Kolapo Lawson, the chairman of Ecobank Transnational (ETI), is one of Africa’s most successful and influential businessmen. His father, Chief Adeyemi Lawson, was a Queen’s Counsel before becoming one of Nigeria’s first major industrialists. Chief Lawson is possibly best remembered as one of the driving forces behind Ecobank. More than just a bank, the rationale behind this most African of institutions was to play a unifying role between French- and English-speaking West Africa. Kolapo Lawson, appointed chairman of ETI in 2009 following the sudden and unexpected death of Mande Sidibe, had been a non-executive member of the board since 1993.
Kolapo Lawson is chairman and chief executive of Lawson Corporation, a diversified industrial and trading group with operations in West Africa and the UK. He is also the chairman of Acorn Petroleum Plc and Agbara Estates Limited, vice-chairman Vitamalt Plc, as well as a director of three publicly quoted companies: Beta Glass PIc, Pharma-Deko PIc and Sovereign Trust Insurance Plc. He was a director of Ecobank Nigeria from 1989 to 1997 and of Ecobank Togo from 1990 to 1993. In this interview with African Business editor Anver Versi, Lawson recalls his early student days, the founding of Ecobank and the development of his business empire.
African Business: What was your childhood like?
Kolapo Lawson: I had a very strict father, but that was somewhat balanced by a very loving mother. Our old man would insist we spend all our time studying. I was one of seven children but the only boy (six girls) so you can say I was spoilt as a baby. Overall, a very happy childhood growing up.
I was born in Lagos, Nigeria. When I was eleven and a half, in 1962, I went to Kings College, Lagos, which was at the time the top school in the country. When I was 16, I left for England and entered a public school, Bryanston School in Dorset.
What was your experience there?
I enjoyed it. It was a bit Spartan. In the old days, boarding schools in England were very traditional. We were woken up at six o’clock and no matter what the weather, you had to go for a walk around the grounds – winter, summer, rain, sunshine.It was a boys’ school then – but I believe today it’s now mixed – out in the countryside in 500 acres of grounds, so it was a very secluded environment and it was fun. I did my A levels there and from there I went to the London School of Economics and Political Science.
How was the transition from Lagos to London?
Surprisingly it wasn’t difficult because in those days there was a very strong link between the UK and Nigeria.
Nigeria was a British colony until October 1960, and up to that time, every Nigerian was a British subject. After independence, that environment persisted for a while, you still felt that you were part of the UK.
The educational systems were exactly the same, so coming from a Nigerian school like Kings College into an English school like Bryanston wasn’t a transition at all. We learnt the same things, had the same traditions so there was very little that was strange when I came to England – except for the weather!
How did you spend your exeats in the UK?
My father’s cousin, Mr Aderin, had been in the UK since the 1950s. He came to study, qualified as an architect, married this German lady and stayed in England.
So I spent all my exeats with them, went on holidays with them and because of his German wife I began to take an interest in the German language, which I later learnt, so today I’m fluent in German as well – in addition to English, French and my own language of course.
At Bryanston at the time there were only two Africans, just myself and a Ghanaian chap but we never felt any racism.
Back in Nigeria, your father was carving out an important niche for himself as an industrialist. What were your impressions?
My father went through different occupations. First he focused on his legal practice and he was one of the last Nigerians to remain a Queen’s Counsel. After independence, in 1960, Nigerian lawyers were still nominated as Queen’s Counsel from the English bench until 1963 when Nigeria became a full republic.
He focused on his legal practice and built it up. At that time we were mainly involved with lawyers and politicians, because in those days lawyers were also very interested in politics. My father was a politician and a lawyer from about the time I was born until 1963, and he did things very dramatically.
He went into politics because his father, my grandfather, wanted to stand for a certain post, I think in local government, but there was some sort of conflict of interest which I no longer remember. So they suggested that his son stand in his place.
My father, who was only 26 or 27, won the election and became the youngest ever chairman of the Lagos City Council. Then in 1963 an opportunity came for him to go into business. He was advising a local brewing group in their negotiations with the Western Nigeria state government. He was asked to broker. He succeeded in bringing the two parties together, but on the condition that he was the majority shareholder.
The deal was signed in 1962 and West African Breweries was opened in 1964. It was the first Nigerian-owned brewery in the country. He was thus the first Nigerian to establish a brewery. He just closed his legal practice and focused on the brewery.
