How would you review 2015 from the Institute’s perspective?
THE year has been very eventful in terms of happenings in the nation’s credit industry and the political space. Looking at the credit industry, the banking sector has continued to face a lot of bad debt. It’s been a very challenging moment for them recovering their debts, which is evidence that the credit system is not properly structured. At a time, the Central Bank had to authorize the banks to publish names of those indebted to the banks, an approach that has been largely condemned and considered unprofessional and unethical, capable of sending wrong signal to the international investing community.
To us in the Institute, that was going beyond the bounds of what the contract stipulates. Generally, if you default, it is for the banks to realize it through whatever security or collateral you pledged in obtaining the loan facility. And if that is not sufficient enough, you head to court; but that was not the case. Unilaterally, we saw the CBN instructing banks to publish names of debtors in the pages of the newspapers. It is not healthy and professional. It is a lazy man work to get back bank loans. It is the banks that need to be queried on why they didn’t back the lending with appropriate collateral and security.
Secondary, the decision of the Federal government to maintain a Treasury Single Account (TSA) for all government funds also posed a challenge to the banking industry. The days of easy deposit mobilization is gone and the need to move to the larger market to mobilize fund and expand credit has become obvious.
Still in the credit industry in 2015, there have been strong advocacy by the Institute of Credit Administration for the establishment of National Credit Guaranty Corporation to permanently take care of the challenges that small and medium scale enterprises in the country face. If there was such corporation in place and some of the bank debtors in the categories of SMEs, the banks would only need to approach the national credit corporation, who will together exercise all available means of recovering the facility before publishing the names of debtors. That would make life easier for the banks.
Also in the outgoing year, the role of Assets Management Corporation of Nigeria (AMCON) was in the front burner. Is the AMCON still relevant? It was not established to exist forever. AMCON’s role of buying off all the toxic loans of the banks has not strengthened the credit management system of the banks. They cannot continue to use taxpayers fund to buy toxic assets. It is a big issue in the credit industry. That backbone, which is AMCON, is likely to go away because some banks deliberately ignore their role and allow a credit account to become extremely bad with the intention to transfer to AMCON. That must be stopped.
Away from the banking and credit sector to the national scene, how would you access the year?
The good thing that has happen to Nigeria politically is a new government. So many things had happened that were completely detrimental to the interest of Nigerians in the last 16 years of the Peoples Democratic Party (PDP). The blame has been laid squarely on the lack of political leaders to enforce the rule of law, which has bred the big monster this administration is tackling headlong – Corruption. The law must be made to bite, irrespective of who is affected.
2015 was a successful year given that a ruling party, which lost an election, successfully transited power to an opposition. I also pay strong tribute to President Muhammadu Buhari for his personal quality that earned him the confidence of Nigerians. That I want him to always remember. He must not let Nigerians down.
His administration has started well by ensuring that it takes the focus away from the oil sector, which has been the fulcrum of the country’s economy in terms of revenue, with the way the oil price has gone down unimaginably. One of the ways was going after those that have looted billions of Naira from our commonwealth. If I was the president, I wouldn’t let them go, I will recover all the loot because it is a major source of income to the government in this dire times.
They may not give you everything but if you put what you get from four or five people together, it is already more than the income you will get from the oil sector. Efforts must be geared towards going after those that deliberately looted this country and the president must be supported in this campaign. The ICA stands firmly behind the president in his drive to recover looted funds.
Also looking at the political space and recent developments in my home state, Kogi, I see so much hope resting on the shoulders of the young man INEC has declared winner of the election. Bello has been condemned to perform in office going by the developments that led his emergence and I believe he will surround himself with experienced people across all sectors to move the state forward.
What are your projections for 2016?
2016 is going to be much more eventful in terms of drive for development and economic consolidation by government. It is the first full year of the Buhari administration, which will run on a fresh budget. And the feeler the international community is getting from the current presidency is positive, which is a huge plus to the country. I see a bright light at the end of the tunnel for 2016.
The effect of the high exchange rate is taking its toll on citizens, especially in an import-driven economy and
government has already advised Nigerians to expect some hardship in the new year, what picture does this portend for 2016?
When a child is being spoon-fed for years and a day comes when you said I am going to remove that spoon, there will be a natural reaction of outcry. When you asked me about my outlook for 2016, I said it was positive and I am optimistic about it, but it will not come into being by mere wish but all our hopes are hinged on the courageous steps the president is going to take to return the state of the Nigerian ship to an upward direction.
There will be opposition no doubt from those who are talking from political camps and those whose interests have been affected by the change mantra, but you can’t stop a determined purpose-driven government. No matter the outcry, you have to make some sacrifices. There is no two ways about it.
For instance, one of the hardships the government is taking about is removal of fuel subsidy. You and I know that we are only subsidizing corruption and some import merchants. As an Institute, we say this is the finest moment to remove fuel subsidy. At the same time, we way to soothe the initial pain from the subsidy removal is to get one or two refineries working. Price is not the problem of Nigerians but availability.
What is important however is for government to have credibility. If a government official is saying something, do not just lie to the people, say it as it is. Like when the Information Minister said the fuel scarcity was caused by panic buying. For goodness sake, panic buying lasting almost two months. There is no need to tell lies to Nigerians because sooner than later, the lies would be discovered but it would have caused the administration huge embarrassment.
Coming back to the outlook for 2016, I see it still very bright but not without some challenges. What people are saying is natural. If you listen to that, Nigeria will not go forward. If Nigeria must go into radical change, it definitely will affect almost everybody. What is important is focus from our leaders, meticulousness and working genuinely to serve the people.
What role will the ICA play in nation building and your plans for 2016?
Part of the things we intend to do in the new year is to collaborate with the judiciary on how cases involving credit should be expedited on. There is need for expediency of action and delivery of judgment on cases involving creditors and debtors in all sectors of the economy.
We will also work with the lawmakers at the National Assembly and organize public discussions where some sections of our laws that need amendment or replacement with new ones can be deliberated with various stakeholders and members of the public. Our lawmakers may not know how some sections of our laws affect the economy and Nigerians; it is our duty to bring this to their attention. This way, our legislators will be more informed about how some sectors of the economy work in relation to credit management. It is very important for professional bodies and institutes to engage members of the National Assembly through the various committees as part of our role in nation building.
We will also work with the executive by engaging the ministers. There is what we call ICA Meets The Press monthly. It is our intention to pick on ministers and bring them to this place in the full view of the nation’s media to explain issues to the people. That we believe will impact on the portfolio performance of the ministers. We want to draw their attention to where the problem is and for them to tell Nigerians what they are doing or intend to do.
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