In this exclusive interview with Punch, Jimoh Ibrahim talks childhood poverty, how he made his first millions, business failure, critics and his political ambitions.
You’ve done well for yourself. Were you born with a silver spoon?
I must tell you that it’s far from it. My father is a bricklayer, with seven wives as of the time I counted last and well over 40 children. And my mother, leading the team, has six children. We are from Igbotako in Ondo State. There was no way we would have been born with silver spoon in our mouths. Development at a young age was very terrible; terrible in the sense that all the children assembled and ate together, at least from their mother’s side. You put the food at the centre of the table, everybody ate, and the most interesting aspect of it was when we were going to share the fish or meat. The eldest had to pick the meat, cut it with his teeth, suck the juice out of it and pass it to the next person. That person will cut it until it gets to the last person. The last person might get something as little as an ant and that was how it was being shared. It was a very horrible life. When we wanted to sleep at night, we had to sleep across so that a mat could take seven people. A lot of things you’ll learn from that. You may not likely misbehave when you get to this level because you’ll keep remembering the yesterday and you know how everything started. If you have the opportunity to ride a car, you will ride the car very well.
What was your childhood dream?
I was very stubborn about success; I was very determined. I was stubbornly determined that I must succeed. And there is a saying that there is a circular flow of poverty and you have to break it. I was strongly determined that I must break this cycle of poverty.
Was there any age target you set for yourself to attain success?
I didn’t have any doubt; nothing came to me as a surprise. You need to see how determined I was when I was in the village. My father is a bricklayer and I learnt bricklaying from him. I used to take up contracts to build kitchens, even in my secondary school days. I had enough money to pay for my General Certificate Examination without anybody’s assistance. You had to take the GCE in class four before the West Africa School Certificate and I made some credits before sitting for WASC, and WASC was just a walkover for some of us. Beyond that, we used to go to a cocoa farmer and assist him to cut cocoa puddings in the morning before going for classes.
Is it true that you started business when you were at the University of Ife as a student?
I started when I was in the secondary school. When I was in Ife, I expanded. I already started Inter-Faculty Law Journal. I started having conferences for judges as a student of the university. I started having a published journal where lecturers published their articles. While I was at Ife, I bought my first car — Volkswagen Beetle — for N7, 600. When I did a seminar on local government laws, for instance, people participated. When we got money from there, we floated the journal and people brought articles for publication and we also sold it. We printed four volumes. People like Justice Teslim Elias of blessed memory had an article published in the first edition of my journal, when I was in part three as a law student.
When did you make your first million?
The first one million — physical cash — came in after I had graduated; it was during my service year around 1991/1992. I left Ife in 1990 and I was called to the bar in 1991. 1992 was my service year and I was already in millions. I had already made between four and six million naira. It was in my service year that I built my house in the village (Igbotako); it was in my service year that I built four houses in Egbe in Lagos; it was in my service year I started the four-storey building in Idimu, which I completed. I was conducting seminars on public service because when I went to the library, I found out that I could see the State and Federal Government laws but I couldn’t find the local government laws. So, I organised the first national workshop on local government laws and I invited all officers in the local governments. We have about 744 local governments and we asked for four officials from each of the local governments and we charged N5,000 per participant. If eventually we had about 800 people who participated, that gave us about N4m. If we used about N2m to do the seminar, we still have a profit of N2m. In that very year, we had about 16 local government seminars.
Did you ever work for government at any level?
Not really except that when we were running a seminar at a time, I did a proposal to government on the collection of taxes in the oil industry because we saw that we needed to do a seminar on tax compliance and we were appointed as a consultant. It was a consultancy thing and we raked in a lot of money for government at that time. We did that very successfully. While I was doing that, a friend of mine was appointed military administrator of Bayelsa State — Navy Capt. Oladipo Ayeni — who also invited me to be his Special Adviser but regrettably, the government lasted less than 90 days. He was sick after about 45 days in office. Before then, I had already left because I had to continue with the oil tax consultation. So, my staying there was less than 45 days. A lecturer from Ife was already appointed to be my successor in office.
President Umaru Yar’Adua appointed me as Chairman of Corporate Affairs Commission again on a part-time basis. I also consulted for the International Monetary Fund on tax reforms in Croatia and Lithuania when I was in Harvard as a tax student in 1989.
With your knowledge of the workings of business, did you ever think that you needed to be in Harvard?
But for the grace of God and Harvard, I would not have been successful. When I finished the tax job, I went to a world conference on tax in New York and from there I said, “Yes I got this consultancy job but I need to improve myself on taxation.” And because I had advocated in my thesis in Harvard that the Federal Government should convert the Federal Inland Revenue Service into a full-fledged ministry and appoint a minister of revenue and that was well received. It was in Harvard that I knew about case studies and I can tell you without mincing words that a lot of our businesses have been built on case studies.
Many have described you as “Mr. Turnaround” but your critics have argued that some of your businesses are not doing well. How do you draw the line between the two?
