Tutu Agyare: Ghana’s Global Banker

_DSC0143Business World caught up with Tutu Agyare; arguably one of the biggest African names in investment banking at the global level, in his London Offices and had a long discussion  on his passion for Africa, entrepreneurship, agri-business and the arts.

With a name as big and influential in investments circles as Tutu Agyare carries – being the first African to trade on the floor of the London Stock Exchange – one would expect  a flamboyant character, yet the first thing that catches your attention is the simplicity and practicality of a straight talking man. For this Tutu credits his gritty Ghanaian upbringing as the underpinning pillar of his success, which also now is driving his passion for investing in Africa through his Nubuke Investments company.

Widely regarded as one of the smart, successful financial entrepreneurs to have emerged from Africa over the last couple of decades, there is no aura of conceit around the man who says he got into his profession by accident. But the business he runs today – Africa-focused assets managers, Nubuke Investments, which he founded in 2007 and of which he is a Managing Partner and the Chief Investments Officer, with a much diversified portfolio with holdings in long equity, short equity, local currency, and convertible bonds in investments in 15 different countries – is certainly no accident.

A mathematician by background, with an eternal love for the subject which he studied up to university, Agyare finished Ghana’s premier university, Legon, in 1986. Round about that time, the economy in Ghana was pretty challenged and for graduates like him, there were very few job opportunities in the country.  So he came to London and like a lot of people, took up menial jobs, tossing burgers, while looking for a real job. He applied to a number of different companies, one of which essentially was looking for people with his type of background to work in finance.

“So, not knowing much about that particular opportunity, I just decided to take it. It was a small American company. It was set up after the financial deregulation in the UK, which meant there were no restrictions on the people who got into non-traditional banking.

“It was set up by this young, brash American, looking for smart people who had mathematics backgrounds and could think on their feet and I was one of the first waves of such people who joined,” Tutu says, acknowledging that it was very much in consonance with his adventurous nature. So he spent about four months, out of the first three or four years of his career training in Chicago, and the first four years of his real career on the floor of the London Stock Exchange, trading.

He gleefully recollects tough times trading on the floor of the London Stock Exchange during the crash of 1987, and a conversation in the office about his tenacious attitude on the floor; “and I’ve always said that because of my upbringing, if anyone had issues with who I am, it’s their problem and not mine and I think that’s one of the things that has helped me, my upbringing; a very traditional Ghanaian upbringing.“

Tutu also attributes his early career success to his work environment.

“Ultimately, I was fortunate enough to work in an environment, which, to a very large extent, was colour blind. The trading environment is one where your success speaks for you and success is defined by who makes more money and not by who talks about making money.

“It is an environment where you are given a little bit of responsibility and you make the most of it, then you are given more responsibilities, and it continues, so if you continue to succeed you’re given more responsibilities; but not everybody likes that. It is a very transparent environment. So it means that if I make money this year, I’m given more responsibility to make more money next year. I can’t say I’m a good trader if I’m not making money,” Tutu explains.

He notes that it’s a different environment. Because it is so transparent, the risks are different and not everybody likes it. Some people, he believes, might prefer to sit in an office and write reports. Not him.

Tutu believes one can achieve everything that one wants to, knowing that if one has any limitation, it’s always in one’s mind.

In this regard, his confidence in the Ghanaian to achieve is almost legendary; “that’s one of the key things that helped me. You know that there’s nothing that the Ghanaian can’t achieve if they go forward or put their minds to it. There is no area or sector in the world that you put a Ghanaian and he can’t compete head to head.

“And it is because we have enough role models…taking my Dad for example, who became the  first black commercial airline pilot, under Kwame Nkrumah, and lots of others; there is no reason why when put in an environment where they have the capabilities, Ghanaians would underperform. Wherever in the world, Ghanaians are succeeding at the top of their game. We have people at the top of every human endeavour you can name including the UN, the World Bank. There are no limitations.”


That ability to properly analyse situations and identify opportunities and the determination to capitalize on those opportunities is what drives success at Nubuke, he says.

With asset class as an objective, Nubuke – which means ‘new dawn’ in the Ghanaian Ewe language – is one of a number of investment vehicles that one could look at to reach into Africa.

“We’re actually a very liquid vehicle, where if you put your investment in a private equity company, you give the company money today and you come back five to 10 years’ time looking for your return.  We don’t own things, we don’t run things; we only invest in people who do that and we’re not here to chase the wealth, we are here to deliver risk-adjusted returns to our investors,” Tutu explains.

“We are not challenged by the traditional sector because the reality of the situation is that the headline African story is one of growth; population growth of the youth, growth of what I would call normalisation of access to basic services. If you look at the proportion of banking assets growth to GDP, it’s very low. If you look at insurance products relative to GDP, even among emerging markets, Africa’s is woeful. If you look at penetration rate for mobile phone services; if you look at consumption rates for finished goods and services, we’re still very low so, really, our focus is to try not to just be invested in the traditional because they are much more correlated to the rest of the world.

