Some Lagos residents have expressed satisfaction at the pace of work on the Lagos/Badagry expressway reconstruction project.
Samson Olawale, a mechanical engineer by profession turned percussionist has created a niche for himself as a successful entrepreneur in the musical industry. In this exclusive interview with OLADIPO OLUWATOSIN, he shared his experiences on how the entertainment industry can contribute immensely to the national and economic development. Excerpts;
At the official unveiling of Stanbic IBTC Bank’s digital branch at the Maryland Mall, Lagos, Deputy Managing Director, Stanbic IBTC Bank, Dr. Demola Sogunle, spoke on Stanbic IBTC Bank’s digital banking revolution and the bank’s growth strategy, among other issues. Excerpts;
Concerted efforts of government, private sector will make ‘Made-in-Nigeria’ ideas successful – Accenture
Niyi Yusuf, Managing Director, Accenture Nigeria, in an interview at the recently concluded NESG, spoke on how Nigeria can achieve self-sufficiency and promote the Made-in-Nigeria initiative. NEWSVERGE write.
Interview with Mrs. Sola David-Borha, Chief Executive, Stanbic IBTC Holdings Plc, on the sidelines of the 22nd Nigerian Economic Summit in Abuja
What is your impression about the 2016 Nigeria Economic Summit which had the theme Made in Nigeria?
The Nigerian Economic Summit Group, as you may be aware, is the leading platform for public sector and private sector engagement. The theme, Made in Nigeria, is particularly important at this time when the economy is in a recession. This is not the first time that Made in Nigeria has been promoted or discussed but you find out that during crisis people are more attentive. We now have a better understanding of why it is much better to use local goods and services because that ultimately helps to achieve an improvement in productive capacity in the economy.
Essentially, our message is to tell both domestic and foreign investors that Nigeria is still an economy with great opportunities. The current challenges, which is primarily driven by the commodity price drop and subsequent foreign exchange scarcity, is temporary, it is a business cycle and that hopefully if we do the right things in terms of our policy direction and also working together with the government such that we support their efforts to promote an enabling environment that will then attract investors to come into the country and invest in various sectors. This ultimately will lead to a private sector-driven growth.
We believe an important aspect of achieving this is to ensure that the financial markets are transparent, are liquid and the prices at which goods and services are obtained are done at an optimal one. So, whether you are selling your foreign exchange or it’s the money market or the equity market it is at your market rate and on the back of a properly functioning financial markets you will find that capital is attracted and that capital will then drive the growth that we so desire.
From the summation of the resource persons, are you comfortable with the coherence between the fiscal and monetary policies? Can that actually achieve the purpose for which we are gathered here?
It is very important that there is alignment between fiscal policy and monetary policy and given where our inflation rate is now, it is above 17%, inflation has to be tamed. That has to be the priority and in the short-term, it does mean that interest rates will still remain fairly high but strategically the longer-term direction when inflation starts coming down is for interest rates to also come down. In the mean time there are a number of other things that can be done to support the overall objective of stimulating growth in the economy. One of the keynote speakers, Dr. Doyin Salami, pointed out that if we look at the four main drivers that impact our economy – the global trend, which we don’t control, international trade, commodity prices, which we also don’t control, and our expectations in the short to medium term is that oil prices is not going to rise significantly. The fourth aspect is our own policies that we implement. Of the four things the only thing that we can control is our policies. Therefore, it’s very important that we put in place the right policies and that we are consistent in implementing them. What investors look for is that policy consistency. They are very nervous when policies change because it means they can’t manage that risk. They can manage the risk of a drop in oil price. So our policy response, what we do, making sure that essentially we regain the confidence of investors in this market has to be the priority.
We talked about interventions to create jobs particularly for the young ones and speakers highlighted the fact that the 15-25 years bracket most of them are either unemployed or underemployed. Now the intervention of banks is very important. What is your bank doing in that direction to help the youth employment situation in the country?
We are doing a number of things, which includes capacity building because like you heard from the panelists, up-skilling the young people is very important, training is very important. Developing their capacity enables the younger entrepreneurs to get a better understanding of how to manage their business and ultimately if you lend to those businesses, they have a better chance of surviving and paying you back. So capacity building is a critical aspect of it.
