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  • How banks plan to sustain economic gains in 2014

    How banks plan to sustain economic gains in 2014

    The Bankers’ Committee has expressed its readiness to increase lending to key sectors of the economy in 2014 to enhance growth. SIMEON EBULU writes on some steps so far taken by the committee to actualise its plan after a retreat in Calabar, the Cross River State capital. 

    Nigerian banks have taken a position to boost lending to the nation’s economic sectors next year to sustain the growth trajectory witnessed in the outgoing year and consolidate development gains.

    The nation’s deposit money banks took the position under the auspices of the bankers’ committee, following a retreat in Calabar, Cross Rivers State capital recently.

    The retreat, which had in attendance, the Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi as its chairman, the deputy governors of the apex bank, the Managing Director of the Nigeria Deposit Insurance Corporation, the chief executive officers of deposit money banks, discount houses and development finance institutions, convened at the alluring tourist city for the 5th time to rob minds and brainstorm on ways to jumpstart the economy.

    Nigeria, which is Africa’s most populous nation of more than 160 million people needs $10 billion of infrastructure investment yearly to keep up with rising population and expanding economy, needing funding, Finance Minister Ngozi Okonjo-Iweala said in May this year. Given the nation’s development challenges, banks need to “strategies on a deliberate approach to sustain the momentum into the future,” Aigboje Aig-Imoukhuede, Managing Director of Access Bank and Chairman of the Sub-committee, Economic Development and Sustain-ability of the Bankers’ Committee told his colleagues at the retreat.

    The retinue of participants, which also included Governor of Cross River State, Liyel Imoke; Minister of Communication and Technology, Omobola Johnson; Minister of Mines and Steel Development, Musa Mohammed; former Minister of Power, Barth Nnaji as well as financial industry experts from within and outside Nigeria, provided the impulse for the bankers to get to the root of the problems encrusting financial intermediation in Africa’s second biggest country.

    Since inauguration of the Bankers’ Committee retreat process in Enugu in 2009, the annual meeting has become a milestone event in the calendar of the financial sector, providing a unique platform for peer collaboration, development review, cultivation of strategies and action plans for sustainable growth of the services and real sectors.

    The 2013 retreat, as envisaged, identified progress in the outgoing year, whilst highlighting focal points for 2014 and how the industry would be adequately imbued with capabilities to meet set objectives, the nexus being increased funding of the economy next year and the sustenance of the credit momentum.

     

    Gains of the past year

    According to the CBN Governor, Sanusi Lamido Sanusi, the Bankers’ Committee has made significant progress in transforming the Nigerian financial system into an enabler and engine of real sector growth, through its advocacy, intervention and dedicated support.

    “The collective decisions and actions of the Bankers’ Committee as an agent of transformation have delivered tangible benefits through increase in lending to micro, small and medium enterprises; advocacy and finance to the power and aviation sectors; increased lending to the agriculture sector and modernisation of the payment system,’’ Sanusi said.

     

    The economy

    Africa, may expand 6.75 per cent next year, compared with an estimate of 6.5 per cent in 2013, Okonjo-Iweala said in October. The nation’s rising gross domestic product curve has been attributed to the health of the banking system and the boost in its intermediation role. According to the finance ministry, Nigeria needs annual economic growth of 13 percent to bring down unemployment, now at more than 25 per cent, to single digits by 2020. The implication being that whatever improvement by the banks to revamp the economy needs sustenance.

    In the light of the foregoing, the theme for the 2013 bankers’ retreat was “The Bankers’ Committee as an Agent of Transformation: Sustaining the Momentum.”

    The bank chiefs reviewed the impact of the strategies and programmes of the outgoing year, over the last four years and articulated specific actions to consolidate and improve on gains made in real sector development, towards a reduction in financial exclusion, the strengthening of monetary policy, modernisation of the payment system and the built up in industry capacity and competency.

    According to Sanusi, banks have made significant progress in contribution to economic development and growth. He said the banks in the past year associated with the President Goodluck Jonathan’s economic reform agenda and the objective of growing the economy. To sustain the momentum, the bankers affirmed their commitment to financial deepening of the economy, improving access to finance to reduce the financial exclusion and to make finance work to reverse disturbing levels of unemployment and poverty in the country, Sanusi said. The foregoing were encapsulated in the set of programmes adopted by the banks for the next financial year, through December 2014.

     

    Resolve for higher

    intermediation in 2014

    According to a communique read on-behalf of the bankers by the Central Bank Governor, the bank chiefs revalidated goals for the incoming year to include increased funding of small and medium enterprises, agriculture, power, telecommunication sectors; the modernisation of Nigeria’s payment systems; the promotion of shared services; reduction in cost of operations; the promotion of an environmentally friendly and financially inclusive banking System and increasing industry competency and Capacity.

    “The resolution of the banks were apt as the positions taken by them fully identified with the programmes of the government and needs of the private sector to grow and diversify the economy, especially in boosting production, capacity and employment,” Wale Adebayo, Lagos-based financial analyst said.

    President Goodluck Jonathan hands over 14 power firms to new owners, including Siemens AG, Korea

    Electric Power Corp., Transnational Corporation of Nigeria and Forte Oil Plc, on August 22 as it seeks to boost power output from current 4,000Mw to meet a target of 20,000mw by 2016. The Managing Director of Transcorp, Obinna Ufudo said at the company’s facts behind the figures presentation on December 10, it plans to boost output of the acquired Ughelli Plant to 1,600 megawatts from 287Mw, over the next three years. It is such an expansion programme with huge prospects for the economy that the banks are warming up to fund in 2014, according to Adebayo. Nigerian-owned companies are boosting their share of the country’s oil output by taking up fields in restive areas of the Oil Delta as Shell Development Company and other international energy producers retreat. Forte Oil Plc is one of the local companies looking to acquire onshore assets and will require the support of the banks next year.

    It is a known fact that oil has dominated the Nigerian economy since the 1970s, and now making up 95 per cent of the country’s export earnings and 80 per cent of government revenue. Fortunately, the Jonathan government in its wisdom is promoting a diversification programme that will ensure sustainable growth and development of the economy by emphasising manufacturing and agriculture. The Minister of Agriculture, Akinwumi Adesina, said recently the government plans to increase food supplies by 20 million metric tonnes by 2015. While Nigeria grew enough food to feed itself in the 1960s, it is now the world’s second-largest importer of rice and sub-Saharan Africa’s biggest importer of wheat.