“We are primarily focused on countries which have a domestic focus. We love the financial sector because we believe that sector is undervalued and, even if the rest of the world doesn’t grow, Africa’s financial sector will continue to offer opportunity,” Tutu says.

Africa and the growth story

Then also, despite some enduring risks in Africa, in the face of the entire positive headline stories, the sources of funds flowing into the continent are increasingly varied and the amounts, ever-growing.

“First and foremost, you see the corporates in their first foray into the consumer sector in Africa; we’re seeing SAB Miller and they’re putting a lot of money into Ghana; we’re seeing Dangote coming into Ghana on the cement side. We’re obviously seeing an explosion in oil and gas with all the multinationals; Schlumberger and all the big names coming into Ghana, so for the first time we’ve got the corporates coming in, because they see relative opportunities not just in Ghana, but in the entire African continent.

“IBM just opened a few centres recently. They are bringing in world class technology to Africa. Google is now regularly offering upgraded services – Google maps, Google services. We are seeing MasterCard running around the continent now, trying to become the debit card of choice. It is in cooperation with the Nigerian government in the development of a national ID,” Tutu says adding that obviously the big industrial companies would be oil companies and the mining companies, but also on the consumer side we’re now beginning to see the palm companies, such as Olam, Wilmar, and all the big Asian companies, coming into Africa and doing enormous transactions in places like Gabon.

In Nigeria, a lot of Japanese companies like Marubeni are pushing in. The power sector in Nigeria is attracting huge investors; GE, which now hopes to sell more power plants in Africa, in 2014, than in the US.The initial wave used to be the corporates, who obviously are on the ground.

This is however, not necessarily an endorsement of good policies coming out of Africa.

“You will find that corporates will only invest on the basis of opportunities and not seek to make any statement about policies. You will see good corporates in bad countries; if they can make egregious profits they’ll tolerate the economies,” Tutu says.

He observes that some people will say the Chinese don’t get involved in politics, they just look for return. And though he may not necessarily subscribe to the Chinese approach Tutu thinks the good thing about the Chinese being in Africa is that it has brought in healthy competition to Africa’s benefit.

“If you have an asset and you have more than one person looking at it, you could probably sell it for better than you have actually done in the past and, if you wanted to build a railway or a pipeline or a port, not having a Chinese bidder or Japanese or an Indian bidder and you just have a British or American bidder, you will not get what you need at the price you want it.“

One of the biggest challenges confronting Africans, however, is that of project management.

“It is one thing to have a headline deal and another thing to have a headline contract, when actually thinking through whether you’re going to get it done on-time and within budget is the biggest challenge that we have. How many of those headline projects have we started and how many of them have we finished on time and within budget?” Tutu queries.

Nubuke, being Africa-focused, has been fortunate.

“When we look at businesses, we look at businesses across the continent with willing entrepreneurs who have very simple business models, who have a very clear understanding of what they want to do, of the industry they’re in, a clear understanding of what returns they expect, and who have a low cost base. We are fortunate enough to be in touch with some of the most successful African entrepreneurs, like Aliko Dangote and Kola Karim,” Tutu says.

But his sentiments are rather strong about the combination of unemployment and the demographic time bomb, which is, half the African population being under 25years; the median age being 21.1 years

Ghana: Monaco of West Africa; and not the Singapore,”

Agayre walks his talk; he currently has significant investments in about four Ghanaian Businesses and has plans for more. Naturally he has a lot to say about the country he calls home.

The Ghanaian situation, to him, is instructive; only two million formal sector operators in Ghana reportedly pay taxes; “I mean that’s really two million people registered with SSNIT, yet 14 million people claim the right to vote, you will expect those numbers to be correlated.

“If every one of those people has a bank account, imagine what that will have on the profitability of banks, which are able to attract retail clients.”

Other investors might prefer insurance, as recent developments in Ghana have shown. “We’ve seen a whole wave of international investors into Ghana, we’ve seen Old Mutual, we’ve seen Prudential UK, and others, all investing in Ghana in the last three months, and they’re not doing it for charity; they’re doing it because they’re seeing investment opportunities.”

Ghana’s nascent industry in oil and gas has a local content law, which should benefit local businesses that meet the requirements and offer opportunity for investors to look at them, telecoms, in the country and across the continent, is exciting. Essentially new models for telecoms is not just about prepaid units for making money out of units; “it’s about the extent to which we have banking solutions and the telcos who are able to provide the seamless banking solutions to allow the banks to get access to the formal sector, which, over time – like Safaricom in Kenya is doing , where a Mr. Nobody, because of his prepaid usage, now turns it into a sort of borrowing pattern and borrows money, with all this being done in the formal sector – grows into the informal sector but,  things can be made better with a target market where the industry is focused and you have a better idea of what is going on.