Also we find that the big companies help the smaller companies to survive. We need everybody in that value chain because everybody has a role to play. And we find that as lenders if you have a big company that is utilizing the goods and services of smaller companies around them, it guarantees the smaller companies buyers so they have a market, they get support and they have a working capital cycle that is more manageable. So, that whole ecosystem of both the big and small players is much easier to lend to, rather than lending to one small person that is isolated and with the slightest problem he just goes under. Those are the kind of things we encourage. We encourage small companies to try and get into an ecosystem of a larger one. We provide them with capacity building and we give the appropriate kind of financing. You know it’s very important that when you are looking for a loan, depending on what that loan is for, you must make sure you get the right type of financing for that loan. If it’s a project that has a very long gestation period, you shouldn’t take a short-term loan that you have to pay back in one year. So, linking investors to such opportunities is part of the work that we do as well.
The worry of most people is that the kind of conditions that banks give to the small investors is always very scary. Is there any special arrangement that your bank has to be different from other banks in terms of collaterals that you require from small investors?
We have tried a lot of things over the years because we are committed to the SME sector and we think that the SME sector is a segment that is going to drive growth in this country. The bulk of Nigerians are involved in that sector. We have tries several things. At a point we had unsecured loans that we gave out, but we found out that that didn’t work as well. Beneficiaries don’t pay back since it’s an unsecured loan. It’s best to put in place a structure that provides the support and also hold them accountable. And like you know it’s not so sonorous that they can’t provide what is required. That ecosystem principle is very important for cooperatives where you have a group of people who come together, so one person can’t just decide I am not doing it again, there is pressure from the peers to behave correctly. You are also able to review the risk of the whole and typically cooperatives have a better bargaining power than even larger entities. So, those are some of the ways by which we try and address the challenges the SMEs face, but it’s also good to put them in a model that helps them as well as make them accountable and responsible.
It’s on record that Stanbic IBTC gave lease of life to some major projects in the country, talk of Dangote refinery, Lekki-Epe Expressway and the likes. Now I want you to tell us in simple terms what your organization is doing in terms of support for manufacturing and the real sector.
If you look at the GDP of this country, Nigeria has over 40 economic sectors. Manufacturing currently comprises less than 15% of the total GDP. Agriculture is about 22%. Then you have the Services, ICT and Energy under 10%. In terms of the sectors that we focus on, it’s those sectors that we believe will help to improve the productive base of the economy. And those sectors are infrastructure, agriculture, oil and gas and power. We are also very active with the FMCGs; those are the consumer goods, given the large size of our population. We provide a whole range of services to them: financing, short, medium, and long term financing. We are also very active in raising capital, whether equity capital or debt capital. We have strong links with investors, both domestic and foreign investors. We have a very strong advisory team that helps in terms of restructuring businesses or investors who are looking at acquiring companies locally or if companies are coming to merge together, we provide a lot of support in that area. We see ourselves to be financial solution providers. We are not just bankers that come and give you money. We want to understand what it is you are doing, strategically where are you trying to take your company to and then to make sure that we find the right solution for your company’s needs and then we help you to achieve your goals.
Looking at agriculturists and other agro-allied operators, what do they need to come around to get what they want? Most of them are peasant farmers who have some acres of land. What exactly do you advise them to do? Do you encourage clusters? What do they need in order to come and access loans?
Agriculture is a sector that has faced lots of challenges especially in terms of financing but a lot of progress has been made over the past five years. Essentially, with the introduction of NIRSAL (Nigeria Incentive-Based Risk Sharing Model for Agricultural Financing), which is a risk sharing model for lending to the agricultural sector; you have found that banks are now more prepared to lend. We are also involved in supporting the agricultural sector. A single subsistence farmer operating on his own is going to find it very difficult to get financing. That farmer has to get into a group, a cluster group of cooperatives or an outgrowers scheme and then you find out that it’s then easier to support that farmer and we have done that. We have lent on outgrowers schemes, we have lent to cooperatives, among others.
What’s the ratio? Can you give us the quantum of those who you have lent to, in terms of cooperatives?
