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Kolapo Lawson: ‘My Life With Ecobank’

Kolapo Lawson: ‘My Life With Ecobank’
  • PublishedFebruary 15, 2013

In December 2012, the offices of IC Publications received Kolapo Lawson, the chairman of Agbara Estates and also Ecobank, the pan-African banking giant. Stephen Williams profiles him.

It might be considered vain to equate the work of IC Publications Group (the publisher of New African and seven other magazines) with Ecobank, Africa’s leading banking institution by footprint. But nevertheless, there is a kernel of truth in the assertion that both the bank and the publishing house have, for many years, worked for the cause of Africa’s development.
Kolapo Lawson’s visit to the Group’s headquarters in London was an opportunity to find out about the man, his role in the creation of Ecobank and the realities of doing business in Africa.

Born in Lagos, Nigeria, one of seven children but the only boy, Kolapo (as his parents affectionately called him), remembers his parents as being both loving and very strict. “Our old man would insist we spend all our time studying, but overall it was a very happy childhood.”

Kolapo was sent to boarding school, first to Kings College in Lagos, in 1962 and then to Bryanston School in the UK in 1966. His schooling was, he says, “great fun”. Although there was only one other African at Bryanston, Kolapo experienced no discrimination. Yet it was spartan, and the cold took some getting used to. Kolapo recalls: “We rose at six o’clock each day, rain or shine, for a morning walk, but I enjoyed the experience.”

He then went on to study for his degree at the London School of Economics. His father, Chief Adeyemi Lawson, was a highly respected businessman, and it was thanks to his and the other founding fathers’ vision that Ecobank was formed in 1985.

A quick summary of the Ecobank story would be that it was decided by this group of founding fathers that the West Africa region really needed its own private sector regional bank to promote trade within the region. Furthermore, through a common private sector institution, the bank would also help reconcile differences and the mistrust between the French and English speaking countries in the region, by giving them a common focus and common objective.

As Kaye Whiteman recounts in his excellent book, The Ecobank Story: “To appreciate the bank’s origin, it is important to cast one’s mind back to the 1980s – a time of bleak economic fundamentals for much of the continent… The socio-economic conditions in a region which was split by artificial frontiers were not conducive to setting up an African bank. But the founders did not let that become a deterrent.”

In the late 1970’s, Chief Lawson took on the chair of the Federation of West African Chambers of Congress, and it was this fact that was pivotal in the idea of a regional bank first being taken forward – during one of the Federation’s meetings, in Mali, in 1972.

Chief Lawson, who had started his career as a barrister, being one of the last batch of Nigerian lawyers to be made a Queen’s Counsel in 1962, had left the bar a year later to start a business, running one of the first indigenous breweries  in the country. As one of the country’s new breed of industrialists, he was a visionary with grand ambitions.  
It took more than a decade for the concept to take root, but Ecobank Transnational Incorporated (ETI) was formed in 1985 with an authorised capital of $100m (a considerable sum at that time).

Chief Lawson – along with 67 other founders and two institutions (Burkina Faso’s Chamber of Commerce and the Ecowas Fund) – committed the seed funding required for the bank to open for business in 1988.
Whilst this was going on, his son Kolapo Lawson had graduated from LSE and had joined the leading accountancy firm, Coopers & Lybrand, qualifying as a chartered accountant in 1975.

As Kolapo Lawson recalls: “I went back to Nigeria with Coopers & Lybrand, and two or three years later my father asked me, ‘why are you working as a consultant, there’s no money in consultancy? Come and see how my business is run, let’s try and work together.’ So I joined him.  

By then, his father’s business included a 454 ha estate which they were developing as an industrial zone on the outskirts of Lagos in Ogun State.
“One day he said to me: ‘I think we should start a bank that will not belong to any country. We will seek shareholders from every single country in West Africa, and we will look for a country that will give us the best possible headquarters terms; there we will set up the bank. We want a country that will give us international status, freedom of movement of capital, no taxes, and then we will set the authorised capital at $100m. We will create the bank that all Africans can be proud of. That’s my idea’.
“Then, looking at me right in the eye he said to me: ‘You are the chartered accountant, go and do the research and write a paper.’ He gave me two weeks!”

That paper was presented to a meeting of the Federation of West African Chambers of Commerce, and was approved. They decided to set up two committees – a technical one to develop the idea with consultants, and a contact committee to sensitise West African presidents and the people in the various chambers of commerce to gain their support for the Ecobank project.

Kolapo Lawson joined the technical committee and worked on mapping out the specifications that would lead to the commission of a bank, finding a company to do the feasibility study, on the basis of which the bank was formed.

“The contact committee comprised of my father, Gervais Djondo of Togo, Issa Diop from Senegal, and Tommy Hope of Sierra Leone (who was to go on to become ETI’s first chairman),” Kolapo Lawson explained. “They went from country to country meeting people and presidents of the region.”

Kolapo Lawson pays credit to Gervais Djondo for taking the idea to President Eyadema of Togo. Djondo already had the president’s ear as he had been the head of Togo’s Economic and Social Council before heading the Togo Chamber of Commerce.

“President Eyadema thought Ecobank was a wonderful idea,” Kolapo Lawson recalls. Eyadema also believed that if his country offered the bank a headquarters, it would help to put Togo on the map. “He gave the founders practically everything they were asking for, and had it backed up by an Act of Parliament, so the Ecobank headquarters’ agreement is actually an act of the Togolese parliament,” Kolapo Lawson says.