In business, I don’t look at critics. Regrettably — I must apologise — I don’t consider critics at all. That is not the reason why I went into business. If you are not controversial, you will not be successful. Give me 10 people that are not controversial and let me see whether they are successful or not. The more controversial you are, the more you are likely to be successful. Coming to turnaround, which is the first leg of the question, it is not in doubt that we’ve been involved in many turnarounds in this country. I got a letter from the London School of Economics asking me to allow some students to understudy some of my turnarounds. When we took over NICON Insurance, it was in N26bn pension fund debt. As I am talking today, the pension we owe is less than N6bn. How did we do the magic in four years? That is about turnaround. Take the hotel in Abuja (Le Meridien Hotel): There was a government circular when we took over the hotel that no government function should hold there and no government official should go to that hotel because big reptiles were there. We had to consult a biological garden, which brought snake powder to the car park at night, and when the snakes inhaled this powder, they came out of their hiding, became powerless and they were captured and taken away.
Today, presidents, senators, governors go there to have their meetings. Now come to the media industry. Is this the National Mirror (raising a copy of the paper) you saw five years ago? Is that not a turnaround?Newswatch has been in existence for 28 years; nobody ever thought of having a newspaper out of it. Today, it comes out daily. Is that not a good turnaround?
Take Air Nigeria. We bought Air Nigeria from Richard Branson. The company owed about $300m in debt; we bought it with two aircraft, one was flying while the other had been at an airport for six months. We moved it to 13 aircraft. What kind of turnaround do you expect apart from that? When you turn around a company, it does not mean the company will continue to be in existence for ever. You can turn around and sell. To say that critics will not criticise you when you’re acquiring companies and turning them around, I think it will be the least expected.
But Air Nigeria was not sold. What about the issue raised by the Senate bordering on diversion of intervention funds meant for the airline? Some senior managers in the airline also raised the alarm over illegal deductions.
Do you think the country’s security system is so mad that somebody will carry intervention funds and will still running round the streets? The issue is that Air Nigeria collected N35bn from the intervention fund to be used to wipe off the existing debt of Air Nigeria. That same day, the loan was used by the bank to wipe off the debt. In order words, nobody disbursed one naira to me. Are you saying that we don’t have a central bank in Nigeria which will see movement of the money and will not confirm to the appropriate investigating authorities whether the money was diverted? The truth of the matter is that no one naira was diverted and that was why we are moving freely on the streets.
So, what is the Senate saying?
I am not in the Senate. The Senate didn’t mention my name, so I have no reasons to attack the Senate. What the Senate said was that the intervention fund that was given to Air Nigeria by United Bank for Africa should be recovered from Air Nigeria through UBA. So, what is my business about that? I am neither UBA nor Air Nigeria; I am Jimoh Ibrahim. When you granted the N35bn as an intervention fund, you gave an instruction that the fund should not be disbursed in cash to the customer; it should be used to clear the existing debt. What is the offence of UBA then? The UBA knew that there was N35bn debt, UBA applied to Central Bank of Nigeria and Bank of Industry to collect N35bn to wipe off the debt. The debt was not created by Jimoh Ibrahim; it was created during the days of Richard Branson. Why are you now calling on Jimoh Ibrahim; what has he got to do with it? I published a letter in which UBA said the fund was not diverted and that it was used to pay the existing loan of Air Nigeria which was the purpose for which it was created.
In the said advertorial, you inferred that some people wanted to create a merger of Air Nigeria and some other airlines and you threatened that you will not be part of it. Who are these people?
The government is the people.
Did government tell you that?
They confessed to Nigerians that they wanted to have a national airline and they wanted the airlines to merge. I don’t have problems with government having a policy to merge airlines; it’s a fantastic policy. But it is not a compulsory or compelling policy; you cannot say everybody must compulsorily go in there.
What is the future of Air Nigeria today?
The future of Air Nigeria is that it will fly. When we shut down, we said we shut down for one year. We are just in the fifth month; it’s not too long; we shut down on September 16, 2012. We still have about seven months into the one-year promise. Within the one year, Air Nigeria will fly again. It may fly as a merged company; if that happens, Jimoh Ibrahim will not be part of that arrangement. That means Jimoh must have disinvested. If that does not happen and it flies solo, that means Jimoh Ibrahim had been allowed to fly solo without being any part of any merger.
Some of your staff allege that deductions were made from their salaries supposedly to be saved in their accounts with the organisation’s cooperative society but the funds were not remitted. What is the situation now?
That is not an issue. I am not the management of Air Nigeria and I think they went to court on the issue you’re talking about. What happened to their case? It was thrown out. If you have your money in the cooperative society, am I part of the cooperative society? Why should that become a Jimoh Ibrahim issue? The accountant whose duty was to deduct money was a member of the society. Why was he not deducting it? If he deducted it, why did he keep it? I run 16 companies. How will I know the cooperative society of every company, what they do and how they do it? A cooperative society is working outside the corporation. We have only 49 per cent of the shares of that airline, we still have 51 per cent belonging to other people who are not Jimoh Ibrahim and you are not mentioning their names.