    In support of various private and public sector agricultural initiatives, Nigerian banks increased agricultural credit from less than one percent of loan assets some three years ago to about four per cent this year, Sanusi told reporters in Calabar. The move, according to Adebayo, is commendable and signposts the readiness of banks to leapfrog the economy from 2014.

    The deposit money banks, according to Sanusi, also took a position to entrench sustainable banking next year by adoption and implementation of agreed sustainable banking principles as they go beyond profits to promote social inclusion and consider environmental principles.

    “Our strategies will include institutionalisation of governance for sustainability; advocacy of the corporate bill of rights for the customers and employees of financial institutions; adoption of digital platforms and payments as game changers for financial inclusion; capacity building and effective collaboration with non-financial partners and other external stakeholders.”

    The banks also decided to address the gaps in the depth and breadth of products practices and infrastructure of the financial markets, whilst acknowledging that small and medium enterprises, the agriculture and power sectors are absolutely vital to the economy, Sanusi said.

     

    Towards enhanced industry

    capacity and efficiency

    Resource capability is of course germane to deliver on the objectives marshaled out by the banks. The lenders were not oblivious of the essence of capacity and efficiency to achieve their objectives and set out to sharpen their tools and optimise the use of various factors of production.

    “We are committed to competency and capacity building of appropriate knowledge, skills, character, competence and experience to carry out key functions. The industry will adopt high benchmark and standards by which it measures its progress.

    Modernisation of the financial service industry infrastructure and payment system is critical to reduce cost of services to the Banking public. We will continue to explore and develop areas of collaboration in shared services and infrastructure to reduce the operating cost structure of the industry,’’ Sanusi said.

    Nigeria embarked on banking reforms following a debt crisis in 2008 and 2009 that brought the industry to near collapse. The central bank fired eight chief executives of the country’s 24 banks and created Asset Management Corporation of Nigeria (AMCON) to buy lenders’ bad debts and stabilise the industry. Amcon spent 5.6 trillion naira in 2011 to acquire the non-performing loans, according to Chief Executive Officer Mustafa Chike-Obi. The nation’s banks have since seen improvements in risk management and corporate governance, resulting in increased lending and profitability.

    First City Monument Bank obtained $150 million syndicated loan from eight financial institutions this month to enable it meet oil, gas, and general lending purposes. The bank, which originally targeted $100 million increased the size after the deal was oversubscribed, according to a source that declined to named because of the confidentiality of the transaction.

    Guaranty Trust Bank raised $400 million five year note last month for general corporate purposes with JPMorgan and Morgan Stanley as bookrunners. Fidelity Bank Plc sold $300 million of five-year bonds to boost its corporate lending, the bank said in statement in May. Overall, banks are raising various forms of equity and debt capital to boost their intermediation role.

    Believing that the banks have the capacity to achieve set tasks and are determined to succeed, the bankers, “resolved to monitor the progress of implementation,” Sanusi said, adding that they will also access the impact of their actions, “on Nigeria’s economic development goals and objectives on an ongoing basis.”

    With barely few days to new-year, there are hopes that a new generation of banks, well re-capitalised and desperate to make a change, will be able to lift the people and rewrite the story of the economy.

     

  • As the chair of a bank, I’m a coach in my own right- Ex-Skye Bank MD Akinsola Akinfemiwa

    As the chair of a bank, I’m a coach in my own right- Ex-Skye Bank MD Akinsola Akinfemiwa

    Former Managing Director of Skye Bank, Akinsola Akinfemiwa, is back in the banking industry as Chairman of Heritage Bank after a brief absence. But his most exciting experience now appears to be his new portfolio as Vice Chairman of government-owned Transmission Company of Nigeria (TCN). He sees the appointment as an opportunity to contribute to a history-making venture. In this interview with SEGUN AJIBOYE, he talks about his family life and his life as a banker. Excerpts:

    Some people have described you as a banking whiz-kid. Do you agree with this?

    When people talk about whiz-kid, it is not about being brilliant. It is about leadership. You train people, groom them and they start to depend on you. You lay out what the values are, train people to be able to take decisions. We always have our own whiz-kids in our lives. These are people that we rely on; people that we believe can come with the solutions. They are people who over time we depend on to come up with the answers. To me, that is whiz-kid.

    How challenging was your tenure as MD/CEO?

    I know that I did my best when I was in that industry. As a practitioner, you go in there and give your best. Yes, the last few years of my banking experience were very challenging, but they were also very exciting. You pushed in all directions and put in all your energy because it was new. We put together five banks with the consolidation exercise. You define the tactics that you want to adopt, and people follow you. Sometimes, these people don’t even know why they are following you. The reason they follow you is because they believe in you. As the leader, you are the enable.

    It is not often that you get one person to head two different banks at different times. How did you achieve this?

    If you look at it from the perspective of a profession, then you’ll know that because you have built sets of skills in your career, when people need those skills, they go out to look for you. That is the way it has happened all my life. I’m doing a particular job and something new comes up, and the owners of that business are looking for a CEO that can do the job, and they call you up and give it to you because they know that you can do the job.

    I am a professional manager. Even as Chairman of Heritage Bank, it is the same thing. I joke with people that though I have retired from banking, I am now playing the role of a coach like you have in football. I am no longer the CEO or playing a management role. I now play the role of a teacher, telling them which way to go and sharing my experiences in banking with the board.

    Where do you get the energy to do all these?

    Like I said, it is a different ball game. I believe you are looking at it from the point of an every day job. As chairman of the board, the people are more interested in the value you bring into the board. You could even work, expressing your views to them via a mail or telephone. It can also be that they want you to open a path somewhere for them. Even for you as a person, you are also working, building experiences because you are also learning from the people you meet on the board. There are new things that you are learning from your colleagues on the board.

    As MD/CEO, you oversaw the consolidation of Skye Bank. How challenging was it?

    For me, it was what they call joyful stress. It was challenging, but because you felt you were doing something great, you were happy doing it. You didn’t even notice the pressure. The drive is there for you to continue to work and enjoy it. I think this is in all professions, especially if you feel you are achieving results, you feel you are pushing or providing solutions. That was the way I felt.

    It was very tough, and it was happening for the very first time in my life, bringing people together from different backgrounds, different organisations. It was very tough, but you also thank God that He saw you through. That is the way I would put it. It was some experience because we have heard of two companies coming together, but when you have five companies coming together, and the most difficult aspect is managing the people. You can control the rest of the elements; they listen to you and go the way you want. But when you have people, they come with their biases and mindsets. And there is nothing you do or say that can make them change. And you realise that these are adults, some of whom are older than you. They are biased not because they hate you, but because they see things differently. So the ability to put these people together, to do what they say they won’t do and still enjoy doing it is the challenge.