It’s across the country that we work with these cooperatives. I’m not going to tell you x number, but it’s something that we continue to actively focus on. And it’s across all the main crops whether it’s rice, millet, cassava. Also we believe that focusing on the export products as well in terms on cashew, and cocoa, is important. Exports particularly because of the positive impact it has on generating foreign currency. Agriculture, we think is a growing sector. It grew by 4.5% in the last quarter; we believe that that growth is sustainable and that Stanbic IBTC is keen to be part of the growth.
PPP has been with us for quite some time but are you comfortable with the legal framework? What do you think should be done differently by this administration to get it to work?
PPP (public private partnership) is right in the middle of what the NESG is about; the public and private sectors coming together. And given the billions of dollars that are required to fund infrastructural development, government is not capable of doing it by itself. There is a semblance of a legal framework in place. It’s clear that at the state government levels, some states are still yet to pass their PPP laws. And what sometimes is even more important is actually the implementation of the law and what happens across the life of different governments. Because the projects typically are long term, they can span 12 years plus and the risk we see many times is when the government that initiated that project is different from a new one that comes in and the commitment of that new government to keep to the terms that were agreed with the previous one. Financiers and investors invested in the project based on those terms. So once there is any change of any sort, it almost triggers an event of default which then affects whether the project can be completed in some cases or continued. So I think that to help encourage more PPPs, there has to be an education about PPPs in general both in the public and private sectors as to what financiers are looking for, the risks of policy changes that affect PPP projects so that there is just more awareness around it and if the political will to ensure PPPs are protected from many of the vagaries of changes in government you will find that you will see more successful PPPs. I stand to be corrected but I believe the Lekki toll road is the first PPP that this country has had. It’s seen its own challenges as well and in fact we are hoping that that model can be replicated on other roads in the country and even bridges as well.
We are talking about infrastructure, which is very important to the development of the economy. One aspect that is lacking right now is the level of power/electricity that we need to get things going. How much involvement in the development of the power sector is Stanbic IBTC?
We have been involved in the power sector. We are involved in two of the assets in the distribution space during the past privatization exercise. It’s a very challenging sector given some of the changes in the tariffs. For instance, a party has taken the government to court on whether there should be a tariff increase and those tariffs were the basis by which investors came in. So, it’s a challenged sector. But despite these challenges, I believe that there’s still hope to the extent that it’s a sector that is very much needed, everybody requires power. We believe that the fact that those power sectors are now owned by the private sector gives them the capacity to raise capital, should they require, bring in new investors, and borrow so that they can buy the much needed equipment. It’s a long-term game, but the expectation will be that in 10-15 years, if the right investments are done in this sector, we will see that translate to an improved power supply.
We partnered with GE (General Electric) to run an embedded distributed power solution across the country, where together, Stanbic IBTC and GE in Nigeria and Standard Bank and GE across Africa will basically help to put up embedded power plants across the country. We continue to work on that project and we believe that that will also support the efforts of our country to improve power supply.
Most banks have been struggling with the issue of bad loans, AMCON’s intervention and all that. How have you been able to survive such?
There is an economic recession and you find that companies find it more difficult to repay loans. For consumers, if you haven’t been paid salaries, you are unable to service your loans. So, it is an outcome of the recession and the non-performing loans across the industry have gone up. Having said so, I believe that banks are doing their best to manage the situation. We believe from our own perspective that the worst is over and we continue to look for new opportunities, particularly in growing sectors where we can mentor.
How do you think Stanbic IBTC has remained relevant and a step ahead of what is becoming an intensive and competitive environment?
We are very unique in a number of respects. First of all, we are not only a bank. We are a financial services organization that runs across asset management, wealth creation, we have a trustees business, we have a stockbroking business, we help raise capital, both debt and equity capital, we are the largest pension funds administrators in the country with over a trillion naira in pension assets. So, that makes us unique in that we provide a full range of financial services, including insurance. We have an insurance brokerage business.
With this diversified financial services offering, we believe we are able to provide a full range of financial services to our clients. So, they don’t only come to us to borrow money, we provide advice to them, we help them manage their assets and also manage their pensions, even all the way to retirement. We call it cradle to grave – an entire lifetime of financial services.
In addition, we are the only international bank because we are a member of the Standard Bank Group, a 153 year-old organization with a presence in over 20 countries in Africa as well as various countries across the world; we have a presence in New York, in South Paulo, in London, etc. We are the only international bank with a full service offering in Nigeria. We are in every state in Nigeria. Most international banks are providing a narrow set of services, primarily to corporates. We are a full service on-ground international institution.