That’s a big jump?
From the law to industry, yes. Because that was the sort of person he was, once he decided this was what he wanted to do, he would focus on it and just drop everything else.
You appear to have been influenced by your father. Are your children following your footsteps?
They are all interested in business in one way or the other but I feel and they should a chance to build up their own experience working outside first.
The only person who’s working directly with me today is my daughter. My wife and I have six children, one girl and five boys. My daughter is effectively group financial controller of the Lawson Corporation but with a wider remit. Sometimes she’s tempted to try and tell me what to do; I sometimes humour her.
What is your main line of business?
We’re still running the brewery but we no longer make alcoholic products, we make malt drinks called Isomalt; and we are into real estate in a very big way. Again, my father started that line. Everybody thought he was mad because he didn’t start by trying to construct a building, he started by trying to build a town!
We’ve been working on that for the last 25 years and we’ve managed to build this unique place called the Agbara Estate. It’s about 30 kilometres outside Lagos on 454 hectares of land. It’s so big that the work will continue for another 30 years.
We have the biggest and best managed industrial estate in Nigeria I would say. All the big manufacturers, Nestlé, Unilever, GlaxoSmithKline, Procter & Gamble, are there. The idea was to create an industrial environmental that brings employment. Once people are employed, you then have a demand for other things like housing, shops, social amenities and so on.
We built that industrial estate and on the back of it, we’ve built a residential estate which today has about 780 families living there. My father started the venture but I took over in 1993 because it had been growing and it continues to grow.
How do you overcome the challenges, for example, the power challenges, which are a big issue?
Actually, power is the only challenge we haven’t yet overcome, we’ve done everything else, we’ve put in the roads, we’ve put in sewerage systems, we’ve put in water, traffic management systems, everything, but we haven’t got an independent power plant. That’s our next big project. At the moment, all the industries have their own backup power and we’ve estimated that there’s already a demand for about 50 megawatts on the estates. We’ve got a licence to build a 100-megawatt power station and, as we speak, our people are working on that project.
People say that you’ve got to look after your whole supply chain to succeed?
We’re putting in a huge investment, $250m in the first place. Procter and Gamble, for example, did research, went all around southern Nigeria and they came to us because we are offering the complete package.
We think that the model has worked so well that we now are looking for opportunities to replicate it.
We have acquired a very large land bank, not too far from Abuja, over 1,000 hectares and we are looking in other countries to see if we can do the same.
How much of the capacity has been utilised so far?
Agbara is full now. We have about 20 hectares left but that’s going for residential developments; we’re building 1,000 homes, apartments mainly.
Phase 1 housing was mainly for fairly well-to-do people, managers, directors of companies, retired people who have a lot of money but we want to move down the scale, targeting middle management people who can get mortgages and buy an apartment or a small house.
What happened after you completed your studies at the LSE ,and can you recount how the concept of Ecobank came about?
I qualified in 1975 and worked with Coopers & Lybrand in Nigeria for three years before my father asked me to join him. One day he just walked into my office and said that the West African Chamber of Commerce Council was coming for a meeting in Lagos in two weeks.
The idea of a West African Chamber of Commerce came from Chief Fajemirokun because he was travelling a lot around West Africa. Although the systems were different, the business aspirations were the same but the Anglophones and Francophones were not talking to each other. The chamber was therefore a forum that brought people together.
For the last three years, the council had been debating about creating a business that would unite everybody, because the main issue in West Africa generally was this distrust between the English-speaking and the French-speaking people.
It was felt that the only way to begin to break down the barriers was to work on a joint project. They had all sorts of ideas but my father, who had succeeded Chief Fajemirokun as president, felt that all the ideas put forward were just examples of small thinking. He wanted something very big that would one day become the real catalyst for unity.
He told me, “I think we should start a bank that will not belong to any country and 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 to set up the bank there. We want a country that will give us international status, freedom of movement of capital and no taxes.
“We will set the authorised capital at $100m (which in 1982 was a lot of money), and we will create the bank that all Africans can be proud of. That’s my idea,” my father told me. “You are the chartered accountant, go and do some research and write a paper.”
Were you were involved in the actual formation of the bank ?
