Speculation about who will succeed Sanusi Lamido Sanusi as Nigeria’s central bank governor next year is mounting. Outgoing Access Bank CEO Aigboje Aig-Imoukhuede, one of the leading candidates, tells The Banker the role would be difficult to turn down. 

Prominent in the Abuja office of Sanusi Lamido Sanusi, Nigeria’s central bank governor, is a carpet bearing the logo of Arsenal, one of England’s top football teams.

If speculation in the country is to be believed, his replacement when he retires in June 2014 might be another ardent football fan, albeit one who supports Manchester United. Aigboje Aig-Imoukhuede, chief executive officer of Access Bank, one of Nigeria’s biggest lenders, has been widely touted as a potential governor should Goodluck Jonathan, the president, choose a commercial banker to follow Mr Sanusi, himself a former head of a major local bank.

Mr Aig-Imoukhuede, commonly known as Aig, is far from the only candidate. The president’s aides are thought to be considering several people, including Kingsley Moghalu, a deputy governor at the central bank and head of prudential regulation, and Atedo Peterside, a presidential adviser and chairman of Stanbic IBTC, the Nigerian arm of South Africa’s Standard Bank.

While not specifically saying he wants the job, Mr Aig-Imoukhuede, who is 47 and steps down from his role at Access at the end of this year, says it would be difficult to refuse. “For a professional banker who has operated as a CEO and had an exciting career, I guess it would be impossible to say that the opportunity to go one level up and work as the head of the apex bank would not appeal,” he says. “It’s appealing in that context. And it’s appealing if you have a developmental focus, which [I do]. It’s obviously a platform from which you can have a major impact on the country.

“But at the same time, I’m very aware that such positions are political by nature. It’s flattering so many people think I’m qualified. But, frankly, you leave it to those with the political power to decide.”

Political play

The decision over who will run the Central Bank of Nigeria (CBN) will be one of the most significant made by the president in the next six months, given the role of the institution in driving Nigeria’s economic reforms. Several analysts think Mr Jonathan will choose a figure less independently minded than Mr Sanusi, who, while winning widespread plaudits internationally for the way he revived the Nigerian banking sector after its 2009 crisis, has angered many lawmakers by complaining about corruption in politics and maintaining tight monetary conditions.

That elections are due in 2015 could complicate the process. Some fear that Mr Jonathan, who has yet to win formal backing from his own party to run for another term, might use the selection to placate his opponents by picking someone who will acquiesce to calls from politicians for, among other measures, lowering interest rates in the run-up to the election.

Mr Aig-Imoukhuede says the CBN’s independence has become more evident since the country’s transition from military rule to democracy in 1999, but that it cannot yet be taken for granted. “The most effective central banks are those with enough independence to pursue a growth, development and price stability mandate without being unduly influenced by the political process,” he says. “I think there’s a tradition within the central bank that has been established for institutional independence. However, this is Nigeria. Rule of law is still being entrenched. So a lot still depends on the individual.”

Mr Aig-Imoukhuede praises Mr Sanusi’s record, suggesting he himself would not change the CBN’s course significantly if he did become the next governor. He says the institution’s monetary policy, which has led to exchange rate stability in recent years and inflation falling to 8%, its lowest level since early 2008, is more transparent and sophisticated than ever. “[Mr Sanusi] has taken it to the next level,” he says. “In terms of his price stability mandate, compare our macroeconomic indicators as a country with other emerging markets. You would have to say that this central bank is operating at an outstanding level.

“I don’t think we’ve ever had as many PhDs within the central bank as we have today. Unlike in the past, the central bank, from a talent and capacity standpoint, is in some respects ahead of the [commercial banking] industry.”

The rise of Access

Mr Aig-Imoukhuede’s profile has risen along with that of Access Bank. When he took over in 2002, the bank was little more that a bit-player. Today, it is the fourth largest lender in Nigeria by assets and Tier 1 capital, according to the Banker Database.

