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‘Borrowing without paying is robbing a generation’



Mr. Ade Ayeyemi is the Group Chief Executive Officer of Ecobank Transnational Incorporated, the parent company of Ecobank Nigeria. The consummate banker and helmsman of the pan-African lender with the highest footprint on the continent, has traversed the banking industry, with experience spanning several institutions and at various top management levels, at home and abroad. In this interview with the Assistant Editor, Finance/Economy, CHIJIOKE NELSON, he said the time is ripe for Nigeria and the rest of Africa to correct all economic distortions and integrate the continent as one big market.

What growth opportunities do we have in Nigeria and how can we get over the rhetoric of “potential”?
We have more than 180 million people. We have an economy worth about $500 billion in terms of Gross Domestic Product. We have the raw materials. We have the market and all the likes. So, a good opportunity is there. What we need now is to convert these opportunities into real actions and that is the work to be done by all of us, both the leaders and the led. It is important to make it a reality. We also need a disciplined environment, in which when people borrow money from banks, they pay back so that other people can borrow as well and we can have a much bigger economy going forward.

So, to me, am very bullish of what is possible in this country. We’ve been to Aba. There, you will see the quality of bags and shoes that my brothers in Aba can make from the hides and skins they buy from Kano and they sell them to the rest of West Africa. Just taken that as an example tells you what can come out of the people of this country. All of us, then, owe them the responsibility of creating the enabling environment for that to continue to happen. If we do that, I feel very comfortable with the future performance of the country, but nothing needs to be taken for granted. Of course, nothing would happen just because we wish it. We will have to work hard as people to make it happen. We have to be ready to pay our taxes to the government, because when we don’t pay our taxes to the government, then they will be borrowing large money from the banks and therefore, the interest rate would continue to be high and then we would not be able to borrow at the interest rate that would enable good capital formation to happen. So, all of us as a people, needs the discipline to be there, but what we can be, which we call possibility, is almost endless. I don’t normally use the word endless as an economist, but for Nigeria, it is endless.

So, how do you see the banks coming into play in all you’ve said now?
In all of this, banks should be willing to participate as financial intermediaries. Our job is to take savings and translate it into investments and in the process, we make money and investors make money and the savers make money as well. That is our primary job. Our second job is to enable payments to happen, so that there would be ease of exchange of good and services. These are the primary jobs that we are supposed to do. Now that job then means that we rely on the government infrastructure to create an environment in which there is respect for ownership of private properties. That ownership of private properties means that if I lend money to somebody, we expect the environment to enable me to pay back. If somebody uses something as collateral and he defaults on the loan, I should be able to go through the court system quickly and get it back. If inflation is more than 10 per cent, and it takes 10 years to solve a case in court, the outcome is useless and therefore, our court system has to ensure that they do things quickly because that is when it can become effective. If we don’t do it quickly, then it’s not effective. We need to be able to have an environment in which education is prized and people are trained properly, but all of this would happen when we create that conducive environment for private sectors to play, and banks are part of the private sector, not a public good. So, anyone that takes banks’ money away is worse than an armed robber. Of course, that person has taken away the dreams of the younger generations away. When I finished school, I could get car after six months, but now when people finish school today, I don’t know whether many of them even get jobs in that timeframe. So, our generation should not take the dreams of future generations away.

It appears there is some sort of tango between Ecobank and African Export-Import Bank. What is it all about?
We don’t have a tango, but we have a common ideal in trying to understand that we need to connect the people of this continent to be able to trade together. Afreximbank is about trade- Africa, export and import and intra African trade, so we’ve been working together on this common ideal. They have been our good partners and we have been good partners to them, because we have a platform that enables trade across 33 countries in Africa. Also, we have bank in Paris, a representative office in London, Dubai and China that also help us to triangulate international trade and intra-African trade. But one thing we noticed last year when we had the Africa-Africa dialogue was that payment was being difficult to be made across the continent. When a man in Zungeru wants to buy from another man in Timbuktu, he is not able to pay in naira in Zungeru to a Cefa in Timbuktu. So, we decided that if we come together, that Afreximbank can enable the convertibility of the currencies we can put at their disposal at the platform that we have, where we can exchange information across 33 markets. That’s what we just lunched and we think that it is the beginning of a good thing where we can have one single African market. We don’t have a single currency today, but the nearest thing we can do is to make sure of that convertibility, which is what Afreximbank is bringing onboard.

What extent has the initiative with Afreximbank reached?
What we did at the annual meeting was to introduce it to the market, but we need to have certain agreements with the governments and the central banks, which Afreximbank is facilitating and we want to be able to get this to the market within six months, so that people can start using it and continue to give update to the market with high frequency.

Nigeria just returned from recession and everyone knows that the return remains fragile. Banks are not immune to the situation. What is your strategy now to make sure that the Pan-African leadership status is there?
Our Pan-African leadership is because we have the largest spread. We are not the largest bank. But in terms of presence across the continent, we are the largest because we are in 33 markets. We intend to make sure that we do those things that we know and play to our strength in the places where we are well known. We facilitate transactions to happen. We don’t lend where we don’t have the right to be able to collect the money back and we support the economies where we operate. Whether Nigeria is in recession or not, it is the largest economy in the continent and we are a systematically important bank in Nigeria, so we will continue to play in this market. We are grateful to our customers in Nigeria. We are grateful to the central bank and the government and people of Nigeria for allowing us over the last 30 years to be a participant in the financial system. We never take any of those things for granted. We want to continue to earn the right to be the banker to the customers and the banker to the government.

Do you think that the Intra-African trade strategy that Afriximbank is pioneering is sustainable given the issue of the commodities that the continent offers and the level of infrastructural development?
You see, if you wake up and you say that it is possible that the rain will beat you, you will never leave your bed. Also, you can never cross a river by walking back to the shore every time you see that it looked like you are getting deeper. We of this generation, owe the people of this continent and the future generation the duty to create a market that is big enough, bring ourselves together and create the possibility of being able to do well. The fragmentation that we blame the colonialists for, which is now more 50 years, is no longer tenable. This is the time to right that wrong and be able to address ourselves as one big market. Yes, there will always be obstacles and challenges, but we should not allow that to define our future. Let us allow our dream, our vision and our courage to define our future, not our fears and timidity.

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