Citi continues to connect Nigeria to the world and the world to Nigeria

Jane Fraser is the Chief Executive Officer of Citi globally with physical presence in more than 90 markets, serving clients operating in nearly 160 markets.

Since becoming CEO in March 2021, Jane has launched a multi-year strategy to transform, simplify and modernize the bank for the digital age. Jane is committed to making Citi the preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the U.S.

During her visit last week to Nigeria, JANE FRASER in this exclusive interview with TAYO FAGBULE, editor and ENIOLA OLATUNJI, finance reporter, speaks on how Citi is encouraged by progress of the government and how companies in payments, tech space are new Nigerian champions

If the turnaround of Citi was a book, what chapter are you at the moment?

We’re in an exciting chapter. I think it’s a little bit like the story of the country here. There’s an important history, an enormous potential in the future, a little bit of work to do still and very encouraging signs.

Citi is now entering a phase where we’re really poised for growth, but we’re very mindful of the important legacy that we have, which is enabling progress. Making sure that growth is on good foundations, very focused around our clients. But equally around how do we help the countries in which we operate build the right foundations that have the right governance and discipline.

I think there are some parallels to the country; but for Citi, both in Nigeria and in our own transformation, with an eye on the future, and determination to be a winner.

All of these areas that are being revolutionised by digitization, those are companies that I find really exciting to serve, because they’re going to be the new Nigerian champions

You’ve taken the gruelling decision to lay off 20,000 staff, simplified reporting structure, identified services division as your crown jewel; you’re being now touted as the first banker to turn Citi around. What are your next steps?

We’ve now laid out a vision and strategy for the bank. The vision is we need to be focused on institutions with cross-border needs. So let me link that into Nigeria for a moment; it’s helping foreign companies that are operating here to grow and be successful, bringing investment, modelling the new industries and other areas that will be participating in. Equally connecting Nigerian companies with the rest of the world and to new capital markets that they could be tapping into. Also, neighbouring countries in Africa, we can help them grow into and the other parts of the world that they need to be connected to.

What we see happening in the world right now is a lot of change. All the different global lanes that were in place, pre-COVID have really changed. I’m talking about food, energy technology, financial flows, supply chains. It’s crazy how much they’ve changed in the last three, four years. Part of that was COVID, part of that has been geopolitics, part of that is also just innovation.

And we’ve seen that play out here in Nigeria. I’m amazed how quickly the payment network and how much digitisation is really beginning to take hold here. That’s really exciting for smaller enterprises and for new companies to build more vibrancy into the economies deeper down.

Our role is how do we help companies and countries adjust to those changing flows, how do we make sure connections are happening to the Middle East, how are some of the flows of financing from there, what’s happening in Asia.

India is an incredible bright spot with important connections here. I saw the CEO of Olam food in Singapore a couple of weeks ago, we talked about Nigeria.

Where is it that Citi can help different clients in different countries benefit from the changes in flows, all with the views of growing.

I’m excited about the growth potential that we see, but a lot of it is how do we then help make sure that that growth really benefits multiple parts of the world. Because it’s not just a story of East and West. It’s about what is within Africa or is in Nigeria, what is it in many parts of the so-called global South that needs to prosper?

What we see is if there can be good discipline and consistency in the economic policies by the government, if the private sector can be unleashed

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What does Citi’s 40th in Nigeria say about its resilience amid exodus of other international businesses?

We are really proud of that; we’re looking forward to the next 60.

We are in countries for the long run, and for their potential. Whatever the political and economic cycles, we tend to follow our clients and find the greatest potential.

There have been some difficult times, a lot of difficult decisions have been made here. It’s enormous here: what we see in the food sector, what we see in infrastructure, what we see in financial services, the technology space, and ICT, what we’ve seen in telecommunications and services. In all these sectors there is a big, young, vibrant domestic market.

There’s an incredible vibrancy of people here, with the hunger and desire to do more. What we see is if there can be good discipline and consistency in the economic policies by the government, if the private sector can be unleashed, and that the ecosystems around food, energy, technology space and telecommunication can really let a lot of the smaller and medium sized enterprises flourish. The entrepreneurship of people here is, despite everything there is, an enormous potential.

I view our role at Citi as: How do we make sure that those ecosystems develop, get some of the financing in, and encourage the consistency of government policy? I think that then provides what Nigeria lacked over the last many years. Like the over $700 million 100% UKEF covered loan facilities for Nigeria Ports Authority for reconstruction and rehabilitation of the Lagos Port Complex and the Tin-Can Island Port Complex in Nigeria; through the Eurobonds connecting to the capital markets.

