In an exclusive interview with Hichem Ben Yaïche, leading financier Tidjane Thiam, now executive chairman of the investment company Freedom Acquisition, relates his vision of Africa and his belief in building more on the human capital of the continent.
Given his DNA, it is hardly surprising that Tidjane Thiam has managed to achieve so much at such a level so early in life. His mother, Marietou, traces her descent to Ivorian Queen Yamousso after whom the capital of the country, Yamoussoukro is named; Marietou was also the niece of Félix Houphouët-Boigny, the first President of Côte d’Ivoire.
His Senegalese father, Amadou Thiam emigrated to Côte d’Ivoire and, as a powerful journalist, supported Houphouët-Boigny during the struggle for independence and later served for a decade in his Cabinet. Tidjane’s uncle, Habib Thiam, was Prime Minister of Senegal on two occasions in the 1980s and 90s.
The young Tidjane was a brilliant student, coming top of his class in various academies, including the École Nationale Supérieure des Mines de Paris. He received an MBA from INSEAD and joined McKinsey, taking a sabbatical to get some invaluable experience at the World Bank.
He made international headlines when he was appointed the Chief Financial Officer of Britain’s banking and insurance giant, Prudential in 2007. He was the first black person to be appointed to such a high profile position in corporate Britain. He made even bigger headlines when he was head-hunted to run the Swiss banking and financial services behemoth Credit Suisse Group AG in 2015.
An hour after news of his appointment, the company’s shares rose 7.5%. He led a root and branch restructuring process that saw the company’s expansion in wealth management. Between 2016 and 19, under Thiam, the company generated new assets of €113.7bn, and pre-tax profits grew at15% for four years in a row, from €2.5bn in 2015 to €4.4bn in 2019.
However, in 2019, following a messy dispute with a former company employee he resigned from the company.
Since then he has been in high demand to head various organisations and in 2019, became a member of the International Olympic Committee. He is currently the executive chairman of global investment company Freedom Acquisition. Here he is, in his own words:
New African: You have done so many things in your career that it is difficult to know where to begin. What are you doing at the moment?
Tidjane Thiam: The situation for each of us is always the result of one’s will and of circumstances. Sometimes the will prevails over the circumstances and sometimes it is the opposite.
My career began in the private sector – by choice. I wanted to get to know the business world in depth, hence my years in consulting, starting with McKinsey.
Following the death of President Houphouët-Boigny at the end of 1993, I was asked to return from France to Côte d’Ivoire in 1994 by President Henri Konan Bédié.
I was asked to lead the Department of Works and later appointed CEO of the National Bureau for Technical Studies and Development (BNETD) – an infrastructure development and economic advisory body reporting directly to the President and the Prime Minister. It was also my responsibility to negotiate with the IMF and the World Bank and work with the Privatisation Committee as we set out to sell off the extensive state-owned assets.
I had left my career in the West to go and do that for a few very rewarding years. I learned a lot there and, I hope, also contributed a little to the country.
However, circumstances again intervened. There was a coup in Côte d’Ivoire at the end of 1999 and I found myself back in the West
In 2002, I was head-hunted for a senior position in the City of London with the British multinational insurance organisation Aviva. I accepted because it was a really interesting position and because the CEO, Richard Harvey, for whom I was going to work, was someone quite extraordinary.
A few years later, in 2007, another insurance group, Prudential, called me and I became its managing director from 2009 to 2015. From here, my move to Credit Suisse and all my adventures there are very well known.
I am now entering the second half of a career that began in 1986. After 36 years spent in both the public and private sectors, I am now in a moment of pause and reflection. That said, I have also had to make commitments since this period has coincided with the Covid-19 crisis, in which I have been playing an active role.
Today, I have a portfolio of activities that all fascinate me. I have commercial activities with my company Freedom Acquisition Corporation, where I raised $345m; I’m on the board of directors of Kering which owns luxury brands such as Gucci, Yves-Saint-Laurent, Boucheron and Balenciaga – I chair the audit committee.
More generally, I also take on the role of mentor since some entrepreneurs are sometimes kind enough to ask me for advice and I am always very happy to discuss ideas with them.