Some directors of Newswatch have alleged that, as a lawyer, you took over the company by deceit, using your legal skill. They accused you of taking unilateral decisions because you hold 51 per cent stake of the organisation. What is your response to the allegation?
I won’t be able to talk about Newswatch issue, regrettably, because it’s in court. And as a lawyer, I respect the judiciary. But two significant events have happened which will probably give you an answer. One, some people have gone to court to ask for an interim order to restrict the paper from publishing; they lost. The second stage of that was an interlocutory injunction; the court said no and they lost. The last stage is the perpetual order. I only made these comments fair enough because the court had given rulings on those orders. When the court finishes with the final judgment, I can make comments on the position of the court.
You won the bid for African Petroleum and due to an issue you pulled out about 170 filling stations from the company. However, the filling stations are no more dispensing fuel. What is the problem?
It is a business strategy. One, you talked about AP; it is not every bid you win. I blame no one if we have paid for AP and the handing over was not done, that was okay. But we are the owners of the 170 stations you talked about. We pulled them out of AP, meaning that we wanted to have our brand. It got to a stage that we had to introduce our brand to the market. We branded them Energy and the next issue was supply. Supply was coming from AP, later we got our supply from ENI oil company because its petroleum products were deregulated.
I’ll tell you about an interesting scenario. If we were desperately supplying products to those stations by all means, we’d be a member of the cabal; that would be the headline of newspapers. We have developed a business concept whereby we go into retailing; all the 210 stations will go to dealers. This goes with our vision of creating employment. We had 960 people that bid for 210 and virtually about 600 of them were qualified. We’re selecting just 210 out of the 600.
Under the terms of the licensee, they will run the stations, get fuels in them, maintain the brand, employ their people and make their profit and loss; they will not refer to the head office here for anything. They will run each as a business unit. Any rent we have collected from them will be used to buy more stations and brand them Energy until the time when we have a suitable depot that can supply them Premium Motor Spirit (petrol).
The Senate Ad hoc Committee on Investigation of the Bureau of Public Enterprise alleged that there were irregularities in the sale of NICON Insurance, which you acquired…
(Cuts in) That is not true. What they wrote in their report was that government should recover from NICON, N500m deposit for shares. When we bought NICON Insurance, the amount you needed to do insurance business in Nigeria was N300m. After the sale, government increased the capital base of NICON Insurance to N5bn. Every shareholder had to contribute to meet up with the new capital requirement. Government still maintained 30 per cent share of the company when they sold it to us. It dawned on the government to pay 30 per cent of the N5bn but they said they won’t pay because they had N900m deposit for shares. The government shares were upgraded to the amount of money they deposited.
The Senate ad hoc committee said “recover the money for shares.” We were ready to give them a cheque the next day, if they wanted to implement it. The implication is very simple: government will own no shares again in NICON and if you move from N300m to N5bn and you didn’t contribute anything, it means that the government would not have anything. But today, government still has about 10 per cent or more in NICON; they can still sell that to the public and still make much more money than how much they made when they sold NICON itself because of the new balance sheet NICON now carries.
You said if one must be successful in life, one must be controversial. Is being controversial not having a negative impact on your business and personality?
In the midst of these controversies I got the Officer of the Federal Republic; I think it’s actually improving our image. In the midst of same controversies, I got an honorary degree from my own university — (OAU); and I was the youngest in history that was ever conferred. In the midst of the controversies, I was in America last year to give a lecture to the Harvard tax students on tax future and prospects in Africa; that’s a fantastic case of controversies bringing better results. Corporate adventure is not politics; it is not political or democratic. We have over 21,000 people on employment in this building. If you have such number on employment, how do you think controversies will affect us negatively?
Nigerians should learn how to appreciate people. The aim of the controversies was to bring us down but we are too big to fall. If the government of Nigeria, today, withdraws all my businesses, I will rebuild them in few days. We are in Dubai, United States, the UK, Ghana, Sao Tome, and in this great country — Nigeria — in 10 years; a fantastic corporate effort! If we have 16 companies and one dies, we are still on ‘A’ grade. Why should the corporate surgeon be crucified for the one that died? Why don’t we ask questions about the success of the 15 which have employed 21,000 people and pay over N4bn in salaries? You think it’s a joke? It’s not a joke. We don’t owe salaries; there is no member of staff that has not received January salary in the whole group.
I love Nigeria; I have passion for this country; I believe in Nigeria. If not because of few threats here and there, I won’t locate businesses outside. But I must, because my entrepreneurial skill will be deemed to be local, if I don’t have businesses outside the country. Our investment in some countries is bigger than what we have in Nigeria.
Do you still have your eyes on the governorship of Ondo State?
When I finish with all I have to do in the corporate world, I must retire somewhere. If we have concluded that assignment (business), we should pick up the Ondo State issue you’re talking about. We should go there and run the state, and put it in a better shape. We don’t have to hide the fact that we have an ambition to be governor of Ondo State. The President knows that I have that ambition; God knows; everybody knows. By the grace of God, I will run in 2016.
Source: Punch
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