We’re going to have a group of pretty important clients across multiple sectors for lunch about where we can best support them and make sure the conditions are there for investment.

Citi’s 40th anniversary coincides with a raise in the minimum capital requirement, how do you intend to meet this?

Look at our history here. Our role is to support our clients on the ground, to support them in terms of their growth aspirations, their access to capital markets, the risk dimensions because of commodity prices foreign exchange, that’s not just domestic, but can be globally driven. That very many drives, and has always driven, the strategy of Citi here. It will continue to drive our strategy going forward and then we’ll make sure that we’re providing the support for the team on the ground in terms of compliance with capital or other requirements as needed.

You should take it as a good sign that I’m here on the ground in person. You don’t see the other American banks. You don’t see many of the other Europeans. We get on very well with some of the other firms that are here that are global in nature, and we take that role very seriously. This is a statement of our commitment to the future and the growth and what’s needed here; recognising that the country has had a challenging time and that people have had a challenging time, but we’re here for the long run. And we’ll do what we need to continue to play the role we have historically and the role we will going forward.

Under you Citi is relinquishing its “everything to everyone, everywhere” past, yet you started commercial banking services in Nigeria, Kenya and South Africa in 2022. Why?

We are more focused now. We want to focus on institutions with cross-border needs. We’re moving almost $5 trillion every single day; for cash management, foreign exchange, payroll, trade supply and liquidity management needs for multinational companies.

What is exciting now are large multinationals that are based in Nigeria and are also operating in different countries in Africa and abroad. The more exciting stuff is the middle market clients. Some of the smaller companies that are growing very quickly in sectors, payments, technology space. All of these areas that are being revolutionised by digitization, those are companies that I find really exciting to serve, because they’re going to be the new Nigerian champions.

And I’m seeing that across Africa, the benefit one has in Nigeria is the scale of the market; before they go international, they’re able to scale here and that then gives them a tremendous platform.

It makes it very easy working with Citi, for us to help them with some of the under-appreciated important parts of banking, what we call our Services business, our crown jewel. Supporting working capital needs enables ability to operate internationally and the company to succeed.

It’s not just the capital provision. These services are really fundamental, particularly in a volatile world. Foreign exchange hedging, commodity hedging, interest rate hedging, they used to be deeply unsexy things and now very important. We are the best in the world and our team on the ground is the best in the world at it, and they become important to supporting a company.

In the first quarter of 2024, data showed that Citibank Nigeria was the second biggest bank to receive the most foreign investments into Nigeria with $547 million. What in your opinion drove this investment into Nigeria

This speaks very much to Citi connecting Nigeria to the world and the world to Nigeria, and we view it both ways as being important.

Look at the population here, it’s young and hard-working. You want to try and get that population working, you want to see that population growing income. And that’s enormous potential for any multinational company. At the same time, you’re looking and saying we need more of the infrastructure investing that’s required.

You see the digital side. I think that it is one of the largest digital payments networks in the world. That’s very important for e-commerce, for commerce, for development. I think we’ll continue to see more of the investing technology sectors. And then everyone sees the importance of food and healthcare. It’s much easier if you’re a scaled market to attract foreign direct investment, and so I think the country should be trying to make the most of that.

Just as an aside, there’s obviously a couple of senior US government officials in the current administration who are very interested in all things here – Wally Adeyemo, Deputy US Treasury Secretary, is one of them – and the US International Development Finance Corporation.

I was talking to one of the most senior government officials in the US yesterday and we were talking about the importance of America’s connectivity with different countries in Africa. As well as connectivity of Africa with Middle Eastern and Asian investment flows, but America is 50 percent of the world’s capital markets, and it’s got a lot of benefits at the moment because of the innovation that’s happening in health, food, energy and technology. We’ve been looking at what different ways that more American multinationals can be involved and engaged here and looking at the long run.

Some of those foreign direct investments can be facilitated by public-private connections; I think it’ll be an important part of the agenda going forward. Often the private sector is where a lot of the capabilities and drive sit, and the speed and urgency.

We tend to get things done fast in the private sector and so when we can bring those two agendas together it’ll be important, but I think the world is recognising more and more the importance of Africa and the importance of investing for the long run in key countries on the continent. One of the other reasons I’ve come here is to try and put more spotlight and focus, and to learn. So, when I’m back in the States and in the Middle East and in Asia, I can talk about what I’ve seen on the ground.

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Are the US inflation figures expected in hours likely to nudge a Fed rate cut and dampen fears of a recession?