“In Ghana, how are we going to stop rural/urban migration, how are we going to provide employment? There must be a reversal of the situation where everybody wants to go to university, get a degree and work in a bank. And so apart from the fact that education is important, we need to take a look at the educational system.

“We’re now in a situation where if we could build large scale agricultural businesses which are capable, we could then use them to turn large tracts of our arable land into productive use, which are presently not being utilized and provide a lot more employment for our people than we’re doing now,” Tutu says, noting that this could work well for areas where there isn’t employment and it could be done in an environmentally friendly way, as well as, in a low tech way so everybody could gain employment; and could actually provide returns for the investors.

Tutu notes that the most professional business in Ghana at the moment is agricultural business and that is cocoa.

“But though we can’t have an arrangement like the cocoa board in all other industries, we can pick one or two of the industries that we can, like the rice industry for instance.

“In pre-colonial times, our heritage where chiefs administered lands and taxed the entrepreneurs for its use is what government should be doing; that’s our heritage.

So if you want to generate employment, I don’t personally believe that’s what government should employ. I think that government should provide the incentives to people, giving tax holidays to set up businesses, like giving tax holidays when you employ more than 1,000 people. You know you can incentivize private business. If you want to provide goods and services, you’re given concessions to do so. That it is profitable for you to hire people- that is what I think should happen,” Tutu argues

“So to me, agriculture is the area that should totally lead the way. Hotels in Ghana are all importing vegetables; why can’t we grow our own vegetables. Sugar; why are we spending hundreds of millions of dollars importing sugar, with all the opportunities to grow cane sugar?

“All of these things are low tech and they can provide lots of employment. With the right incentives you can get people to move out of Accra, out to the regions to do this. Without a commercial advantage people will not do these things. They require discipline, they require long term focus, and they require cheap financing. If you have a structured incentive and people feel they can benefit from it they will change, they will continue to do that. But if the rules are not clear; not transparent and ineffective, they won’t change, that is human nature.

With regards to attracting investment inflows, Ghana has another peculiar challenge. Companies in Kenya, for instance, are growing faster because of their regional environment. Kenya has a bigger population, almost twice Ghana’s 24 million, with easier access to their regional populations as well.

“If you are an investor coming from abroad, these considerations come into play. But what if we have seamless borders and you can drive from Accra to Lagos and it doesn’t take you 12 hours and cost you so much; the cost of having the wrong number plate in the wrong country; of going from A to B, or trying to ship your goods and services. And there are also complaints about 150 million Nigerians and 24 million Ghanaians; about who is who.

“So first of all we need to have a robust identification system, without which I think it’s challenging to deal with people. Secondly it is not by just a biometric identification; it is about addresses as well. We are trying to have a system of addresses in Ghana, by street names, but this is coming with its own challenges,” he says.

Tutu, who finds tracking locations easier with a GPS based address, finds the endless debate about the street names baseless. “You can build an address system without the street names, you don’t need that. I mean do you really care what the street name is if you can’t find the person? You don’t.

“Seamless borders in West Africa, for Ghanaian businesses, will be a huge benefit, because you then get access to the much bigger Nigerian market.

“The challenge that Ghana has at the moment is that we’re in danger of becoming the Monaco of West Africa; and not the Singapore,” Tutu worries, in that very soon, “we will have a situation where every wealthy Nigerian is thinking of holidaying in Ghana; for leisure and not to do business. So you have to have a balance. What is the long term strategy of people coming here, to have fun or do business? We want them to come for business more than for leisure.”

Giving Back

Tutu’s passion about Ghana goes beyond business. Driven by his philosophy that whatsoever Ghanaians set their minds to doing, they can achieve world class success, he has set up a foundation, Nubuke Foundation, which essentially was borne out of a desire to really set something up, which will give access to all Ghanaians to their heritage.

“It’s indeed a heritage,” Tutu says, and basically focused on, “trying to collect as much, as we can, of Ghana’s past, and present,  and then try and leverage it into the future, so you can get to the foundation as a Ghanaian and learn of your past and present, to learn about your own culture and history, We’re trying to build a world class reputation to attract more and more of Ghana’s people and their works of art.”

One of Tutu’s passionate pastimes, aside golf, is reading.

“As businessmen we learn on the job; we’re always looking for solutions, for ideas. I read a lot as a result of that.”

He is quick to quote his favourite Mark Twain line; “He who does not read, has no advantage over he who cannot read.”

Nubuke Foundation organizes regular reading workshops for children, at its well-stocked reading section. It is perhaps where he hopes to find, mentor and groom other future Tutu Agyares.