I also have a number of activities more in the nature of public service missions. Thus, I am consulted on various issues by Heads of State and governments or example, I help President Kagame and Rwanda with their vision to make Kigali an international financial centre.
I belong to a number of think tanks – like the Council on Foreign Relations in Washington. I also carry out more specific missions such as my participation, in 2020, at the request of David Malpass, head of the World Bank, on the committee which appointed the new director general of the IFC, Makhtar Diop.
Sport is one of my passions and I have the great pleasure and honour of having been elected a member of the IOC (International Olympic Committee).
In short, I am not unemployed!
How would you sum up your extremely rich and varied background?
I was born in Africa. Genetically and culturally, I am African. I have never hidden my culture and where I’m from, which has a cost that I am willing to bear.
I am known, in my work and public statements, of taking the opportunity of making abundant references to my African culture. Everyone who has worked with me knows a number of Ivorian or Senegalese proverbs that they have now also adopted in their everyday language.
After the years spent in Côte d’Ivoire at the head of the Direction Centrale des grands travaux (DCGTx) then the BNETD and the many projects carried out during this period, I have never stopped working for Africa.
I had the honour, in 2003-2004, through the former UK Prime Minister Tony Blair to be associated with the Commission for Africa, which was really a very important moment. This work later led to the G8 at Gleneagles and all the debt forgiveness that drove African growth in the 2010s. I am proud to have been able to take part in this.
While I was at Prudential it gave me great satisfaction to create a division that had not existed before – Prudential Africa. Being a football lover, I was watching the African Cup of Nations competition a few weeks ago when I saw the Prudential Africa commercials on display and this gave me a good deal of satisfaction.
I couldn’t resist sending a message to Matt Lilley, whom I had appointed at the time as boss of Prudential Africa, because the little discussion we had had in my office in London so many years ago had blossomed into reality.
You move within the highest circles. What have you learned about decision-making and how big decisions are taken, things that we are not privy to?
One of the things that this experience teaches you is the permanence and importance of the human factor in everything that we do.
I had basic scientific training but I must admit that I have evolved a lot from the convictions I had at the start of my career. I believed then, like many people who have this type of training, in equations. Since then, my faith in equations has diminished and my awareness of the importance of the human factor in everything we do has grown.
Ultimately, we can only act through men and women, their convictions, their motivation – what English speakers call ‘hearts and minds’.
Unfortunately, in classic Cartesian-type training, we are taught above all to speak to the mind – to the brain – and not at all to the heart, to the guts. In the end, people only act and are moved by emotions, by the heart.
I love this well-known and almost overused anecdote of John Fitzgerald Kennedy visiting NASA when it was planning the mission to the moon. Meeting a sweeper, he stops and asks him: “And you, what are you doing?” The street sweeper replies: “Mr. President, I am helping to put a man on the moon!”
That sense of mission and vision is what is really, really important – human beings are ultimately only motivated by such things. That’s what I learnt.
What can be done to lead Africa towards a virtuous cycle?
To make the link with the importance of the human factor, the answer belongs and can only belong to Africans themselves.
The challenges are many and real. What we Africans have in the face of these challenges is our intelligence, our capacities, our emotions, our determination and our convictions. This is what we realistically have to work with.
Natural resources are good, but they are only worth anything if we are able, first, to extract them and, second, to manage them well. It always comes back to the human element and human capital. So you have to manage to combine three things.
The first is private initiative. For me, to trust someone is to trust the human race. Human beings, faced with a situation of pressure, are endowed by nature with the ability to rise, to be creative, to act. Rather than preaching, we must trust African men and women. In a nutshell, let the private sector, private enterprise, develop.
The second, closely linked to the first – and which is at the heart of everything – is to invest in this human capital. Which brings us to the issue of health and education. The two elements feed and reinforce each other.
For the third element, creating a favourable environment, it is important to make a distinction between the ‘hard’ and ‘soft’ as in the computer hardware and the software. They must both be adequate.
The ‘hard’ infrastructure is what we talk about every day and what I was doing in Côte d’Ivoire – roads, wells, bridges, airports, container terminals, thermal power stations, hydroelectric dams, solar panels… infrastructure in the broad sense.