The third thing that distinguishes us is the fact that the Standard Bank Group has a strategic partnership with ICBC, which is the largest bank in the world, it is a Chinese bank. ICBC owns 20 % of Standard Bank. Therefore, in terms of the partnership between Chinese businesses and Africa, we are able to help them in terms of their own growth plans in Nigeria. We work with them, and in the process help to strengthen China-Nigeria business ties. It is possible using the Renminbi, for instance, as a trade currency to encourage either Nigerian businesses doing business in China or vice versa to use alternative trade instruments. So, we believe that that essentially differentiates us from the other financial institutions in Nigeria. Our diversified business model also enables us to better withstand the headwinds that are coming through because we are not just focused on banking, we have a much wider remit and that enables us to build a much more sustainable business in the long term.
What do you think the regulatory agencies should do next to encourage the financial services sector? Are you comfortable with the policies and some other things that they do?
Globally, the regulatory environment has been much more intense and regulation is important for any industry or sector. The most important thing is that the regulator should be firm and fair because regulation is important especially when you have free markets operating. The regulator needs to step in when required, but then should not hinder the free flow of business.
Are you comfortable with what is operational in Nigeria?
For everything, it can improve. There is nothing you can’t improve upon. Given the fact that Nigeria is in a recession right now, it is important that regulators work with business to ensure that we all come out of that recession faster and sooner. If you come down too heavy, you can actually destroy the business. I think the most important thing is to ensure that the regulators focus on ensuring that business is done properly and not in a way that hinders the business.
There was an alarm raised by the House of Representatives recently about the health of Nigerian banks. How true?
All I can say is that we are in good health and we are adequately capitalized and our liquidity ratio is well above the regulatory threshold. Our rating was recently reaffirmed as Triple A. We want to assure everyone that Stanbic IBTC is an organization that they can continue to do business with.
Where do you see Stanbic IBTC in the next few years under your leadership?
Stanbic IBTC as a financial services organization is an organization that is a leading end-end financial solutions provider in Nigeria. We want to continue to support our customers in achieving their dreams. We are committed to driving the growth of our clients. We are committed to ensuring that investors are attracted to the economy and committed to seeing that the Nigerian economy grows and develops to its full potential. We believe that we have the skill and capabilities, the experience and the passion to ensure that Stanbic IBTC supports the Nigerian economy as it continues to grow.
Philip Odiakose, Lead Consultant of Nigeria leading and fastest growing Independent PR measurement and evaluation agency, in this interview, spoke on the need and benefit to have a body that regulates the activities of Independent Media Monitoring and Measurement Agencies in the country. NEWSVERGE reports;
It is a known fact that “all work and no play makes jack a dull boy”, but now, it is no longer jack alone but every hardworking individuals. For Ikoyi Club 1938, Mr Olusola Adeosun, Vice Chairman of the Club, in this interview with KAYODE ADELOWOKAN, Managing Editor of NEWSVERGE, spoke on how the club have been able to discipline in the last 78 years still protecting its old structures cum what makes the Ikoyi Club 1938 stands out among other clubs in the country. Excerpts;
First Independent Communications/PR measurement agency in Nigeria, P+ Measurement Services recently set a new feat by becoming the first member of the International Association for Measurement and Evaluation of Communication (AMEC) in the country. Philip Odiakose, Lead Consultant of the firm, during a chat with SUNDAY OJELABI, spoke on the benefit of being AMEC member and why it is unethical, unhealthy and unprofessional for PR agencies to mark their own homework. Excerpt;
After three months of excitement, intrigue, heartbreak and elation, Arese from team Waje emerged as the first ever winner of The Voice Nigeria. Arese walks away with a recording contract with Universal, an SUV from Africa Magic worth 7 million naira and a 4-day all expense paid trip for two to Abu Dhabi courtesy Etihad Airways.
In this interview with JUSTIN TYOPUUSU, Comrade Bobboi Bala Kaigama, President of Trade Union Congress of Nigeria (TUC) spoke on the state of the Nigeria economy, why TUC withdrew from the strike among other issues. Excerpts;
TUC withdrew from the national wide strike embarked upon by NLC. Can you tell us why you were part of the planned strike, but later back out of the strike action?
