RMB tasks govt on improved private sector partnership

The need for government at all levels in the country to create the enabling environment for public-private partnership (PPP) to thrive has been reiterated as panacea to overcoming the financing challenge of infrastructure development.

The Co-Head, Infrastructure Finance, Rand Merchant Bank (RMB), Ato Gyasi, made the call in Lagos, at the fourth edition of the ALP seminar series titled: “The Role of Infrastructure and Project Finance in Developing Nigeria’s Economy: Challenges, Strategies and Solutions.”

Meanwhile, Standard Chartered Bank said it has become imperative to strategise against risks associated with credit, foreign exchange and operations, with respect to investments inflow into the country.

The bank, which co-sponsored the fifth EuroFinance conference on treasury, risk and cash management in West Africa, noted that strong focus on risk management and tools/strategies that can help companies mitigate it is urgent with the rising level of investments from the Asian countries.

But Gyasi, who was among the panelists at the ALP seminar, also stressed the need to develop the required capacity to manage PPP deals in the country, to stimulate infrastructural development and growth.

“PPP means different things to different people, but we must have a common understanding of what we want. The second thing is to get the framework right. We all need to play by the same rule. So, government can’t choose when to go against the rule. If the framework exists, we just need to play by those rules,” he said.

According to him, PPP in Nigeria are more challenging and takes longer to execute, but “I keep saying that the key thing that must be done in Nigeria is capacity development. I think the private sector really wants to work in Nigeria, but there is need for capacity development.”

RMB, a full-fledged investment bank in Nigeria, is a subsidiary of RMB in South Africa.

“By market capitalisation, we are actually the largest financial institution in Africa. Our market capitalisation is just around $20 billion. I think we have had the opportunity of being involved in a lot of PPPs from roads, rails, prisons, power assets and others.

“We were very fortunate to be involved in the Lekki toll gate project. RMB’s role on the Lekki project was as a financial adviser,” he said.

Speaking on the challenges being faced at the Lekki toll gate, he said: “Everybody knows that road is a public good and that means that every individual should have the right to use the road. One of the basic tenets of such a road is that there has to be an alternate route.

“And that was part of the principles upon which Lekki toll was constructed. Sadly, Lagos State government did not fully fulfil its obligation to provide an alternative route.

“People should use the toll gate because they want to. If I feel it is going to take me 30 minutes to get to where I am going and I have to pay N100 that should be a choice that I have to make and not an obligation imposed on me. Sadly, that is not what is obtained at Lekki and that is why it has become a political issue,” he added.

However, delivering a presentation titled “Creating a successful Strategy for Renminbi”, the Director, Renminbi Solutions at Standard Chartered Bank, London, Jing Liu, explained that Chinese investments are becoming highly sought in West Africa, with attendant implications for treasurers in the region.

According to Liu, the Renminbi’s role in global trade has been expanded by China’s increasing import and export trade flows offshore.

He noted that in addition, over the past year, the Nigeria’s apex bank has moved some foreign exchange reserves into Renminbi from dollars.

“Treasurers, thus, need to understand the Renminbi, and how its increasing global profile affects their operations,” he added.

Also, in the session titled: “Liquidity Management Essentials in West Africa”, the Corporate Sales Head, Transaction Banking, Standard Chartered Bank Nigeria, Ibude Guobadia and the Head of Tax and Treasury at British American Tobacco, Nigeria, Abisola Adefarati, harped on the critical role of cash management as a cornerstone of treasury management.

While sharing their experiences on best practices for corporate liquidity management, they noted that it can help companies improve their respective intra-day liquidity, despite restrictions placed on different currencies in different countries and the drop in oil prices.

The Executive Director, Corporate and Institutional Clients, Standard Chartered Bank Nigeria, Remi Oni, expressed optimism that with the quality of topics and conversations at the EuroFinance conference, companies in the region would be better equipped to the face the challenging operating environment.