Ibile Holdings: Inside LASG cash cow

Abiodun Amokomowo, Chief Executive Officer, Ibile Holdings

By AYOOLA OLAOLUWA

That Lagos State is the most prosperous state in Nigeria is no longer news. The state, apart from the modest revenue it receives monthly from the federation account, generates over N40bn monthly as Internally Generated Revenue (IGR).

But the truth remains that most Nigerians, even Lagosians are unaware of the entity largely responsible for this success story: Ibile Holdings Limited. It is the investment arm of the Lagos State Government created to spur economic growth of the state by deploying capital in commercial, viable and strategic industries that are crucial to the development of the state.

The firm is unarguably the money making machine of the state government. In fact, those in the know call it ‘Igi Owo’ (Money Tree).

The company was set up to operate a little differently from the Oodua Group of Companies, established by the former Western Region. Unlike the Odua Group which wholly own most of it businesses, Ibile Holdings, apart from entering into partnership with private investors to drive a project, also invest as minority holders in blue chips.

Just like the well-known Lagos State Internal Revenue Service (LIRS), Ibile Holdings is highly sought after by job seekers. Top politicians, traditional rulers and influential power brokers daily seek job opportunism for their wards in the establishment. According to a top civil servant in the employment of the state government, a placement in the firm is a sure guarantee of a better future for a new recruit.

The firm, which derives its name from the first letter of the five administrative divisions of the State – Ikorodu, Badagry, Ikeja, Lagos Island and Epe, is a secretive body, and its activities are known to only a select few.

Apart from its principal officers led by the Chief Executive Officer, Abiodun Amokomowo; Finance Director, Idowu Badejo; Executive Director, Adetokunbo Adegbaike; Group Head, Investment & Portfolio Management, Mustapha Adeyinka Onigbanjo; Company Secretary/Legal Adviser, Omowunmi Idowu and Internal Auditor, Segun Babarinde, not much is known about the company, its workers and its operations.

Founded in 1989, Ibile Holdings Limited was established by the Lagos State Government as a key agent to diversify the economy and deliver both financial returns and socio-economic benefits to the state and its citizenry. Since then, successive governments have identified a number of priority areas to drive the diversification of the economy and reduce the state’s reliance on the Federal Government’s allocation. Today, over 75% of Lagos State’s total revenue is internally generated.

The company has over the years focused on investments in the banking, insurance, building and construction, dredging, IT and communications, real estate, oil and gas and power sectors; with a portfolio valued at over ₦15 billion as at 31 December 2014.

The way the company operates is very sketchy and all efforts to get officials of the company to speak officially with Business Hallmark proved abortive. However, those who spoke with our correspondent on the condition of anonymity, said the firm’s major mission is to identify     bankable business ideas to invest in.

“What we do is to take advantage of the numerous opportunities available in Lagos State, in collaboration with strong strategic and technical partners to drive the establishment of new industry sectors. We form alliances with strong technical partners that offer the right strategic fit for our mandates and long term objectives.

“The Lagos State government also uses the firm to take equity positions in companies with high growth potential.”, said one of the sources.

The state government, through the firm, has invested heavily in virtually all sectors of the nation’s economy. From power to telecoms, to banking, construction, real estate, oil and gas and     transportation, the state is daily smiling to the banks through its decision to invest its funds in profitable ventures.

The group investment in equity and money market portfolio comprises of the following investments:

Quoted Investments: This comprises of the shareholdings of companies listed on the Nigeria Stock Exchange which cut across variety of sectors.

Private/Unquoted investments: This comprises of equity holdings in companies not listed on the Nigeria Stock Exchange, some are listed on the National Association of Security Dealers (NASD) market, while some are private companies that impact on the economy of the state in which Ibile Holdings Limited supports to increase and improve it viability.

Sovereign Investment: This comprises of the investment undertaken by the Federation of Nigeria State and involves the participation of the Federal, States and Local governments in Nigeria.

Foreign Denominated: This comprises of foreign investments that are neither on the Nigeria Stock Exchange nor operating mainly in Nigeria. Hence the investments are denominated in foreign currency.

Money market: Ibile also participates actively in the money market investing a certain percentage in treasury bills, bonds, time deposits, among several others.

Real estate portfolio

The Lagos State government, represented by Ibile Holdings, is one of the biggest players in the real estate sector in Nigeria, especially in Lagos State. It initiates and invests in real estate opportunities; with focus on property development; acquisitions, brokerage and facility management,

Ibile’s real estate portfolio, through the interrelation of activities in its focus area, comprise investments in the following properties: Ikeja Plaza, Ikeja Plaza II, Kajola House, Lagos, Platinum Rows Estate, Lekki, Green Park Scheme, Abijo, CHOIS Garden, Abijo, Cooper Court, Ikoyi, Tejuosho Market, Yaba, Ikeja Aviation Plaza, 63, Campbell Street, Lagos, Diamond Island, Osborne Foreshore, Ikoyi Plaza, Jubilee Housing Estate, Iganmu, Idele Housing Scheme, Badagry, among many other portfolios.

The company is currently expanding its portfolio of real estate properties through joint venture partnerships to reduce the shortage of affordable residential accommodation and commercial space.

Banking/Insurance

The state government, through Ibile Holdings, recently launched its own microfinance bank, Ibile Microfinance Bank, where traders and other small-scale businesses source finance for their businesses. The bank, which has its head office at No. 121, Obafemi Awolowo Way, Ikeja,

was licensed by the Central Bank of Nigeria (CBN) in January 2017.