The scenario started when we were ambushed by the federal government announcement of the increased of pump price of petrol from N86.50 to N145 and with that ambushed the organised labour, NLC and TUC decided to come together and issue an ultimatum for the pump price of the Petrol Motor Spirit (PMS) to be reversed. As usual, a meeting of our respective National Executive Councils (NEC) which is made up of all the 36 states chapters of the TUC and the NLC needed to meet to X-ray the issues at hand and to give us the national leaders the position to take. The NLC met in Abuja and we the TUC met in Lagos. At our meeting in Lagos I was given a mandate to ensure that the pump price is reverse to N86.50 and in case that does not sell we should go into negotiation with government on the issue of national minimum wage, palliative for Nigerians and proper constitution of the Petroleum Product Pricing and Regulatory Agency, PPPRA to monitor the template for distribution the product from the depots to the retail outlets and to extract a commitment from government that they would be sustainability in the distribution and supply to Nigerians. On the other hand our colleagues in the NLC had one mandate which is go and revert the pump price to N86.50, so when we go to negotiation we try to harmonise, but the federal government team presented us with facts and figures of the matter.
The government team said it was practically impossible to revert to N86.50 why because at the N86.50 the federal government was only able to satisfy only 50 percent of the domestic consumption and that is why we were still having queues. So, they present two options- one to involve the private sector (independent marketers) to compliment the other 50 percent or whatever the government generated from the sale of crude, will not go to the federation account, but the NNPC will hold it by way of buying the refined product for domestic consumption and when that happens the three tiers of government will suffer it because the amount that will get to them would not be enough to even pay salaries and that is why in the last federation account meeting what was shared was the least to be shared in the last 16 years and the reason was because they were able to make N550 billion out of which N500 billion was expended on the the importation of petroleum products. The second scenario then emerged. The marketers demanded for dollar to enable them import the product, again the government said there was no enough dollar. Government then offer to allow them source for dollar at the inter bank rate of N285 per dollar as against the black market rate of over N300 and when they import they should sell not above N145 to enable them make marginal gains. But even before we got to this stage, government was ready to allow NNPC and affiliate marketers to sell at N110 and independent marketers at N145, but again the queues would not disappear as people will prefer to buy at NNPC stations. They also observed that the gap would produce billionaires overnight including NNPC staff who would get allocation at N110 and sell at N145. The marketers advised government to narrow the gap and we arrived at N135 for NNPC and N145 by independent marketers. With this position we saw reasons and instead of remaining dogma, we opted for negotiation on how we can move forward. As Trade Union federation, we are concern about our members’ welfare and conscious not to make government to collapse and that was why we opted for dialogue.
So, what are the issues you brought forward for discussion, hence the increase is affecting every sector of the Nigeria economy including the poor man in the village?
One, we agreed with government that a tripartite body will be set up to address the issue of minimum wage and this will start and end within the next six months. Two, a technical committee involving all the relevant stakeholders to sit and look into the issue of palliatives to cushion the effects of the increase for Nigerians and workers in particular. Three, we agreed that within two weeks the federal government should set up the board of PPPRA and that all refineries must be brought to life and enabling environment provided for modular refineries around the existing refineries. These modular refineries would go along way in to help in the supply of our local consumption need. This has been the position of TUC. The agreements we reached with government and the decisions we took not to embark on strike, we believe is in the best interest of the system and Nigeria, because we don’t want the system to collapse. But Nigerians must understand that the two unions, TUC and NLC have their different NEC and when they take decisions, Nigerians should respect their positions. TUC respects the decision of NLC and NLC equally respect the position of TUC. We believe that soon the NLC will review their position and we will certainly be on the same page.
The strength of the organised labour is in their unity. Don’t you think the separate position taken by TUC and NLC will weaken labour bargaining power?
Yes right from the beginning, we even took divergent views and we were frank with ourselves. We said this is the mandate of my NEC and I came with two alternatives. NLC said, look this is the mandate of my NEC, I only come with one alternative. And globally, in collective bargaining when you are sitting at the negotiation table, you come with the spirit of give and take, so we leave that to Nigerians to judge. As for frosty relationship between TUC and NLC no! We have understanding among ourselves. We discussed our positions behind the scene and we promised to respect each other’s position. But that does not mean, when there is another issue that affect us we will not work together. To me, it’s a learning process and we will come out stronger than ever before.
