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Mr Ahmed Kuru, the immediate past managing director of Enterprise Bank Limited in this interview with LEADERSHIP, spoke on a wide rage of issues focusing on how Nigeria can fast-track its development
How do you view the current political changes?
I believe it is welcome development. Generally speaking if you are successful at something the only guaranteed growth and improvements under any circumstance is change. Not just any change but positive change. We must embrace change as an antidote for retrogression. It is the only way to hold leaders accountable and make them agents of change. Success alone cannot and should not stop change. Once you are successful at what you are doing and you want to sustain the success you must continuously be reviewing your methods and strategy. In our own case there is a lot of gaps and that is why people voted for change because the existing situation is not sustainable.
There seems to be a lot of expectations and potholes waiting for this new administration. What do you think?
It is a known fact that most of the issues at stake are familiar to most people. The whole essence of leadership is to make the citizens happy. Any thing outside this is politics. Therefore government must have its priorities set right. In our environment everybody is an expert on all issues. Proposals, position papers, suggestions, commentaries and all manners of things spring up from self-styled experts from every direction. A leader should not allow “busybodies” to determine its programme.
Fundamental issues at stake has been broadly captured by the principal leader to include economy, security and governance. These are broad areas that cover unemployment, poverty eradication, insecurity, power generation and distribution, and most importantly education.
Education is the invisible ingredient necessary for growth. The quickest way to a sustainable economic development is through education. Training opens our eyes to our weaknesses, boosts our self-confidence and exposes us to new and efficient ways to achieve our aspirations. We must build positive energy
How about governance?
Government must work. We have to adopt modern management best practices to run government institutions. It is as simple as that. We must spend a lot of time to build institution. We cannot effectively fight corruption without building strong institutions that can resist corruptive tendencies by individuals. If we only go after individuals they will device ways and means to hide. Therefore our priority is to strengthen all the institutions, including those that are expected to be in the vanguard of fighting corruption.
Corruption and indiscipline must be confronted head on. Anybody that is indisciplined has the tendency to be corrupt. The moment you start jumping traffic light it is a clear signal that something is wrong with you. The rule of law is key to good governance. We must come up with a good framework for income distribution. People must earn income that “can take them home” under any normal situation.
How do we ensure that people earn such income?
It requires a total overhaul of our system. It cannot happen overnight when we are still unable to pay the minimum wage that we all know cannot sustain a family of four. We must identify the low hanging fruits and develop a quick strategy on how to move our people towards agriculture and SMEs. Unless you produce you cannot improve the welfare of the people. Our educational system should be retooled more towards producing entrepreneurs rather than people looking for employment. Government must embark on massive infrastructural development to generate work . Fundamentally there is nothing wrong in borrowing, particularly externally.
If you look at Dubai and United States that we always want to use as a point of reference you will discover that their developments are propelled through leveraging. What is important is judicious utilisation of borrowed funds and the monitoring mechanism. We must encourage our people to take risks, be competitive and seek knowledge. You can never get people out of poverty without knowledge. Therefore we must build the private sector by making it efficient.
How do we develop our economy?
We must go back to the basics. Our top most priority is to diversify our economy. Fixing power should be our priority, but is not an end in its self. We must build a nation through knowledge, innovation and rule of law. In the first instance, we must fix governance. The need to fix governance goes beyond stopping stealing. We must make it efficient to support private sector initiatives. The bureaucracy requires a total overhaul. The economy should be diversified to attract private capital to support mining, agriculture, and small scale industries. We must be competitive. If you over protect your industries without identifying areas you have comparative advantage you will only encourage smuggling.
There must be a strong performance management framework around government activities. Government must be run like a business. Officials must be accountable on the basis of the KPIs agreed with them and financial institutions must be compelled to perform a key role here. There must be more emphasis on developmental issues. Government must come hard on those institutions and individuals undermining our exchange regulations thereby weakening our currency. If you remove the indiscipline currently embedded in the financial, oil and gas, and civil service activities, a fresh breath can create an enduring path for growth.
Government must focus on the activities of the financial institutions. They are the catalysts of economic growth anywhere. The industry have failed to build capacity in the micro, small and medium enterprises sectors because of the drive towards big tickets. Setting aside intervention funds , whether in agriculture, aviation, power or industrial activities, etc, has statistically not proven to be an effective approach. People see this funds as grants from government. Financial institutions can definitely do better here. They have the spread, capacity, workforce, expertise and resources to engineer real economic growth. The CBN can play a key role here. Another very important area is taxation. We must build an efficient tax evaluation and collection system. A lot of work has been done in this aspect but more needs to be done. Most Nigerians do not pay tax or the correct amount of tax. This is totally unacceptable. Advanced nations without natural resources rely on tax collections for development. When you encourage people and businesses to pay tax, whether PAYE, income tax, company tax, custom duties etc, they will demand that government work for them. You can’t pay proper tax and government will not provide basic necessities that will make you happy as a citizen.