However, the ‘soft’ is actually what matters most. I include things such as respect for human rights and fundamental freedoms, the rule of law, the absence of corruption, the refusal to violence, etc.
These elements, when present, provide a favourable framework for private enterprise. If I had to sum up my thinking in one word, it is about culture. It’s the culture, what’s in people’s minds, that guides their behaviour and ultimately it’s the behaviours that matter more than roads and bridges.
We talked a lot at the beginning of the 21st century about ‘soft power’, which can be translated as influence, others seeking to imitate you and are inspired by your example.
All countries are engaged in a race for soft power. They realise, more and more, that this is the real power. Take, for example, what the US has done in Silicon Valley and through Facebook, Instagram, Netflix. They have changed the way we all live!
The creation and then the success of Netflix has a direct impact on hundreds of millions of lives. That is real influence. And we see that soft power today can slow down or even stop the advance of army divisions and tanks…
We are moving towards a world where it is the intangibles that have the most value. If you look at the balance sheets of companies today, it is no longer their factories, their properties and the equipment that make up the bulk of their worth. What matters more and more is what is called goodwill, i.e. the value of intangible assets of companies such as brands or intellectual property.
Can Africa prepare for this game-changing revolution? Can we win this war?
Yes, Africa has no choice! We have to participate, otherwise we will be progressively marginalised. You can rarely win the war with the techniques and technologies of the previous war.
We must be aware that we are all engaged – all countries on all continents – in a battle for innovation, for intellectual capital and for intangibles. This is what determines the value of an Apple or a Google. The latter has very few physical assets but is worth nearly $3 trillion thanks to the intelligence of employees that the group has been able to hire and motivate.
All of this may seem far removed from our African concerns. But I was recently talking to an entrepreneur I know in Silicon Valley and was surprised to learn that he has already made seven significant investments in Africa and the Middle East! It is in developing pharmacies to distribute medicines to 400,000 registered patients in Ghana, and is also investing in South Africa, Kenya, Egypt, Nigeria, Saudi Arabia and Dubai.
Technology should be seen as a lever that can allow us to win. Nations have long led efforts to foster African integration; at the same time, major progress is actually being made by the private sector motivated by profit and economic success.
I know seven or eight companies that are each already established in about 15 African countries and enable money to be sent from one country to another in Africa in complete safety. This is economic integration achieved by people who have been well trained, for many, in Africa.
Africa is thus beginning to reap the dividends of the investment it has made in its human resources across the continent and in the diaspora. These women and men are putting everything they have learned at the service of the African economy. This is how we will win.
Are you satisfied at the rate things are progressing in Africa?
I remain eternally dissatisfied, not only about Africa. Dissatisfaction is one of the most powerful engines of evolution!
On the contrary, we must go faster than the others. If we are less advanced than the others, it is not by working less that we will manage to catch up with them and even less to exceed them!
That said, you need a healthy appreciation of things and know how to motivate without discouraging. Dissatisfied but not disillusioned. We’ve made progress, but the road ahead is still long. There is no room for complacency but we must also know how to appreciate – given the challenges faced by our forefathers – the path that they opened to have enabled Africa to travel, to study, to progress. This means we have the foundations to succeed but we need to move faster.
Do donors take what you say into account in their approach to Africa?
Donors remain an important actor in Africa. They play a useful role and we are lucky to have an African, Makhtar Diop, at the head of the IFC and Kristalina Georgieva, a Bulgarian, at the head of the IMF. They both understand the dynamics I have just described and provide significant support to the continent. The European Union and other donors are not left out.
That said, there is such a disproportion today between the resources of public actors and those of the private sector. The most important challenge for Africa in the years to come is how to benefit from the huge volume of private capital available in the world – which can range from tens of billions of dollars to hundreds of billions.
The development we are currently seeing in Africa is ahead of my expectations and that makes me rather optimistic. Twenty years ago, I could not call an investor from Silicon Valley and hear him speak to me spontaneously about Africa. Today, when I call them, they speak not only of Africa but of Kenya, Nigeria and Egypt. It means that they have come down to the country level, put us on the map and a fundamental step has been taken.