    What’s your impression of the banking industry in Nigeria?

    We have made a lot of progress. The industry has done quite well. The regulators have done quite well. Frankly, I look at it from the point of view of when I was there. If they hadn’t done what they did, you’ll begin to wonder where we would have been today. But banking industry worldwide, you see this challenge coming every 10 years. Things have been done in Nigeria to make sure that the banks are stronger. And those managing are a bit more careful, while the regulators have learnt more lessons in the last few years. But there are still more to do in the area of training, capacity building and to ensure that what have been achieved is sustained. By and large, I think what we have today is fairly better and stronger than what we had a few years ago.

    And what would you say about the Nigerian economy?

    That’s a tough one. If you go by the reports that we read, we should be doing very well. Seven per cent, eight per cent GDP and all, they all sound very good. Countries that have recorded these GDPs are doing very well. And if you record this for 10 years, you become China and other emerging big economies of the world. But when you look at what you have on ground, then you begin to think maybe we need to be careful with statistics. The economy has huge potential. The young people are very vibrant and energetic. So what is important is what we do with these people. We need to train them, equip them so that they can contribute to the economy.

    There is also the issue of governance. People have said there is a correlation between governance and progress. If you have a high rate of corruption in a nation, the economy will be weak. But if you have transparent and low level of corruption like we have in some parts of the world, then you would see that they do well and progress. So we need to deal with that and begin to measure how our economy is doing.

    I also believe in education. They say labour is cheap in Nigeria, but when you buy a cheap labour and you get a bad result and you end up doing same job two, three times, then you’ll realise that labour is not cheap in Nigeria and many of the African countries because the quality of job is so poor that we end up depending on other countries of the world. And as long as we continue to do this, it means that employment and production will continue to happen out there and not here. We would then continue to have a huge number of unemployable people.

    For example, if you train as a doctor or nurse in Nigeria, you’ll find that there are some parts of the world that you cannot practise. And this is in almost every profession. So we need to know that education is very critical. We need to begin to train our people. We cannot continue to depend on this consumption economy whereby all we do is to produce oil, sell it, bring back the money and spend. We need to build our own capacity for people to produce and consume what we produce. I think the economy has huge potential, but I think we are so far away from where we should be. And when we compare ourselves with countries like Malaysia, Singapore and others, then we should ask ourselves where we are in all of this.

    As a country, I don’t think we can say our economy is doing so well until we are in control of all these things. How can we say our country is doing well when power is at less than 4000 megawatts? And the country that we compete with in Africa, South Africa, is at well over 40,000 megawatts. For me, we would not be sincere to say that we are happy with what we have. Sometimes I have the nightmare that what happens if the oil of this nation dries up one day? What happens to us, if something happens and the oil dries up?

    You are the Vice Chairman of the Transmission Company of Nigeria. What is this new experience like for you?

    I think the power thing is more important than the bank thing. About 10 years ago, I went for a programme, where you tried to plan how your future would be, and one of the things I wanted to do after the corporate world was try and see what it is like in government business. Now I have this opportunity as the Vice Chairman of the Transmission Company of Nigeria (TCN). It is the government business in the power value line. The other two have been privatised. You have the TCN in-between the power generation and distribution companies. So, what is left of what used to be PHCN is the TCN.

    That is what I am saying about the job being very exciting, to see how this would work out. People have said that the TCN is the weak link in the power line, but I believe that if TCN is given the necessary support by the owners, which is the government, I mean in the same way the other two companies would get from their owners, there is no reason why the company should fail. I have seen it. The people on the board are professionals.

    My view is that I have seen it work in the last one year, and we would be achieving results very soon. I am learning a lot about how government works. But to move from 2000 megawatts, the generation company must be ready to pump in resources to generate. The TCN must be willing to transport whatever is generated to the distribution company. I have realised today that sometimes, if we have blackout, it may not be coming from transmission. It may be from generation or distribution. For instance, there could be a gas problem or the water level is low. I think with the support from government, which has been promised, and also with some new ideas, we could begin to outsource some of the lines. You could build a transmission line, like we have with the toll roads, so that we can call for more investment. We can begin to look for creative ways to increase capacity in that sector.

    So if you ask me what I’m doing here, I would tell you that it is exciting for me to learn more about what I think would be profound for the nation, to look for solutions to our power challenges. I also think the power sector privatization has gone very well in spite of what some people may want to believe. I hope those who have acquired these plants would put all their efforts to make them work, modernise the plants and to get the needed human resources to manage them. Being part of this power thing really excites me.

    Would I be right to say it is a challenge for you?

    Yes, it is. But I am enjoying it basically because is providing a solution to a problem.

    You have a foundation, the Araba Foundation. What do you hope to achieve with this?

    A step each by every one of us would bring about a huge change to our nation. If, for instance, there is the need for us to clean this nation, and I decide that my immediate environment must be clean. If everybody begins to do same, the whole country would be clean.

    We can continue to condemn government till eternity, but who is the government? We complain, but fail to do anything about our own immediate environment. If you play your part and I play mine, then things will change for us. We complain about Nigeria too much. It took a group of people to say we need a change. I know a lot of state governors who marvel at what is happening in Lagos. Remember the type of taxis that we had in Lagos. But the government went out to negotiate with banks and other organisations to make a change. And the truth is that things are working in Lagos.

    Let us go a bit personal. What was growing up like for you?

    I was a son of a civil servant. I had an average growing up. I went to school when everybody my age went to school. There was nothing unusual.

    You mean nothing like a privileged background?

    Like I said, my father was a civil servant, middle-level civil servant, and we had the privilege of going to school. I went to secondary school and after that went to the university.

    You studied Agricultural Economics at the University of Nigeria, Nsukka. Was this deliberate or was the course chosen for you?

    I was 16 when we were taking this decision, so it wasn’t really about ‘I want to be this or I want to be that’. The fact was that one of my seniors in school had gone to the University of Nigeria. He is a professor now. A lot of my mates were doing Medicine and Pharmacy at the time. And for some reasons, I wanted to be different. I actually wanted to study Economics, but I didn’t get it.

    Another thing was the idea of travelling to the east of the country, the River Niger and all that. All these were too exciting for me. I wanted the adventure, wanting to see the stories that we had been told by the senior. And my father did not like the idea of going abroad to study. He seized all the forms that we tried to use for admission into schools abroad

    What reason did he give for this?

    I think it had to do with personal experience. Some of his friends who went there to study didn’t come back, and those who came back didn’t do too well. Maybe one or two personal experiences, but he was dead against travelling abroad.