Apart from partnering with the Central Bank o Nigeria (CBN) on its N200 billion MSME fund for onward lending to residents of the state, the bank is the main disbursement vehicle to the Lagos State Employment Trust Fund (LSETF).

It is also partnering with the Bank of Industry (BOI) and other local and foreign bodies to increase access to finance and capital for Micro Small Medium Enterprises (MSMEs).

The state is also a strong player in the insurance sector. It owns substantial shares in Lasaco Assurance, one of the few stocks on the Nigerian Stock Exchange (NSE) that is reckoned with.

According to information available to BH, Lagos State controls the company through three of its companies which have stakes in the firm. They are Ibile Holding ventures, 627,000,000     (8.5%), Ibile Properties Limited 625,000,000 (8.5%) and Ibile Holdings 450,796,764 (6.2%),

Combined, that gives the state government 23.2% shares of the company.

IT and Telecoms

Ibile Holdings is also actively involved in the IT, telecommunications sector. It entered into the lucrative GSM market by acquiring stakes in the then ECONET Wireless, now Airtel. The network was the first network provider that made the first live call using GSM in the country on June 8, 2001. The state, through IBILE, invested N4 billion, but reaped more than N19 billion when it divested years later.

After quitting the GSM market, it diversified into broadband with the establishment of Ibile Broadband Limited.

According to the Managing Director, Ibile Broadband, Mr. Ganiu Oseni, the firm was created to deliver smart initiatives, and provide ICT solutions to entities, which they have provided to many organizations. These organisations currently benefiting from Ibile Broadband expertise include Lagos Internal Revenue Service (LIRS), Lagos Water Corporation, Ambulance Services, LASEMA, and other telecommunications agencies in Nigeria.

Transportation/logistics sector

Apart from having substantial interests in the financial sector, the state government through Ibile Holdings, had also invested heavily in the transportation logistics sectors. The long awaited Oshodi Transport Interchange which will feature the consolidation of all 13 city and interstate parks in Oshodi into three multi-story bus terminals, is been undertaking by Ibile Holdings, in partnership with Planet Projects Nigeria, a privately owned entity.

The three floors, which will be 30,000 square metres for each terminal, will take care of the parking and passenger demand.

The project is premised on a three pronged approach including Urban Renewal, Environmental Regeneration as well as Transformation and Security.

According to the Special Adviser to the Governor on Urban Development, Mrs. Yetunde Onabule, the project is a Public Private Partnership initiative between the Lagos State Government, represented by Ibile Holdings, Translink Capital Development Limited and Planet Projects Limited. On completion, the project is expected to be of immense benefit to all Lagosians, especially major stakeholders including passengers, transport unions, transport operators as well as shop owners.

Ibile Holdings has also embarked on the construction of modern car parks in the state. They include the seventh floor ultra modern car parking facility at Onikan and another multi-storey car park on Campbell Street, Lagos Island.

The Onikan car park, schedule to be completed within 18 months, is expected to accommodate 400 cars on five floors with a 1, 000 seating capacity event hall, on the sixth floor. The project, he stressed is a joint venture between Ibile Holdings and Willao Nigeria Limited with Kaiser as the contractor. When the car parks are completed, they are expected to swell the revenue of the state government.

Ibile Holdings Limited is also exploring water based transit system in order to ease up the bottle-neck currently experienced by the commuters in Lagos State.

Oil and Gas

The Lagos State Government, through Ibile Oil and Gas Corporation, a subsidiary of Ibile Holdings, owned substantial shares in Yinka Folawiyo Petroleum Company Limited, a wholly owned indigenous firm and operator of the OML 113, which recently commenced crude oil production on the Aje field 1 to 5.

While the state currently earns 13 per cent derivation fund from the federation account, it also share profit from the oil wells as an investor. To protect its interest in the oil sector, the state government established Ibile Oil and Gas Corporation, to manage oil related issues to ensure that the state remains in the business of oil and gas in the country.

The Lagos State House of Assembly later passed a bill on 12th of May, 2013 establishing Ibile Oil and Gas Corporation, which was subsequently signed into law on June 11 2013 by Governor Babatunde Fashola authorizing the state government to invest and engage in Oil and Gas activities in the state.

The bill has 28 Sections dealing with functions and objectives of the Corporation. Section 2 (g) of the Bill empowers the corporation to invest in downstream oil and gas activities including gas processing businesses; petroleum products retailing, gas retailing, gas pipelines deployment, acquisition of petroleum products tank farms and other distribution facilities.

The bill states that the Managing Director shall advise the Board in relation to the performance of the functions of the Corporation and shall make proposal to the Board on any matter relating to the activities of the Corporation. Ibile Oil is to Lagos, what Owena is to Ondo State as well as what Delta Oil is to Delta State, and NNPC is to Nigeria.

Through Ibile Oil, Lagos is fully participating in all aspects of oil and gas activities-on-stream, mid-stream and downstream.

Dredging

Ibile Holdings is also involved in dredging and land reclamation. It has considerable expertise in sand dredging and land reclamation from its ownership since 2007 of a 20” x 20” cutter suction Shark – Class Dredger and accessories.

The dredger is deployed for commercial stockpiling/sand mining; land reclamation (sand filling ) and channelization/port sweeping.

Ibile Holdings also has considerable interests in power, agriculture and construction sectors.