That explains how both Kolapo Lawson and his father were intimately involved with Ecobank from day one. However, as Kaye Whiteman stresses in his book, the first years of Ecobank, and particularly its expansion into the rest of West Africa, was hardly plain sailing. Within three years, it had branches in Côte d’Ivoire, Nigeria, Benin and Ghana as well as Togo.

But there were problems partly due to difficulties arising from the structural and financial relationship between ETI, headquartered in Lome, and its subsidiaries, And the unpredictable political developments in West Africa also had a bearing.

But the vision refused to die, and by the time Kolapo’s father, Chief Lawson became the chairman of the Group in 1991, the bank was still struggling. The breakthrough came when the shareholders agreed to write off the losses against the capital of the bank in 1995. By the end of that decade, the bank was even making healthy profits and able to pay dividends to its shareholders – from 1996 onwards.

This ushered in a period of growth, and a shift of emphasis that created a more vibrant retail banking division, moving it away from being a specialist trade finance merchant bank, and taking financial services to the people of West Africa.

In 1996, Arnold Ekpe was appointed Ecobank’s chief executive, lured away from Citibank. Ekpe steered the West African expansion process, opening branches in Burkina Faso, Mali, Guinea, Liberia, Niger and Senegal, and also helping to secure investment funding, such as from Prince Alwaweed of Saudi Arabia, the World Bank’s International Finance Corporation (IFC), and the West Africa Growth Fund.

Ekpe, however, left the bank in 2000, by which time Ecobank had branches in a dozen West African countries (including Cameroon). Ecobank’s assets had for the first time crossed the $1bn threshold.

With Ekpe gone, there came a period known at the bank as “the era of consolidation”. But not everyone was content with this situation. Kolapo Lawson recalls that the Ecobank team was really not going to go out of their way to do anything fantastic, “and to my surprise one day Mr Djondo called me out of the blue and said ‘this bank isn’t going anywhere, why can’t we get Arnold [Ekpe] back?’

“I said, ‘well he left because he quarrelled with you’, but Djondo said ‘no, let’s forget the past, go and talk to Arnold, let’s see if he can come back’.
“I have always been quite close to Arnold because we went to the same school. I had known him long before he joined Ecobank. So I talked to him, and he said he would consider it, but he wasn’t too sure.
“Surprisingly, it was the women, my wife and his wife, who persuaded him. They met at a social function and they talked. My wife came home and said ‘Arnold has agreed to join’. The next day we spoke and he said ‘yes, I will come back’.
“So when he came back to become our chief executive for a second time, there were still only 12 countries. He then made a presentation that really went beyond the regional vision and proposed Ecobank’s pan-African vision. And that’s a strategy we’ve been pursuing ever since.

“After we covered 15 countries, there was an opportunity in what we call ‘Middle Africa’, so Arnold presented a document to the board during a strategy retreat in Accra, Ghana. It said basically: ‘There is an open market, nobody has taken it, and we think Ecobank should go for it. There was a lot of debate … was it too risky … was it too soon? But we finally decided to go for Middle Africa.”

After Ekpe returned, he pursued the pan-African vision with relentless energy.  Now, across Middle Africa (a term that Ekpe coined, defined as “Africa south of the Sahara and north of South Africa”), the continent’s largest banking footprint belongs to Ecobank.

The bank’s success, according to Ekpe, was primarily because the founding fathers, Chief Lawson among them, had a very powerful vision. “They set out from day one to build a regional bank,” Ekpe recounts, adding that Ecobank was subject to the discipline of the private sector: “Many other pan-African initiatives were public sector initiatives with all the weaknesses that go with that,” he adds.

Kolapo Lawson, though, adds a note of caution in his forecast of the bank’s fortunes. “There are still some huge challenges ahead,” he warns. “Yes, we have this very large geographical footprint but it comes with its own challenges because central banks are now beginning to ask for much higher minimum capital requirements, so we’re having to invest a lot more.

“And there are also countries where we would like to be – Angola, Mozambique, Ethiopia and South Sudan. And all these ventures are going to require capital.

When the issue of competition was raised, Kolapo Lawson remained cautious but stressed the early mover advantage Ecobank had. Nigerian banks were now somewhat hampered because the country’s central bank had come up with a new law requiring local banks which want to expand abroad, to raise the capital outside the country.

“That factor,” he says, “will slow down Nigerian banks somewhat, but then you also have the South African banks and the international groups like Barclays. But so long as the African economy continues to grow at 7, 8, or 9 per cent, then there will be no problem. There is space for everyone.”
Last year saw the retirement of Ekpe. When asked if he was happy about the way that had gone, Kolapo Lawson said Thierry Tanoh, the new chief executive, was an ideal replacement for Ekpe.

This writer fully agrees with Kolapo in this regard. Last summer, shortly after his appointment was announced, Tanoh told me that at the IFC where he had served as vice-president for Africa, he decentralised the management architecture, which led to the IFC’s management on the ground in Africa beginning to have more self-belief.

 “This,” Tanoh explained, “triggered the IFC’s Africa team to believe that everything is possible, as opposed to the ethos 10 years previously.” That seems an ideal philosophy to take to Ecobank, so as to build on what the visionary generations of Chief Lawson and his son, Kolapo, have achieved.

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New African

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