    Who would you say has had the most profound impact on your life and career?

    It was my father. He was my very good friend. He was the one that built me up. It was his combination with my uncle, his brother. They both did a whole lot of work on me. Like my father, my uncle directed everywhere that we should go. My uncle, whom I lived with during the earlier part of my life, was a civil servant. I think his position at the time would be the equivalent of the chief accountant of the nation today. And my father was always there for philosophy, for explanation of things about life. He was wise. He had a world view about things. He made me realise early that if you have a good education, then you have the key to success. So my uncle and my father were the two people who took turns to groom me.

    Was meeting your wife the usual love at first sight as some would claim?

    My wife was my friend before we started to date. We lived in the same neighbourhood. Her brother was also my friend and colleague. We did things together, read books together, argued together and one thing led to the other.

    So how has it been?

    Almost 30 years with four kids, it has been wonderful. She takes care of things.

    Any special secret?

    I think it’s your own style. Remember that we talked about inter-personal skill. My thing is that you first have to make up your mind that you want to make the union work. I tell people that marriage is like any other contract. You play your part, I play mine. That is the only way to make the contract work. And that is why we go to court to sign agreement. But the problem is that people want to go outside of that agreement to do things. People must be patient with each other because they come from different backgrounds.

    Another thing I found out in marriages with challenges is that people want the other person to be like them. We try to force the other person to be us, and we fail in doing this. But generally, I think men don’t listen to their wives because they see themselves as men. But I think men should listen more to their wives. On the other hand, women want to convert their men to whom they feel he should be. I would advise the women to relax. The two should know that they are both different, so there would be different opinions. They should just try to find a common ground for their opinions.

    I am professional. I dress to meet my professional needs. Yes I may read the fashion books, but I don’t go out of my way to dress. I know what is decent, and what I should wear or should not wear. But I would not describe myself as a fashion icon.

    How do you relax?

    Like I said, I love music. I love to be with people, to party. And of course, I love to watch movies and to go out with my friends and family. Somebody once described me as Liverpool FC because I am always in company with my friends and family.

  • Women to get 40% of banks’ top positions

    Women to get 40% of banks’ top positions

    • CBN: many financial, risk officers unqualified

    The Central Bank of Nigeria(CBN) has directed that 40 per cent and 30 per cent of top management and board position in banks be reserved for women from the end of next year.

    CBN Governor Sanusi Lamido Sanusi said at a women empowerment conference in Lagos that banks had keyed into the supervisory bank’s plan of getting more women into these position.

    “Most of the banks have done so well. I have seen them going to look for women to put on their boards. There are now more female in the senior levels than ever before, even as the market is also asking for gender-balanced boards,” he said.

    Banks now, he said, were getting incentives from Development Finance Institutions (DFIs) like the World Bank and the International Monetary Fund, among others when they put more women on their boards. “The banks that promote these principles get funds from Development Finance Institutions as incentives to promote gender equality in the banks,” he said.

    CBN, he said, had taken action to break the glass ceiling that continues to block female talents from reaching the top by issuing a circular that by 2014, 40 per cent of banks’ top management and 30 per cent of Board directors should be women.

    He said as much as the banks and CBN wanted these targets to be achieved, merit and competence would never be sacrificed. “I am a very strong believer in diversity, be it gender, ethnic or religious, but I believe it can never be achieved by sacrificing merit and competence. We want women, but we need qualified women. If we want to fill a position in the bank and you are a woman, if you have the right qualifications, we will support you, if you don’t, then you have to go and get it,” he said.

    Sanusi also explained that just like in every part of the country, there are qualified people to fill any kind of position. It also follows for companies to also have qualified women to fill any kind of position.

    “If you say I want a woman with these qualifications to come, people should look at their structure and get the right persons to fill the positions. And if you don’t have enough qualified women, banks can go to other banks to get qualified women to fill the positions. And that is actually how this is going to work,” he said.

    He regretted that in most banks, key control functions were still being occupied by people without the requisite qualifications and competence.

    In some banks, he said, only about 50 per cent of their chief financial officers, chief risk officers were qualified, based on CBN criteria.

    The banks, he said, were not being asked to sack the less qualified staff, but to train and retrain them. “We have not asked banks to sack anyone. We advised banks to train and retrain them to ensure they reduce the level of non-compliance,” he said.

    Sanusi said women, who constitute half of the world’s human capital, were one of its most underutilised resources. Studies have shown that if better use were made of the world’s female human capital, economic growth will increase and the number of people living in poverty will decrease.

    He said 70 per cent of the world’s 1.3 billion people living on less than $1 a day are women and girls adding that in Africa, although the economic growth has witnessed an average of five per cent Gross Domestic Product expansion since 2010, there are more than twice as many extremely poor people living in sub-Sahara Africa.

    Globally, he said, women made up less than 30 per cent of the total labour force in some countries, and they are often concentrated in the low-productivity and low-paid agricultural sector.

    He said despite the impressive growth rate being experienced in Nigeria, women who constitute 49 per cent of the population make up only 21 per cent of the non-agricultural paid labour force.

    “But for Nigeria to continue on this high growth rate sustainably, skilled women should be deployed to drive productivity improvement by breaking the barriers and creating conditions to unlock the full potential of women. Similarly, women’s representation in management positions is remarkably low-known as the “glass ceiling” phenomenon. At corporate level, the number of skilled women reduces quickly as you move up the corporate hierarchy,” he said.

    He said this gender gap persists despite evidence that women managers can improve the economic performance of companies and organisations adding that it is this realisation of the economic benefit of gender equity that led CBN and the Banks to have deliberate policies to advance women to leadership positions.

    The CBN boss said Norway was the first to enact quota of 40 per cent women on boards, and women now hold 35 per cent of board positions. Similarly the European Commission has proposed a 40 per cent quota for the whole EU region. The United Kingdom has recommended a 25 per cent target by 2015.

    He said the CBN is focusing on gender diversity and women’s economic empowerment as pathways to achieve sustainable development through the implementation of the Nigerian Sustainable Banking Principles. The NSBP is to ensure that gender diversity is a business imperative.

    CBN makes gender diversity a priority because of the advantage of having a talent that is difficult to replicate adding that at the apex bank, seven out of the 27 Directors are women with some deliberately made to head traditionally male dominated departments.

    Also, 650 employees have received gender training and currently we have 25 per cent affirmative action with the target being 50 per cent.