There is an acute focus on every single piece of data. Jay Powell is very resolute, very clear; we are lucky to have him in the seat.

He will be looking at the data carefully, as will everyone. One data point though shouldn’t drive everything. We’re all looking to see how each piece of data adds into the data that we are looking at. We’ve obviously seen some softening of the labour market. And so that’s been an area that everyone will pay attention to. We’ve seen considerable softening of the inflation rate in the goods globally. And [the price of] goods are one that has been suffering a bit more, services still are pretty robust. We’ve seen the shelter inflation coming off, which is good. We just want to continue to see the trend. When some data may be higher, others may be lower and I’m not sure the market will lurch each time it goes one way or another.
It’s more of what is the direction of travel, and will it support what the market is pricing in which is cut in September.

I’m sure between now and then, particularly at quieter times in the markets where liquidity is a bit less, we will be seeing overreactions to every single piece of data coming out. But it’s more of an aggregate. Are we seeing the trends coming down? We are. And that’s what we’re keeping an eye on. I’m sure that’s what Jay Powell and the Fed will be looking at.

Our anticipation for a 50-basis point cut is highly possible in September, but we’ve got a month and half worth of data to come to support whatever decision the Fed makes.

What are your thoughts on climate justice and fair transitions, especially in the light of the rush back to fossil fuels in the West?

If you look, if you take a step back and say, what do we need? And remember, I grew up in Scotland where the winters are cold. If you want to have energy security, affordability becomes really important, and you want to have a transition to cleaner technologies.

It’s a bit like you want to have your cake, eat it and have no calories. That is what we need to solve. You don’t want to solve for one and ignore the other two, you’ve got to look at all three.

As a bank, what do we do? We put our capital into supporting companies trying to come up with clean technologies and not putting bets in one particular basket. But how do we try and get hydrogen, solar solutions, others up and get them scaled so that they can be affordable?

Because a lot of the hydrogen solutions are not viable ones for poorer countries; solar is much more viable, wind may be in certain countries.

The first thing is, how do we get scalable, affordable, clean technologies and invest in them and we’ll put some of our own capital into that, not just lending.

Next is, how do we help our clients move to cleaner technologies? Some of those sectors are very easy to do and others are hard. If you’re in the steel industry that’s difficult. If you’re in a warm sunny climate, how do we help get more solar, and what are other areas? But recognising, if you’re a poor country that is going to take time, and you’re going to need access to financing, then it’s in everyone’s interests to support.

Then there’s the other areas of how we provide some of the incentive and push to get into cleaner ways of reducing those transitions, and still supporting the energy needs of a country. Because there’s no way you can grow if you don’t have access to cheap energy.

As a bank that has operated all over the world for many years, we have an enormous amount of experience in trying to not only get financing but get projects off the ground. We talked about this earlier. Many of the infrastructure projects or some of the different things we’re looking at doing on the ground here. How do we get them to live because it’s not just about getting them some financing. Actually, to get the project operating and producing is really when the real test comes.

How can we help governments make sure they’ve got good frameworks for integrity and not have challenges of corruption involved, and if they are, what’s a framework for getting the project put in place nonetheless, and how do you get things done on a timely basis. Those are the things that we try and work on.

At the end of the day, I don’t view energy security and transitioning to cleaner energy and systems as being mutually exclusive. I’m very mindful, it’s got to be affordable and in a poorer country, everyone’s got to help come up with the solutions.

The big development banks have a lot of data on projects for years. We’ve been working with Ajay Banga, in the World Bank, on how we get their data, so that means you can have lower risk on a project. It’s the very practical boring things that make a difference. We’ve got to make it affordable, otherwise it won’t have an impact on the people who need it the most.

How does it feel to be a trailblazer for women on Wall Street

It’s very awkward is the first reaction to it. It makes you proud, but it gives you a sense that you need to be laying a path for many other women around the world. What can I do to make sure that there is a strong pipeline of women in other institutions who can become female leaders?

We’re very proud here in Nigeria, there is a lot of leadership in the financial sector has come from Citi bankers. We’re very proud to have a woman leading Citi in Nigeria and to have a strong group of leaders coming beneath Ireti Samuel Ogbu will be future female leaders here; just showing women that, yes, you can. I’m a working mum, my sons will probably give you a different scorecard.

These things are possible. You don’t need to be a superwoman. You can just be a very normal person, and these opportunities will come and make sure you raise your hand when they do come your way. And to encourage our male colleagues to be good allies of women. Because I wouldn’t have got where I am without great male allies, I want to make it a win-win.