Yes, after the first meeting we set up two committees, one was the technical committee to develop the idea with consultants and the other was to be a contact committee to begin to sensitise the heads of state and the people in the various chambers of commerce and to gain their support.
I was a member of that technical committee. We raised the first half a million dollars through Eco promotions, commissioned and presented that feasibility study on the basis of which the bank was formed.
The contact people went from country to country, meeting people, heads of state and top officials. The person who first grasped the idea fully was President Eyadema of Togo. He thought it was a wonderful idea and felt that if he offered to set up the headquarters of the institution, it would also 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 and so the Ecobank headquarters agreement is actually an act of the Togolese parliament until today.
Where would you position Ecobank today?
It’s still very much work in progress. There are still some huge challenges ahead. 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. We’re having to invest a lot more, especially in East Africa and Zambia and Zimbabwe. There are also countries where we would like to be but which are not yet open; we would like to be in Angola, Mozambique, Ethiopia, South Sudan.
All this is going to require quite a bit of capital so I can see that our capital-raising efforts will have to continue. Of course, everybody now sees this pan-African opportunity and they all want to jump on the bandwagon so the competition is beginning to show its hand.
We have the big Nigerian banks – who are now handicapped, because if they want to expand abroad, they have to raise the capital outside. This will slow those banks down a little bit but then you also have the South African banks and you have international groups like Barclays. We see increasing competition, but as long as the African economy is expected to grow at 7-9%, I don’t think there’ll be a problem.
From the outset you had a regional vision but when did the idea of a pan-African entity come about?
The original founders had a vision of covering the 15 Ecowas countries but we found that after we covered the 15 countries, there was an opportunity in what we call middle Africa. CEO Arnold Ekpe presented a strategy document to the board circa 2004 and he made a case that there was an open market, nobody had taken it. There was a debate – was it too risky, was it too soon – but we got the backing, let’s go for middle Africa.
We didn’t try to compete in North Africa and we didn’t try to compete in South Africa, but everything in the middle we wanted to try and paint blue. That was the beginning of a rapid expansion.
Arnold Ekpe has now retired from his position as CEO. Has the handover to his successor, Thierry Tanoh, been smooth?
Definitely. We’ve been very lucky. We’ve been lucky in the personalities of the two gentlemen and others linked to Ecobank. For seven years, Arnold has lived and breathed Ecobank day and night, so for him to pull away from it has obviously been very difficult, but he’s done it in a very admirable way.
And we had the idea that the two gentlemen should work together for three months. Thierry came in July, Arnold worked with him until October and then went on his leave and during the three months they got to know each other so by the time Arnold left it was as if nothing had changed. There is no break, there’s no gap.
What do you see as the biggest threat to your group?
I think the biggest threat would be from regulatory authorities in the field of being systemic to the African banking scene. In many countries, we’re in the top three but as we begin to be in the top three in more and more countries, I think there is a risk that central banks will then begin to look at Ecobank as being systemic to the whole African economy.
This means that if Ecobank fails, it will have a profound impact on the economy. It’s very important for us to keep the regulators informed and we invite them to carry out all audits and inspections. It is very, very important that we become as open and transparent as possible with these authorities because they are already asking Ecobank is not too big, too influential, is it systemic?
With the benefit of hindsight is there anything Ecobank might have done differently?
What could we have done that’s different? I don’t want to sound immodest but I can’t think of anything.
So where do you see Ecobank in the next 10 years?
We would like to cover the whole of Africa. It depends on how the economies do. We think, touch wood, if things go well in a couple of years, we’ll be turning annual profits of over a billion dollars and if you are making over a billion dollars a year there’s a lot you can do.
What is your primary function as chairman of ETI?
My primary function is to hold the board together and also to try and understand in broad terms the threats and the opportunities for the bank, which means that I must understand at all times what the CEO is thinking. I try not to get involved in day-to-day matters because that’s the worst thing you can do, interfere with management, and if things go wrong, they say that’s because you interfered that this happened.
We just want to finish off with a few very short questions. What’s the last book you read?
The last book I read was Tim Harford’s The Undercover Economist. The one I read before that was The Black Swan, by Nassim Taleb.
Who are your mentors?
My mentor in life is the author of the book called In The Light of Truth, which is called the Grail message. It was also the inspiration for my late father. The author is Abdrushin. He was German and wrote between the two world wars. The book has made a huge difference to the way one sees life