He is known for being ambitious, sometimes to the extent that his critics accuse him of arrogance and heavy-handedness. He admits that he long wanted to turn Access into one of Nigeria’s top-tier financial firms, which many of his rivals doubted would be possible. He recounts a story from around 2007, when several of the country’s bank bosses made presentations to investors in London. “During mine, I said: ‘Before I retire, I believe you’ll find that Access Bank is comparable in all respects with Zenith and Guaranty Trust Bank’,” he says, referring to two of the biggest and most profitable Nigerian banks. “The then-CEOs of those companies found it hilarious."

“My stewardship has been about taking an institution from obscurity into a position to lead African banking.”

Those who know him best were therefore probably unsurprised when Access exploited the 2009 banking crash to buy Intercontinental Bank, a large Nigerian lender that collapsed under the weight of soaring bad loans and corrupt management. About five banks did due diligence on Intercontinental, but all except Access pulled away after realising the state of its balance sheet. Mr Aig-Imoukhuede went ahead as he felt that the Nigerian government would have to establish a bad bank to buy the billions of dollars-worth of toxic assets lurking in the overall banking system, which it subsequently did when it created the Asset Management Corporation of Nigeria (Amcon) in mid-2010.

“We didn’t have Amcon at the time. All people knew was that we were trying to buy a terribly affected bank,” he says. “But we thought that the government would have to deal with these bad loans and take them off banks’ balance sheets. We had seen what had happened in other countries. Other guys couldn’t see this. Every time we said we were buying, our share price kept falling. Everybody felt we were crazy.”

Real economy lending

The takeover, which doubled Access’s assets and more than trebled the size of its branch network, was scarcely simple. But most analysts have been impressed by the integration, which resulted in Access making a record pre-tax profit of $290m last year. “It’s been very tough,” says Mr Aig-Imoukhuede, who will be succeeded at Access by Herbert Wigwe, his deputy CEO. “But it has been transformational. The value addition in terms of earnings per share has been remarkable. I think 2013 will see the end of the tailwinds associated with the acquisition and 2014 will be when Herbert and his team start flying.”

Nigerian banks are often accused of only lending to blue-chip firms and buying high-yielding government bonds, to the detriment of small and medium-sized businesses in need of credit. Mr Aig-Imoukhuede argues that while structural deficiencies, including electricity shortages and poor infrastructure, can make it risky to lend to small companies, the banking industry is contributing far more than in the past to the country’s economic development. He says the CBN’s attempts to guide credit to certain sectors, including agriculture, are working, while commercial bankers are collaborating more closely with the government to ensure its policies help the private sector. “There is no sector that has done more in the past five years to push the case of the real economy than the banking sector,” he says.

As to the future of Nigerian banking, Mr Aig-Imoukhuede is particularly excited about the prospects for consumer lending. He says the government’s plans to create a mortgage refinance company, which could start operating in the next year, will help boost the number of mortgages from about 20,000, a paltry figure for a country with a population of more than 160 million. And he thinks credit cards and personal loans for items such as white goods will take off. “I see the whole consumer lending space transforming in the next 10 years,” he says.

Potential unfulfilled

Foreign investors are piling into Nigeria, attracted by its monetary stability and real growth rate of 6.5%, which, if maintained, will probably see the country overtake South Africa to become the continent’s biggest economy in the next decade. Yet critics say it could be doing so much better, stating that widespread corruption, poor governance and the theft of about 250,000 barrels of oil a day are hindering its development.

For his part, Mr Aig-Imoukhuede uses a football analogy. “Nigeria is a team that has great potential and resources,” he says. “However, we know that the team is not playing well. The issue is simply that with more effective management, it can go from a great potential case into a fantastic team.

“We have competent managers in many aspects of the Nigerian economy. We have not so competent managers in other aspects of the Nigerian economy.”

One of the most important of those managers will be the next person in charge of the central bank. Nigerians will be hoping that whoever takes over next year will be as effective as Mr Sanusi at helping their country turn its potential into reality.

PLEASE ENTER YOUR DETAILS TO WATCH THIS VIDEO

All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker



For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Join our community

The Banker on Twitter