Access Bank CEO: Why we are investing in other African countries

Roosevelt Ogbonna, the chief executive officer (CEO) of Access Bank, says the bank will continue to invest in other African economies as part of its growth strategy.

Ogbonna spoke during a media parley on Monday, where he reiterated Access Bank’s five-year strategy, which includes an investment phase, which holds from 2023 to 2025, a consolidation phase that runs from 2025 to 2026, and an optimisation phase, which starts in 2027.

Speaking on the company’s investment drive, Ogbonna said money can be made in Southern Africa, East Africa, and North Africa because of a number of favourable variables.

He said Access Bank is expanding to other African markets where the return on equity is strong.

“Now, if you take Africa as a continent and you split it into five zones, Nigeria and West Africa is number four out of five from the retailers’ perspective,” Ogbonna said.

“In today’s terms, I suspect Central Africa might have a richer banking pool than West Africa.”

‘COST OF RAISING CAPITAL IN INTERNATIONAL MARKET NEEDS TO DROP’

Ogbonna raised concern over the cost of raising capital in the international market.

He said the interest on capital raised by African companies in the international market is more than what is demanded from their foreign counterparts — even when there is no history of default.

“And we also want to ensure that the delta between how much you raise capital internationally drops. So let me give you the argument we’ve made with the rating agencies time and time over,” he said.

“JP Morgan goes to the market — now forget the disruption we have, dislocations we have in the market today — in settled times, they’ll go to the market and raise $2 million and they’ll raise it at 3 or 4 percent.

“I go to the market and I’m raising $500 million, I raise it at 9 percent. The question is, that delta of almost 600 basis points, what’s the justification? I’ve never defaulted. I’m a repeat issuer in the market.

“I’m an issuing paper in the international market from 2007. So it’s a 17-year track record of zero defaults. Why should I have to pay 600 basis points premium? I can understand.

“You did a good job of changing the narrative in terms of how the continent is viewed, from the risk perspective. Being in those global markets, having an operation and presence in those global markets, earning income in those global markets enables us to force the issue.

“We can reduce the cost of doing business and the benefit ultimately, we pass on to the market.”

Also, Ogbonna said there is no cause for concern if foreign banks exit Africa, as it produces an opportunity for African financial institutions to take over the vacant market.

The CEO said Access Bank plans to ensure the continent is never financially disintegrated.

“So Citi, Standard Chartered, BNP, SG, say they’re leaving the continent, we suffer nothing because life just goes on,” he said.

“You now have an African banking in those global markets understanding how the continent works and is able to support the continent to deliver.”

He said by 2025, Access Bank will be in the top 10 banks across its markets in Africa, excluding Kenya and South Africa.

However, Ogbonna said Access Bank will try to break into the top 10 in Kenya but the South African market might be impossible except the acceptance level of the Nigerian business changes in the country.