Now, when they call me, it’s no longer to ask me whether to invest in Africa or not, but where to invest in Africa. They want to be enlightened on the dynamics of the countries. It’s very positive.
How should African debt be treated today?
In the long run, the only real solution to debt is growth and that will come from the things I just told you about. To look at the debt is often to look at the symptom rather than the cause.
Debt is not bad in itself if you have enough growth and pay it down. All the states that have taken off economically have gotten into debt at some point because they needed more capital than their own savings capacity could provide.
The obsession must be economic growth. In this context, it is essential to better mobilise the domestic resources of African economies. The development of local financial institutions and in particular, pension funds – given the youthful demography of the population on the continent – is essential to finance and stimulate investment.
Economic growth is an imperative that is all the more important for Africa as population growth is very high although it is a little less now from when we had 3.8% population growth in Côte d’Ivoire when economic growth was less than 4%. This additional pressure in Africa is real but, as China has shown, it is possible to have explosive growth for a long time.
Could you give a personal ranking of the countries that are on the right trajectory?
I don’t want to call out good and bade performers. But we can proritise the areas we need to focus on.
We must start with agriculture because one of the first economic opportunity is still to feed human beings, especially in the context of increasing urbanisation. You can see great dynamism throughout the agricultural sector.
African peasants sweat blood and tears to produce an agricultural harvest in a very hostile environment where, very often, 40 to 60% of this harvest is destroyed by insects or rots on the edges of the field.
We can see huge gains to be made all along the agricultural value chain. For example, in order to ease tensions in West Africa between herders and farmers, a young Ivorian entrepreneur makes mini-mills that allow the surplus agricultural production to be transformed into animal feed. Suddenly, this created a win-win situation.
The cultivator’s harvest, which was rotting, now has a value. The herder who was always in conflict with him is happy because he can now feed his cattle. This is what I have in mind when I talk about innovation, human capital, ingenuity.
The combination of general knowledge with local knowledge necessarily leads to innovations that improve things.
Financial services is another area where there is a major problem with SME financing for small loans around $1,000 to $3,000. Many digital solutions are being put in place. In Nigeria, I have spoken to young entrepreneurs who do referral-based lending and experience less than 1% loss. All of this is done digitally by taking advantage of the expansion of cell phones.
There are endless investment opportunities. One of the most interesting things about all these successful African companies is that they are expanding to 10, 14, 20 countries. There is a ‘contagion of success’ when they manage to achieve something. This is done by osmosis, without major declarations or major conferences, but happening close to the ground.
Are you tempted to switch to politics? Translating all of this into action is also important.
No, I really prefer to stick, for now, to what I know. I’m quite busy as it is and I manage to talk to everyone I need to and be listened to, which is an advantage. My goal right now is to have influence. For the rest, the future will tell.
Are you working on your memoirs, to conceptualise and, above all, to push this analytical vision of the world further?
Yes, I’m working on something. I believe that we must strive to continue a very African tradition, which consists of the older ones sharing their experience with the younger ones. I have learned a lot in my life from my readings and I hope to never stop until the day I leave the planet.
I am currently reading Homo Migrans [not yet translated into English], an extraordinary and fascinating book by Jean-Paul Demoule, where he explains that we are all descendants of migrants. He gives a statistic that I did not know: throughout the ages and everywhere in the world, only 3% of human beings migrate; 97% of human beings die where they were born.
I encourage anyone who has had an exceptional life or an experience of note to write it, to share it. For a long time, I told myself ‘Actions speak louder than words’; today, I arrive at a more nuanced position with perhaps a better balance between ‘action’ and ‘words’.
Which of the continents has inspired you the most?
I think, if I had lived in the 19th century, it would have been America. The 20th century will have been largely, in its second half, the century of China. The scale of this transformation is unparalleled and unprecedented.
Ezra Vogel, America’s foremost expert on China, describes in detail the transformation that Deng Xiaoping has achieved and says that never has one human being lifted so many people out of poverty. 700m Chinese have been lifted out of poverty.
