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No Profit Yet On My Investments - Jimoh Ibrahim

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Jimoh Ibrahim, chairman, Global Fleet Group, is already a household name in Nigeria not only because he is a wealthy businessman but also for his penchant for acquiring and resuscitating moribund companies. From a successful tax collector, he has risen to become chief executive of many companies sprawling across key sectors like aviation, banking, insurance, oil and gas, property and education in Nigeria, Ghana, Sao Tome and Principe, Dubai and London.  In spite of his deep involvement in boardroom politics, he also has time for partisan politics. Twice he attempted to be governor of his home state Ondo and twice he failed. A man of elephantine courage, he insists he will continue to try despite the many lies being told by politicians to swindle him of his hard earned money. In this interview with Wola Adeyemo, editorial director, Dejo Oyawale, marketing director, Sunday Adedeji, photo editor and Abiola Odutola, reporter, he discusses his major challenges in business and partisan politics. Excerpts:

The aviation minister has said that part of the challenges that airlines have in Nigeria is that they have not logged on to global standards. How do you react to that?

That is true but regrettably too, it is not easy to launch into global standards, maybe she wants to say global adventure and not global standards . If she says global standard, does she mean the aviation industry is not competent standard wise, when we look at globalisation? I don’t think she is right in that direction. Some of us are International Air Transport Association, IATA members, it will be wrong to say that one IATA member is not up to the standard of another IATA member.  On that prefix, she might not be well advised. But that the industry is not moving the way it should be, (and) people are not taking opportunities the way they should to make international runs, she may be right.
 
There was a time it was suggested that airlines should merge in Nigeria and we expect that people will take advantage of that?

It is difficult to merge because everybody has different schemes of operation and different liabilities and assets and it will be difficult to have an evaluation. For instance, Airline A acquires aircraft; it runs into a debt of $3.5 billion and probably claims to have a specific number of aircraft in its fleet. Airline B doesn’t acquire aircraft but leases aircraft; it doesn’t have that debt in his account. When you want to merge, where Aircraft A is still part of the merger, his view is that the aircraft will be purchased whereas the view of Airline B is that the aircraft should be leased. The most difficult thing to do in aviation is to lease an aircraft. The lessor is the owner of the aircraft; he wants to give it to you to operate. He must check it very well because if you crash the aircraft, you crash the lessor’s money. In a volatile country like Nigeria, no lessor will want to do business the way it is unless you have that integrity and reputation that they can trust you. To buy an aircraft is the easiest thing anyone can do. Once you have money, the aircraft can be delivered to you anywhere in the world.
 
A number of insurance companies appear to have taken up the job of underwriting government insurance. How does this affect the fortunes of NICON?

I see NICON making income. I want a NICON that makes 70 per cent of our net income from investment activities and 30 per cent from insurance because we know that the cost of underwriting is very expensive and the cost of insuring is also very expensive. The PR, the trouble and the claims are very expensive too. The fact remains that it is not profitable. I don’t go into business to make losses particularly losses that you can see.
 
Doing an appraisal of the companies you bought, which of them will you say gives you return on your investment?

The fact is that I have not seen any return on any of them. We have not declared any dividend. Let’s take Air Nigeria for instance: we met $273 million as debt. We had to pay up this debt before we talk of profit. We met two aircraft on ground and now we have 13.  In NICON, we met N26 billion in liability, we paid N13 billion and government didn’t give us anything, yet we have to pay the remaining debt. We have to pay from the income. Beyond this, we have Re-Insurance money of over N1 billion that we met. We have to pay everything including claims. In fact government was lucky that it got someone who was able to buy NICON. And it is enough to pull down the Federal Reserves. God forbid, you have an aircraft, if there are 120 passengers; each of them gets $100 thousand under the rules.  You can multiply it by 150 and add to the cost of the plane.
 
But you keep on buying yet you don’t make profit?

I am a young man; this is the stage for me to do investment and not the stage to enjoy investment. I guess I will enjoy investment by four to five years time. People call me billionaire, I agree with them but I will be richer in about 10 years time when my investments have extinguished their liabilities and all incomes are mine. I am only using my youthful period to invest. I have not reached the stage but I will soon reach the stage.
 
You had earlier said that Nigeria had no hangar in any of its airports. With the way you operate, are you thinking of building one in collaboration with some private interests?