     

  • Bank strengthens internet grid

    Bank strengthens internet grid

    Guaranty Trust Bank (GTBank) Plc has an-nounced the upgrade of its internet banking platform for all customers. In a statement, the bank said the upgrade incorporates a new look and additional technical functionalities.

    It said the upgraded Internet Banking platform provides customers with a more user friendly way to carry out their online transactions and manage their services.

    It also offers customers an account information reporting service via its new homepage dashboard as well as an enhanced security feature with its improved login keypad functionality. With its new responsive design, customers can use Internet Banking conveniently on computers and mobile devices.

    The bank’s Internet Banking platform supports an an array of service offerings that include bills payments, own and third party transfers and foreign exchange transfers to any bank account in the world.

    Speaking on the development, Sina Ayegbusi, Head of Guaranty GTBank’s Technology Division stated that the bank’s commitment to superior customer service experience drives it to ensure that it utilises revolutionary technology to simplify and secure the online banking transaction and experience of its customers.

    He further stated that the upgrade to ‘’our Internet Banking platform gives our diverse costumers various on-the-go banking options due to its responsive design that makes it convenient for use on computer and mobile devices’’.

    The bank’s alternative banking channels were given a Payment Card Industry Standards Council (PCISSC) certification in 2011, implying that the channels meet acceptable technical and operational requirements to prevent fraud.

     

  • Eight ‘big’ banks’ assets to cross N20tr

    Nigeria’s banking sector is gradually evolving into a “game of size”as scale economies become the competitive differentiator, report by Afrinvest West Africa Limited, an investment and research firm has said.

    The firm’s report projected that the industry’s assets would be N26.4 trillion by next year, with the top eight banks in control of about 80 per cent or N20.8 trillion of the total assets. These banks are also expected to control 76.3 per cent of the industry’s gross earnings by 2014 result.

    The top five banks include FirstBank, Zenith Bank, Guaranty Trust Bank, United Bank for Africa and Access Bank. The other three banks are Skye Bank, Diamond Bank and Ecobank.

    According to the report titled: ‘Nigerian Banking League-The Fate of Small Players’, the bigger banks, with an average total assets of N2.6 trillion, appear more competitive in squeezing out higher earnings compared to tier-2 (smaller banks) with N900 billion of total asset as at September. However, the operating expenses margins and cost funds for the bigger banks are rising.

    It said the era of real banking appears to be gradually re-emerging as traditional sources of high income continue to face significant threat from tighter regulation and increased competition.

    Tier-2 banks on the other hand are faced with the challenge of expanding their local franchise, to absorb cheap deposits and aggressively generate more risk assets. This has left Tier-2 banks with the option of either “Specialise” or “Expand inorganically.”

    It said as expected within the last nine months, the sector has been characterised by a “policy induced” earnings shrink, in addition to the aggressive competition for cheaper deposits.

    “While most banks are hinged on product differentiation strategy using innovation to remain afloat; we keep a keen watch on the industry’s competitiveness as events unfold. Nevertheless, the future of banking is set to take a dramatic turn,” it said.

    According to the report, the era of double digits earnings growth in the banking industry has gradually begun to thin-out.

    “The numerous liquidity tightening policies introduced by the CBN has constantly exerted pressure on the banks’ profitability within the last few months. A review of the banking industry’s last nine months Profit before Tax (PBT) revealed an average nine per cent decline across the Tier 1 banks, and a 6.3 per cent growth within the Tier-2 echelon,” it said.

    The analysis also revealed that Tier-1 banks accounted for 82 per cent of the total income in the banking industry; with GTBank and Zenith Bank leading with a nine-month Profit After Tax of N69.2 billion and N69.8 billion respectively as at September.

    It said a further review spots the downward trend in Tier-1 bank’s Net Income Margin from 7.9 per cent in 2012 to 7.1 per cent in June and 6.1 per cent in September 2013.

    This it explained, could be attributed to a reduction in the industry wide interest and non-interest income. In the same vein, the net profit margin for Tier-1 banks shrank quarter on quarter to 23.3 per cent in September from 24.3 per cent in June this year.

    It said constant liquidity tightening rhetoric as reflected in the CBN’s policy stance has had a significant impact across Nigerian banks (Tier-1 and Tier-2). The hawkish policy designed in 2013, targeted at price and exchange rate stability, have consistently squeesed the earnings of the banks, particularly the 50 per cent Cash Reserve Ratio (CRR), which effectively removed approximately N1 trillion from the financial system.

     

  • How AMCON saved banks in 2010, by Sanusi

    How AMCON saved banks in 2010, by Sanusi

    The Asset Management Corporation of Nigeria (AMCOM) acquired N5.7 trillion bank debts when it was established three years ago, Central Bank of Nigeria (CBN) Governor Lamido Sanusi has said.

    The debts came from long years of insider abuses, bad loans and declaration of false profits by some banks, Sanusi said at the 50th anniversary at the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.

    He said AMCON bonds held by banks would be retired in 2015, adding that N1 trillion of the bonds will be retired by December 31, this year.

    Another N1.1 trillion would be retired next year, he said, adding that none of the banks will hold the corporation’s bonds beyond 2015. CBN, he said, held N3.6 billion of the bonds.

    According to him, the CBN has so far achieved its monetary policy objectives, based on the level of stability in the economy and financial services sector.

    The bank under his leadership, he said, had achieved exchange rate stability, banking sector stability and achieve single digit inflation target.

    He said the CBN ensured that throughout the resolution of the banking crises, no depositor lost money. Corporate governance and risk management issues that threatened the financial system, he said, had been addressed, adding that banks now understand and are aware that there are consequences in crossing certain lines.

    On November 19, investors wrote to AMCON, seeking to know how the N1 trillion bonds will be retired.

    AMCON’s Chief Executive Officer, Mustafa Chike-Obi said such decision would guide CBN’s liquidity management plans in the coming months.

    Meanwhile, a report by Renaissance Capital (RenCap), an investment and research firm, titled: Nigerian Banks: Killing Me Softly” said most lenders that invested in the bonds would face challenging earnings this year.

    “We believe this will remain a challenging year for Access given the nature of its balance sheet (large exposure to illiquid AMCON bonds). We think 2014 should be a year of stronger growth for Access, as most of the AMCON debt matures at the end of this year and will be redeemed for either cash or t-bills – giving Access the opportunity to earn better returns on its assets,” the report said.

    The report also said tougher regulation by the CBN would make it difficult for banks to deliver improved earnings.

    “We think it will become harder for some of the banks to deliver returns in excess of their cost of equity – especially some of the smaller banks,” it said.