So, in other words, strike was not an option for TUC right from the beginning?
Strike was an option, but like I said, the thing is, the moment you are invited for dialogue, that is negotiation and you don’t come to negotiation table with one option. If you have one option then you don’t come to negotiation table. Stay over there and read out your option and when the other party is ready to meet your demand then you talk. Can there be progress? We went to the negotiation table with two strategies with strike at the extreme end and when we discovered that strike will collapse the economy, we opted for negotiation because if we do, in the next two months there would not be enough money to share at the federation account. Our refineries as there are cannot produce more than 30 percent of our consumption need and we cannot be deceiving ourselves. TUC as Union have a cream la cream of experts in the energy sector. PENGASSAN one of our affiliates knows everything that is happening in the sector and they brief us accordingly, so we know what is good for Nigerians at the moment as far as the issue at hand is concerned. We understand the workings of the industry and that is why we went to the negotiation table with options. And in union negotiation it’s a win win situation, that is the spirit of give and take.
You said you are going in for negotiation on the increment in the National minimum wage, what are you putting on the table?
The issue of minimum wage has to involve the state governors, ALGON, TUC, NLC and other relevant stakeholders, government has already written us to send our representatives and soon discussion on the issue will commence. We are proposing N56,000. Remember at the negotiation during the last minimum wage increase, we proposed N52,000 and we got N18,000. Today, Edo state without bargain has increase the minimum wage in the state to N25,000. Edo is a state in Nigeria and if Edo can pay N25,000 minimum wage, then other states too can pay. No state in Nigeria, apart from the old generation states was created without a memorandum of understanding that their internally generated revenue, (IGR) can pay the salaries of their workers, so state governors have to look inward and see how they can fix their problems. They collected bailout twice from the federal government in less than one year, and some cannot still pay salaries. We are going to monitor them closely to see how they dispense the monies they collected as bail out. We are going to be watch dog, helping the EFCC and ICPC to monitor them.
Many Nigerians accused the federal government of not creating awareness before the sudden increase. How do you react to this?
We share this sentiment too, but when we got to the meeting, the government team told us that government herself underestimated the magnitude of the problem until they have to dip hand in the federation account to ensure availability of fuel and the state governors started kicking. If we were insensitive we would have insisted on the N86.50 and then in June, our members in local, state and even federal government would not have gotten their salaries, so which one is the worse scenario? And it was very very clear with the figures and the situation presented to us that, that was where we were heading to. Again, I want to give it to Nigerians to judge which way they would have taken if they were in our shoes.
In a matter of weeks from today, you will be going in for a delegate conference. Why do you think your members should trust you with another mandate and what would you do differently if re-elected?
First, I want to thank you very much, the Mirror correspondent for raising this issue. You know, we nearly experience what our counterpart in the NLC is facing, but quickly I woo my colleagues back and TUC is moving as one. This is one of my achievements. And because of the unity in TUC, I am happy to announce to you that the forthcoming election, the delegate conference of TUC which is holding on the 2nd and 3rd of next month I am going in for the position of President unopposed. Two, in trade unionism, training and retraining is key especially in this era where we want to move from table payment to the era of using our brains. I have trained and retrained my members and affiliates more than 1,700; never in the history of the union that this has been done. Our members are today better informed and when we take our position it’s always an informed decision. Our head office is still in Abuja, but when I come on board, I set up a liason office in Abuja which is today very functional. We also have a functional transport company that shuttle our staff to and from their work places to reduce their hardships. TUC has also gone into an MoU with a developer to deliver affordable housing for members. We are developing 20,000 housing units for our members in Abuja. We also signed a joint MoU comprising Federal Mortgage Bank of Nigeria, TUC, NLC and employers Association and we have delivered houses through the scheme in Abuja, Niger, Kaduna, Kano, Katsina, Enugu and Taraba and that of Lagos is still ongoing. We engage government on issues of national development, we make sure our voices are heard on issues of national interest. We defended adequately the welfare of our members, ensure periodic promotion of our members with their entitlements paid and so on. These and many more have been some of our achievements and we will consolidate on these achievements and bring innovations in TUC in our second tenure. God’s willing we will take TUC to next level.