If the federal government grants approval to build hangar, we will. Four years back, we wrote to the government to give us land to build hangar that can take 10 planes, they have not replied till now. We have the opportunity to get loans from Exim Bank but we need an area to invest the money. It takes me not more than 15 days to get money from such banks but we must have where we want to invest and if Nigerian government does not encourage us, how do we invest. I am worried that we have 70 to100 planes flying in Nigeria without a hangar. I think it’s a safety issue.
 
Last year, you inaugurated Energy Bank in Ghana, we wonder why it didn’t take off in Nigeria?

The feeling was that I would retire soon. And one thing that kills conglomerates is funding. I feel if I leave they may run into funding problem. And if they don’t have money, they will begin to die and you might think the owner has failed. I told them if they need fund, they should go to the bank and if they can’t grant them the loan, they will link them up with their sister institution. Energy Bank has contributed to the growth of Air Nigeria within one year we started.
 
Why didn’t it take off from Nigeria?

Why should it take off in Nigeria? It’s a global business. I didn’t believe in the Nigeria’s financial policy as at the time I started Energy Bank. Tomorrow if I believe in what [Lamido] Sanusi (CBN governor) is doing, I can call him and ask for licence to bring it here. At the time we started, Ghana was the best place.  One of the reasons the (aircraft) lessors are supporting us is because they know we have a bank in the group and as a matter of fact, if it is lease payment, the bank can pay on our behalf and we will pay the bank back. We cannot over-borrow from them; we can only borrow according to the law of Ghana as it permits. The advantage of such bank cannot be over-emphasised. I believe after me, the new set of managers will have two problems, which are human resources and finance. Human resources, they can solve easily but finance can be critical and I don’t want anybody to disturb me in my retirement.
 
We look at the business empire over which you preside and look at what had happened to the businessmen that had been in charge but are no more.  What are the structures you are putting on ground to ensure that if God says tomorrow you have served enough… (Cuts in)

God cannot say tomorrow except I want to retire. The structure here is formidable. It means the system is running. Unlike other airlines, my son is not on board of directors; my wife is not on board too. No other Jimoh is on board. My wife is a chartered accountant, she would have been the director of finance but I don’t allow that, it’s part of my principle. If she is not on board, the reason is simple. It is to allow staff to have a free flow to work. We set up a formidable structure here and my colleagues are better than me. If I come to work, it’s because I am selfish otherwise what I am coming to do here can be done by someone else.
 
The Dubai hotel was supposed to have opened by February?

It will open by December or early next year. We are still working on the furniture. I have been investing in Dubai since the day I started investing in Nigeria. It didn’t occur to me then that I could look at hotel industry because Dubai is a tourist attraction.
 
Looking at your diversification plan, it appears it’s going regional and international; from Nigeria to Sao Tome to Ghana to Dubai and London. Where is your next stop?

We have a programme that between now and 2015, we will be in the Middle East; in London, Europe and Hungary.  [From] 2015 to 2020 we plan to be in Canada and Russia. By then we would have been all over the whole continent. Any of the conglomerates can invest in the master plan.
 
Is there any room for further expansion?

No. Maybe when I leave, another person can still expand because I don’t want to be obsessed.
 
As a businessman and an investor how has the prevailing infrastructural decay affected your business?

It is a big problem. As you are here, they have taken light (electricity) about seven times; if you go to the next house you will see a set of generators. We have about six big problems. We hope that (the power challenge) will be solved in the next six years. Power is a very key problem.
 
Business takes more of your time yet you still have time for politics. Is it that you want to play politics with your friends and rush back to the Boardroom?

I wish when am in business I could take every five years off and go into politics to contest for an elective position and win. When you are doing politics, you learn a lot of nice lessons. You see people sitting beside you telling lies to collect money and you know they are telling lies because of the money you are giving to them, they are not using it for anything. It is incredible. It is the best way to actually enjoy one’s life. You see someone telling lies to you and you know he is telling lies, and he swears with his children on the lies. It’s incredible and amazing. I believe I should govern my state and put all these resources in the state.  I want to turn the state around in a way that is better than what it is today. The ambition is still alive. The fact that I don’t win does not mean I will stop. Abraham Lincoln contested several times and won later. If I attempt it four times, one day I will win. To those that tell lies to collect money, I will tell them it’s all lies but I will still give them (money).

Source: Tell Magazine Nigeria

Davzy folamz:
I could not read all the story but i saw something about Airlines.Let me just clear this now, We don't have capable airlines in Nigeria.They are all wack! Imagine Nigeria importing used aeroplanes to the country.

KingFemzee:
Hmmn...return of investment indeed after mismanaging Air Nigeria and diverting fund meant for the airline to other business he wants return of investment.

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