     

  • Cash-less banking for states in June

    Cash-less banking for states in June

    Cash-less banking, which began in Lagos last year, will go nationwide before the end of June, next year, according to Central Bank of Nigeria (CBN) Deputy Governor, Operations Mr Tunde Lemo.

    Anambra, Ogun, Rivers, Kano, Abia and the Federal Capital Territory (FCT) adopted the policy last June.

    Speaking during the Nigeria Inter-bank Settlement System (NIBSS) 20th anniversary in Lagos, Lemo said the use of mobile phones and Point of Sale (PoS) terminals in implementing the policy remained critical.

    “That is a challenge that we are also working on. If mobile phones can serve as a touch point, our transactions would go up rapidly. So, these are some of the things we are looking at, hoping that by next year, as we roll out more PoS machines, we have to see how we integrate the mobile phones into the network because in the hinterlands, the challenges would be more. We hope to roll-out to all the state capitals by the second quarter of next year,” he said.

    Lemo said an effective payment system was going to be an effective anchor for the transformation of the economy even as the nation strives to be one of the 20 biggest economies in the world by 2020.

    CBN Director of Communications Ugochukwu Okoroafor said the policy was meant to reduce the amount of physical cash circulating in the economy and encouraging more electronic-based solutions for payments for goods and services, transfers among others.

    Since the project was introduced in 2002 in Lagos, many commercial banks have, through emails, text messages and formal letters been sensitising their customers on the need to embrace alternative payment options.

    In an emailed statement to its customers, GTBank said the policy will drive the development and modernisation of Nigeria’s payments system within the Abuja and selected states. It said all individuals and corporates will be encouraged to adopt electronic payment and other banking options.

    The policy, which before now was only operational in Lagos State in terms of charges, is aimed at promoting the use of electronic-based transactions instead of cash for payments for goods, services, transfers among other services.

    The implementation of the ‘Cash-less Lagos’, as it is known, began eary last year and has recorded improvements is the use of PoS, Automated Teller Machines (ATMs) and other e-payment tools.

    The service charges/fees did not apply until March last year, in order to give people time to migrate to electronic channels and experience the infrastructure that has been put in place.

    The policy framework stipulates that cash-in-transit lodgment and cash evacuation services will no longer be available to customers or merchants. For individual account holders, charges on cash transactions will apply when daily withdrawals and deposits are in excess of N500,000 while for corporate account holders, charges will apply when daily withdrawals and deposits are in excess of N3 million. It is the account to which withdrawal and lodgment is made that bears the processing charges and not the individual that receives or deposits the cash.

    However, the CBN granted exemptions on lodgments and withdrawals for accounts operated by embassies, diplomatic missions, multilateral agencies, aid donor agencies, Ministries, Departments and Agencies (MDAs), Microfinance Banks (MfBs) and Primary Mortgage Institutions (PMIs).

     

  • Banks jostle for SMEs’ funding

    Banks jostle for SMEs’ funding

    Banks are taking strategic positions in funding Small and Medium Enterprises (SMEs) seen as key driver of the economy and financial services sector. COLLINS NWEZE reports steps taken by most lenders to empower the subsector through improved lending.

    A Until recently, banks in Nigeria and other parts of Africa were relatively unwilling to finance the millions of Small and MediumEnterprises (SMEs) dotting the continent’s challenging business landscape. Reasons: poor quality of financial records maintained by most SMEs, insufficient protection of lenders’ interests under existing commercial laws, and the difficult business environment where they operated.

    However, deposits money banks have recently, started to develop improved value proposition to enhance banking services to SMEs. Banks like Ecobank Nigeria, Skye Bank Plc, Access Bank, First Bank of Nigeria among others have consistently improved their commitments to lend to the subsector.

    There have also been various SME development and advocacy organisations including the Nigerian Association of Small Scale Industrialists (NASSI) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have constantly encouraged banks to enhance the access to finance to SMEs to help grow the economy while also helping business methods by focusing on training and enhancement of business methods of these businesses.

    The recommendations are against the backdrop of the partial success of the 2005 Micro-Finance Policy, Regulatory and Supervisory Framework for Nigeria introduced by the Central Bank of Nigeria (CBN). The project has transformed the 607 community banks operating across the country into micro-finance institutions to enable them extend micro-loans to individuals, businesses, and organisations, which would otherwise be unable to access funding from formal financial institutions.

    Ecobank Nigeria said it was committed to developing robust value proposition to enhance banking services to retail markets across Africa, including the under-served SME segment.

    According to the bank, the role was in line with its goal to extend its dominance of the wholesale banking business in the region to the retail segment since SME banking has been identified as a key driver of retail and economic growth.

    To achieve this, the bank embarked on an aggressive and strategic expansion of its distribution channels by growing its branch network through acquisition of Oceanic Bank in Nigeria in September 2011 and Trust Bank Ghana Limited (TTB) in January 2012.

    The acquisitions added nearly 500 branches to the Group’s network thereby consolidating its status as Africa’s number one bank brand. This is a key part of the bank’s goal to bring banking closer to its customers, a key part of the value proposition to drive retail banking. The bank’s transactional account offering allows customers to make use of its branch and electronic channels, driving easy and convenient payment. The bank also offers a competitive international payment platform using telegraphic transfers and documentary trade solutions to boost payments to foreign suppliers within and outside Africa.

    The bank has a strategic alliance with Nedbank of South Africa and the Bank of China which clearly illustrates the group’s global ambitions. The bank also provides various financing products to help SMEs grow and their businesses. These include basic overdrafts, business term loans, trade and distributor finance in local and foreign currencies.

    The Ecobank overdraft makes funds available to eligible SMEs when they need it without having to pay interest on the full cash limit but on the amount of cash utilized. While the business term loan is repayable in equal monthly installments for any period from one to five years to finance specific business needs of SMEs. Ecobank also provides flexible short term finance to businesses that import and distribute raw materials, non-perishable finished goods. The bank’s trade finance offering helps SMEs manage their cash flow while minimizing risks associated with the settlement of international trade.

    More importantly, Ecobank Transnational Incorporated and African Guarantee Trust Fund recently signed a portfolio guarantee agreement worth $50 million to support Small and Medium Scale Enterprises across sub-Saharan Africa. Following the signing, which took place at the ETI’s head office in Lagos, Ecobank pledged to promote and support small businesses within the region. The two institutions said under the terms of the $50 million agreement they would work together to unlock the potential of SMEs in Benin, Burkina Faso, Cameroon, Côte d’Ivoire, the Democratic Republic of Congo, Kenya and Nigeria to deliver inclusive growth.

