

There were numerous investments in Nigerian startups that anyone will struggle to track down following his demise. As a friend put it to me, investments worth millions of dollars were made following conversations with him alone.

The apotheosis of the man in a hurry story was the very recent launch of Wigwe University which he had ambitions to turn into the ‘Harvard of Nigeria’. For a banker who had operated mainly in the shadow of others (and indeed himself) for more than three decades, putting his name on a university so publicly seemed like a turning point. He fronted videos for the university’s launch and was captured on camera a lot more frequently talking about the university and his plans for it.

Then there was the stupendous house he had just completed in Ikoyi, Lagos and moved into in December 2023. Part advertisement for the know-how of his Craneburg Construction and part statement of intent as Nigeria’s richest banker, it was impossible to miss the white glass and concrete sprawling edifice. Following a cancer scare a few years ago, he joked to people that the way he was making money, he hoped that God was not planning to take him soon. Morbid and at once prescient as it turned out to be.

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Nigerian banking is not easy to love. They manage to be incredibly annoying while being protected from any serious external competition at the same time. The Central Bank of Nigeria has also worsened matters by regulating them into sameness with some very prescriptive rule-making. And so they all charge the same charges and offer the same products at the same prices (if you ‘suggest’ to Nigerian banks that the maximum they can charge for a product is X, they treat X as the target not the limit and all go for it). Very little interesting is going on in the industry and the difference maker is often size and not much else. They have also perfected the art of making a fortune without doing any actual banking (defined as taking deposits from customer A and lending it on to customer B), instead focusing on ‘trading’ and foreign exchange games. The people who run the banks seem to get a lot richer than the shareholders on whose behalf they presumably run it.

In that sense the outpouring of grief for a dead Nigerian banker might look unusual to any outsider. But the explanation is perhaps a simple one - that Herbert put in a lot of effort to make friends outside of his banking and finance world. I never came within 100 feet of him (not that I recall anyway) let alone have a conversation with him but I have found myself consoling a number of close friends of mine who counted him as their friend. Their loss is palpable and a number of them have admitted to tears. For an exceedingly wealthy Nigerian banker, the level of accessibility that he cultivated was remarkable. In the multiple times that Nigerian banking has been reborn since the days of the pamphlet, a case can be made for Herbert as one of the most influential Nigerian bankers ever who took part in several of those episodes.

In a country where institutions are still very much the shadow of the men who own and run them, so much will now be up in the air with his passing. “The scale of what he is leaving behind unfinished is staggering” was how a friend put it following his death.

That is hard to argue with. And yet, the story of Nigerian banking is hardly ever finished.

Herbert Onyewumbu Wigwe, Nigerian banker, died on 9th February 2024. He was 57.

1. Bankers in West Africa: The story of the Bank of British West Africa - Richard Fry (1976)