How do we empower our graduates?
The tragedy of the situation is that due the falling standard of education generally the quality of the graduates leave much to be desired. We should have a crash programme on how to train and empower them for self employment. Where I was working before, we introduced a product where the only requirement for a banking facility are your educational credentials (documents) and a good business idea.
We put the applicants, usually in their hundreds, through a course programme on how to run a business. Those that pass our evaluation at the end of the programme were granted banking facilities.
It will not be a bad idea if the last three months of the NYSC programme is dedicated into putting the corps members through a crash programme on how to access funds and run a successful small business so that by the time they are discharged, those that want to start something are introduced to banks that would have participated in the programme, and banking facilities are extended to them. They can access these facilities by only depositing their original educational and NYSC discharge certificates.
With what is happening in the North East how do we integrate them back into the economic system?
The challenge there is beyond economics. One needs to visit there and interact with them to be able to understand the depth of the problem. The situation on ground is beyond what is being reported. The education system there has totally collapsed. Children have been out of school for more than five years. Businesses have closed down. Loved ones have been lost, displaced and deformed. It is only the resilience of the people and the leaders at the local level that is keeping them going. The states governments are really overwhelmed. You know how it is in areas that are conflict free, talkless of conflict zones. Government at the federal level need to declare an economic emergency and work closely with the states governments and multilateral agencies on how to reintegrate them back and quickly close the gaps.
I get seriously worried about the educational gaps. You cannot achieve anything without education. We need to have a retreat and come out with short, medium and long term strategies on how to deal with the issues. Armed robbery became more prevalent in Nigeria after the civil war. We need to avoid a repeat. The states governments need to be commended because they are taking the direct heat.
It is generally believed that one of the “killers” of business in Nigeria is the high interest rate being charged by financial institutions. How do we deal with that?
The interest rate you charge on facilities is usually determined, amongst other things, by your cost of funds which is complicated by high operational costs. Unless we increase production, empower people and subsequently encourage savings, it may be difficult to reduce the rates through the instrumentality of profitability.
However, on the basis of sacrifice, the Committee of Bank Managing Directors can still do a lot by bringing down interest rates through moderate projections of profits. They should work with shareholders to understand this. Our financial institutions are amongst the most profitable in the world, although the possibility of facilities getting delinquent is also high here. If you give an entrepreneur a facility at the rate of 25 per cent, given the volatility of our market, the possibility of the facility getting sticky is high.
I believe government needs to seriously engage the commercial banks by making them direct agents of poverty eradication and financial inclusion. They should forget about the rhetorics. Quite a lot of things happening with the economy are attributable to their behaviour and they can do something about it, particularly when an appeal is made to their patriotic sense.
How do we introduce change in a system that is not working for Nigeria?
The most important thing is that everybody seems to have embraced change. People opted for something different but that something different, for majority of Nigerians, is not more than food, shelter, cloth, rule of law and dignity. We need to find a mechanism through which we pay labour appropriately.
Two most important areas that government, with the private sector, must tackle immediately are housing for all and efficient public transport system. These two areas will remove a lot of burden on the people, leaving only the issue of living allowance. Besides, the process of providing these two key services will generate a lot employment.
Government must identify key “change agents” to help drive the process of change. We have quite a lot of competent and brilliant Nigerians with character both locally and in diaspora. We shouldn’t fall into the trap of the past.
Even the traditional institution are getting more relevant in the welfare of their people by getting involved in contemporary issues. One has to appreciate the contribution of leaders like the Emir of Kano who is hands-on on the issues of security and economic emancipation of his people and Nigerians.
Nigeria has been identified as the preferred destination for the emerging market. We must be ready to attract direct foreign investment and be careful not be a dumping ground for cheap products. Any company that is interested in our market should be encouraged to set up their manufacturing operations here. But we must provide an enabling environment for investment.
We shouldn’t be a consumer market only because that is what is destroying our currency. We have to protect local industries by encouraging them to be globally competitive. Because of improved technology, raw materials, including oil, are easily extractable almost everywhere now. The world will not wait for us. We have to drag the future backward. It is our only survival strategy