    Speaking on the agreement, Group Executive Director, Domestic Bank, ETI, Mr. Patrick Akinwuntan, said the inaccessibility to finance had been a major obstacle to small business growth and development, with only 20 per cent of African SMEs receiving a credit line from a financial institution. The agreement, he said, aimed to assist viable SMEs by providing an AGF-backed partial guarantee for 50 per cent of net losses of the principal. This, he added, was under the loan facilities extended to customers in the value chain of the SME financing programmes, including contract and receivable finance, distributorship finance and asset finance.

    A statement by the company quoted the Ecobank Group Chief Executive Officer, Thierry Tanoh, as saying, “This agreement reaffirms Ecobank’s commitment to support small and medium-sized businesses and our collaboration with African Guarantee Fund will further enable the SME sector to play a critical role in the socio-economic development of Africa.”

    Akinwuntan said, “Ecobank recognises that the SME and medium-sized enterprises sector has significant growth potential, represents Africa’s ‘rising middle’ and provides the largest employment pool for our vibrant population. This agreement leverages our unrivalled pan-African footprint to deepen financial inclusion in Africa.” Also speaking, Chief Executive Officer of AGF Felix Bikpo, maintained that the partnership with Ecobank was of great significance as it provides them with a very important Pan-African banking network through which African SMEs would be assisted in getting increased access to financing.

    In a separate assertion, Chief John Odeyemi, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), disclosed recently that SMEs engaged in the distribution trade constitute about 50 percent of the sector, while 10 percent are into manufacturing, 30 percent in agriculture and 10 percent in the service sector. According to Chief Odeyemi, SMEs account for over 60 per cent of Nigerian Gross Domestic Product generated mainly in the agricultural, service and distributive trade sectors. He added that SMEs engaged in distributive trade are more viable than those in the manufacturing and agricultural sector, making it easier for them to access funds from financial institutions.

    In spite of the challenges, which characterise lending to SMEs in agriculture and manufacturing sectors of the economy, Akinwuntan noted that Ecobank remains committed to funding these sectors. He said the bank’s value proposition to SMEs was developed after painstaking research on the needs of businesses in Nigeria, using traditional and non-traditional methods to evaluate, mitigate and price the risk associated with financing SMEs, especially in the manufacturing and agricultural sector.

    “We have developed a comprehensive value proposition anchored on three pillars to aid the growth of SMEs. The three pillars are access to finance, capacity development and business advisory and transactional support. Enhancing access to finance remains the key objective of the bank, and we intend to achieve this by providing capacity development solutions and advisory services to SMEs, through third party partners, and our knowledgeable sales team. The bank also encourages the businesses we finance to develop capacity in managing their risks, help them organize themselves into cooperatives and ensure financial statements are up to date. This helps in minimizing the risk of failure ultimately leading to a healthy loan book,” Akinwuntan said.

    The expected social and economic outcomes from funding of SMEs is to raise household incomes, create employment, improve food security due to increased trade, manufacturing, agricultural productivity and the generation of market surpluses, as well as improved access to markets, while institutionalizing credit products at more affordable rates for individuals and small businesses across the country, in a sustainable manner.

    Also, Skye Bank said it intensified efforts to provide financial services to the unbanked within the population. The Executive Director in charge of South-south Business Development/Retail Banking, Skye Bank Plc, Mrs Ibiye Ekong, who disclosed this during an interaction with the press in Lagos, said the lender will reach out to the unbanked through specialised product offering adding that it had perfected plans to enhance opportunities in the retail segment of the market.

    “There are about 64 million unbanked adult population in the country, and another 16 million youth population that is unbanked. So, a lot of opportunities abound out there for players in the industry”, she said.

    FirstBank has reiterated its commitment to SMEs growth through improved funding and capacity building.

    Speaking ahead of the its premier SME conference held in Lagos, the bank’s Executive Director Retail Banking South, Mr. Gbenga Shobo said the lender has as part of its far-reaching SMEs’ support programme named SMEConnect, initiated an a yearly conference.

    He said the conference with theme: “SMEs at the heart of national development: Creativity, capacity and capital” will highlight challenges and opportunities for small businesses.

     

  • Banks get N5.7tr CBN loan to boost liquidity

    Banks get N5.7tr CBN loan to boost liquidity

    The Central Bank of Nigeria (CBN) has lent banks and discount houses N5.74 trillion to boost liquidity. The figure is an increase of 124.4 per cent compared to the N2.56 trillion in the preceding quarter.

    The fund, which came as Standing Lending Facility (SLF), was granted in the third quarter, which ended in September, at 14 per cent. The SLF is an overnight credit available on banking days between 2 pm and 3.30 pm, with settlement on the same day value.

    Also, the total Standing Deposit Facility (SDF) was N14.3 trillion during the third quarter, representing an increase of 135.1 per cent over the level in the preceding quarter.

    According to the CBN, banks’ deposits at the apex bank increased by 14.8 per cent to N7 trillion in contrast to the decline of 10.2 per cent at the end of the preceding quarter. The development reflected largely, the 75.4 per cent rise in banks deposit, which more than offset the 32.5 and eight per cent decline in the deposits of others’ and Federal Government, respectively.

    The CBN attributed the significant increase in activities in the standing facilities window mainly to the banks’ preference for depositing their overnight balances at the discount window rather than placing them at the interbank.

    It explained that money market rates were influenced by the liquidity condition in the banking system arising from the introduction of the 50 per cent Cash Reserve Ratio (CRR) on all public sector deposits, coupled with the delay in the release of fiscal allocation.

    The CBN had on November 19 Monetary Policy Committee (MPC) meeting maintained the Monetary Policy Rate (MPR) at 12 per cent, and kept the symmetric corridor of plus two per cent around the MPR for SLF. However, the SLFs are available only to banks and discount houses that have executed the Nigerian Master Repurchase Agreement (NMRA) with the regulator. The NMRA covers the operations of the SLF and addresses issues relating to pricing, duration, custodian as well as default resolution in lending.

    The Liquidity Ratio Cash Reserve Ratio (CRR) and the Net Open Position were also retained at their preceding quarter’s levels of 30, 12 and one per cent.

    It said discount window also remained open to authorised dealers to access both the standing deposit facility (SDF) and standing lending facility (SLF). Overall, developments in money market indicators were mixed in the review quarter.

    The CBN said that the value of money market assets outstanding at the end of the third quarter stood at N6.5 trillion, showing an increase of 0.34 per cent, compared with the increase of 5.96 per cent at the end of the preceding quarter.

    The development was attributed, to the 94.13 and 53.15 per cent increase in banks investments in Commercial Paper and Bankers Acceptances outstanding during the period under review.