When I went to China for the first time in 1984, there was not enough to eat there. China had a GDP of $259bn for a population of 1.2bn people. This country today has a GDPs of around $17 trillion. This transformation has profound implications for everyone. No one in the world is unaffected by such a major shift in the distribution of economic power on our planet.
We forget today that, in the 1970s, Asia was considered a vast disaster. We deplored the wars in Vietnam, Cambodia and Laos, the coups in the Philippines and Thailand. Many people then believed more in Africa than in Southeast Asia. Today it is an ocean of prosperity.
I had the chance to meet Lee Kuan Yew for a few hours that I will never forget. He told me, “Singapore’s goal is to spread prosperity.”
At first there were only the four Tigers of South Korea, Taiwan, Singapore and Hong Kong, exceptions in a sea of misery. Now look at Vietnam where I have travelled to often, Thailand, the Philippines and Malaysia. All are extraordinary success stories.
How do you see the situation after two years of Covid and a year that has begun with a war?
I talked about intellectual capital. What got us out of the Covid crisis? The doctor who created BioNTech is the son of Turkish immigrants in Germany. The answer to this problem came out of a man’s brain.
If there is one thing that the health crisis has vividly illustrated, it is the importance of intellectual capital and knowledge. We were all distraught, shutting ourselves up and hiding. This man, Uğur Şahin, and his wife, Özlem Türeci, liberated us.
Ask yourself, whenever a child does not go to school, where we would be if Mr. Uğur Şahin had not gone to school? Every time a child is out of school, you have to ask yourself this question. We may be cutting off an arm from humanity.
This is why this question of investing in men, women and children is at the heart of everything. Whether it’s Covid or Ukraine, at the end of the day, the solution is all about men and women.
There is a pressing appeal to this civilisation of humanism. But as we can see, today there is a war that is devastating a country. There will always be tensions, fault lines.
What I am saying is it is important to always have in mind the long term. We have a natural propensity, nature made us this way, to do the opposite, to put short term [interests and needs] ahead of long the long term.
This transition will only happen with a greater consciousness and deliberate actions. It’s in everyone’s interest to raise children even if it means that every dollar put into a child’s education doesn’t go to consumer spending, buying a TV or buying a steak. There are often sacrifices to be made to enable you to invest for the long term.
Your serenity and optimism are striking.
You can’t be me and not be optimistic! My mother was illiterate and never went to school. I could have been illiterate too. I was put in school. I was able, by the grace of circumstances and of God, to manage two of the biggest companies in the world. And I was born in Abidjan! I am not an emigrant born in Paris. I passed my Baccalaureate at the Lycée Classique in Abidjan. And I got to do what I could do.
I’m not saying this out of false modesty, but it’s important that everyone understands that I’m not exceptional. There are many people like me in Africa.
Every time I meet Westerners, Europeans, and even you, who shower me with compliments, I want to tell them that I am not unique. I think there are many Africans as talented if not more talented than me. They simply do not have the opportunity to express themselves and have not had the opportunity to access knowledge and express their talent.
Yes, I am optimistic because I think any African of my generation can tell a story similar to mine. I think 99% of Africans have illiterate grandparents, like my mother was. My mother was born in 1931. Many Africans born in the 1930s did not go to school. We are all descendants of these generations. Look at how far we’ve come since on all fronts!
This is what generates my optimism, along with my love for my culture, which is never to the detriment of other cultures. Africa has a lot to give to the world. What would music be without our input? What do people listen to, everyday, everywhere? In Beijing, in Rangoon, I hear our music. I hear the voice of Africa speaking everywhere. So why be shy and complexed? You have to take responsibility [for your destiny].
I say it, you can only succeed by being yourself. You have to be yourself, have confidence, set a goal and not give in to short-term temptations. We must put the long term before the short term and I am sure that, if not this generation, the following generations will see an Africa that the world will seek to imitate rather than teach it lessons.
The challenges are many and real. What we Africans have in the face of these challenges is our intelligence, our capacities, our emotions, our determination and our convictions. It is the only natural wealth we have to work with. This question of investing in men, women and children is at the heart of everything.