    There were also mixed developments in banks’ deposit and lending rates during the third quarter. The average savings deposit rate, which rose to 2.44 per cent from 2.04 per cent in the second quarter, all other rates on deposits of various maturities fell from a range of 5.69 per cent to 7.72 per cent to a range of 4.92 to 7.55 per cent in the third quarter.

    The weighted average inter-bank call rate, which stood at 11.69 per cent at the end of the second quarter of 2013, rose by 2.34 percentage points to 14.03 per cent in the third quarter of 2013, reflecting the liquidity condition in the banking system.

    Similarly, the weighted average rate at the Open Buy Back (OBB) segment rose to 14.14 per cent at the end of the review quarter from 11.27 per cent in the preceding quarter. The Nigeria Inter-bank Offered Rate (NIBOR) for the seven-day and 30-day tenors rose to 13.79 and 13.95 per cent from 12.19 and 12.46 per cent, in the preceding quarter.

     

     

     

     

  • ‘Manufacturing companies are not banks’ brides’

    ‘Manufacturing companies are not banks’ brides’

    As important as the manufacturing sector of the economy is to a nation, it is sad to know that it is the least sector to be sure of developmental loans from the local banks. And this is a source of worry to many manufacturers.

    One of these people is Johnson Sehinde, the Managing Director and Chief Executive Officer of Infinity Paints International Limited, Lagos.

    “I truly wish that banks could be lending to manufacturing companies. We need medium term loans. The stark reality is that the banks are more comfortable lending to traders. The bank interest rates are not realistic. In some of these emerging developing economies, the interest rates are as low as one per cent or less. And when they take funds from their economy to produce and bring the goods to the international arena, how do we play to compete in that situation? These are the issues and challenges that we face daily as manufacturers,” Sehinde said.

    He should know, having spent 15 years in the business of paint manufacturing. “I read Accountancy at the Obafemi Awolowo University, Ife. I have spent about 15 years in the paint industry. Infinity Paints started five years ago. The company came from my experience in the paint industry. I left the services of President Paints Nigeria Limited as General Manager to establish Infinity.

    “As General Manager, I had the privilege to manage manpower, money, market and methodology. That, to me, was good exposure. It was a great time of learning outside the school wall because the university degree is basic, but training on the job gives capacity and competence. That is what gives relevance in the industrial and business environment. President Paints gave me the opportunity for the experience that I garnered to be able to survive in this industry.

    “I left the company because the time was ripe for me to leave, but the question of what next came up and I had some time to wait and look at the possibilities of what I could do. Actually paint was not on my mind. It was the last thing that I could think of because having reached the position of Chief Operating Officer in my former place of work, it was not such a fascinating idea to a young man like I was then. There were challenges that made it difficult for me to consider going into the manufacturing business. The enabling environment was not there; it was harsh,”he said.

    But the harshness of the environment, in a way, turned out to be an opportunity for Sehinde. “I realised that every system in the world has its constraints. And once you decide that you are going to play in a particular system, the constraints will start diminishing. That is because you will suddenly realise that if it was not tough, everyone else would have been playing in that system. The few persons left to play in that system will also be the few persons that would decide or be deciding the prospects of that system. The few will also be ones to take advantage of the opportunities found there. That was what inspired me into the manufacturing sector.

    “When I started, I had to leverage on the grace of God and the goodwill that I had as I could not rely on the banks. So I am very lucky to have met with people who were ready to invest in my capacity and confidence. I refer to them as ‘angel investors’ who came to my rescue at that point in time. These were friends who were ready to believe in me,” Sehinde said.

    Starting up was very challenging. He said: “To start with, we could not even connect to the national grid. The power generating system was so challenging that even when there was power, the voltage was not sufficient to power our equipment. Unfortunately, at the end of the day, we were still given overestimated bills, whether we used it or we did not use it. As it is today, we are not even connected to the national grid. We power our factory through power we generate. We run hundred per cent on diesel every day. We hope the ongoing power reform in the country will usher in a new era where we can proudly be able to use electricity conveniently in our factory for production. I pray that it translates into something positive for the industrial sector.”

    He further said: “I will say that there are opportunities in the paint manufacturing sector. Nigeria is currently in housing deficit. Apart from the prospect of new houses coming up, paints generally, do not last forever. For instance, when you paint, after three or four years, you will still have to paint again. Moreover, there are and will always be old houses that will always need to be painted. The demand for paints is continuous. Apart from decorative paints, there are other types of paints, like the industrial paints, the marine protection coated paints, the auto paints, the wood finishes.

    “Here, we do decorative paints, the ones that are used for the painting of houses. We have the emulsion paints, the texture, the flex coat, the fatigue finish, the gloss paint and so on. We have some other specialised paints too. We do industrial coatings. We manufacture red oxide paint which is used in the construction industry. The iron and steel companies too use much of this red oxide paint. We are hoping to go into the production of marine paints, those use for ships.

    According to him, the future of paint manufacturing in Nigeria remains bright because the market is readily available. “The opportunities are still here, and the prospects are great. Along the line, a few of the players will find their ways to the top. A few will find a way to manage their constraints and take advantage of their opportunities. So some will forge on; we have cause to thank God that there are industrialists currently in the country who motivate youths into striving to be better people,” he said.

    As an entrepreneur, Sehinde’s motivating spirit is “a positive outlook and passion about what I do. This is what I have been doing. The job has taken me to the Oxford Brookes University in United Kingdom, among other places, to develop more capacity. There has been so much that has added value, through the job development. I have also been able to acquire knowledge in risk management. I have learnt to face opportunities at various points of risk. That does not mean that you must beat a retreat. I want to forge ahead, knowing that in the midst of these challenges, there is a way out.

    “These are some of the things that I have learnt. We are not just paint manufacturers; we provide a total paint solution; we are into manufacturing and paint application. We also provide corporate painters who know about our paint. We take painting as an art; we are usually interested in the finishing. We are project-centric, and over the years, we have identified with quite a number of prestige projects across the country. We also do aesthetic consulting and property branding.”

    Sehinde will like to see more and more people going into the paint manufacturing business. “You have to first of all choose the segment that you want to play in, and the products you want to do. Then, you have to consider your location and size. You would consider whether you want to build a factory or have a cottage outfit at the back of your house. Any way you look at it, the minimum I believe should be from N60million upward to start a company for the manufacturing of a standard paint. Most of the inputs come from abroad, and without the use of some of them, you cannot give or produce a standard paint, or one that will stand the test of time,” he said.