Experience, they say, is the best teacher. “In arriving and leveraging on what has been the experience in other places is,” therefore, “not a bad strategy,” says Mr. Patrick Akinwuntan, the Managing Director of Ecobank Nigeria, while proffering roadmap to leapfrog mobile money operations in Nigeria.
According to him, to make the initiative work very well in Nigeria, “there should be collaboration because the field and the opportunity for growth is huge.”
In this interview, he x-rays and forecasts what 2019 has in stock for the financial sector.
For us as a bank, we have done so well financially. We have demonstrated ability, first, to be a true intermediator. The role of a bank in mobilising funds from the surplus parts of the economy and funding areas where there is a shortfall that needs capital and support for economical activities. We have played that part significantly, whether as a group or Ecobank Nigeria. As Ecobank Nigeria, we have a balance sheet in the region of N2 trillion. And that shows that we have demonstrated the ability to be a reliable keeper of customers’ funds and a reliable supporter of people who borrow money to do their businesses or to do their activities. We have continued to grow the net value of the company. Our shareholders have confidence in us to continue to invest adequately in order to carry on our businesses. We have seen various rounds of recapitalisation in Nigeria. Ecobank has always come through them strongly and we have demonstrated that as a bank, we take prudent management of customers’ and shareholders’ funds very seriously. We are a very strong product of corporate governance and ethics that guide our operations in dealing with our internal activities; in dealing with our relationship with customers and in dealing with our regulators.
It is true that in terms of a long term vision, the way you rate the bank that has the mandate that Ecobank has is not exactly the same way you rate one man entity. We are a global player, a pan-African bank that has a long term vision to move to the next level of realising our dreams. We are doing well but we need to do better. We never can get complacent. There are challenges, which have to do with doing business in Africa, not only in Nigeria, because we do not operate in a vacuum. We operate within an economy; within the society. But what we have proven is that as long as the society is carrying out economic activities, there is a positive role for Ecobank to play. So we are present in all these countries because of our diversification in different regions; in different levels of economic growth; in different levels of economic environment. In some countries, interest rates are going down, in some countries, interest rates are going up; in some countries, the currency is strengthening; in some countries, the currency is devaluing. That diversification we have achieved through our geographical spread and through the vertical integration between the multinationals, SMEs, the medium scale companies and individuals and households has really helped us to continue to improve from one year to another. But there is much more work to do; we will like to bring back savings to every household; we will like to be the platform of choice for every business in Nigeria and Africa.
There is still much work to do but we are on the right track.
For us, as I have explained, we look at the fundamentals. We look at Nigeria: the population is there, we look at the demography of the population; over 50 per cent are less than 30 years old. That speaks to growth potential. It does have its challenges, but in terms of economic activities, it demonstrates the huge viable market with growth potential. If you look at the intellectual capacity within the economy, this is an aspirational economy. An economy where an average participant believes strongly he or she can do better. Therefore, for us, the focus in Nigeria should remain on the fundamentals.
One: Infrastructure; power, rail in order to harness the significant potential; the growth of an intellectual economy; Nigerians are very resourceful people; participation in services where you use your intellectual capacity, leveraging on the internet; leveraging on digital access available globally.
Nigeria should continue to focus on becoming the top player globally. It is not by accident that the Facebook founder came to Nigeria. It is not by accident that the telcos have grown exponentially in Nigeria. It is not by accident that the level of internet and broadband growth is at such a high pace in Nigeria. We need to focus; it is not by accident that our Nollywood products dominate not only the continent now but becoming globally accepted. Talk of box office performance of various productions out of Nigeria now, you talk to somebody who is less than 25 years, he would struggle to understand that western films and Indian films used to be what people trooped out every weekend or every night to go and watch in Nigeria. Now, we export those things. It is true we have oil, but oil should be our base. We should focus on various areas we have comparative advantage and go ahead to realise our potential as a country. Pick even fashion, Nigeria has set a standard in the simple matter as the kits worn by footballers at the World Cup and you could see the difference and the willingness of people to pay for something created out of Nigeria. In the arts and culture areas, we are naturally a leader and we should explore it significantly. Kenya is exploring tourism, Ghana is also exploring tourism; Togo has focused on being the relevant port for commerce within West Africa. We have so much potential in Nigeria. I think what Nigerians should begin to focus on discussing more are the opportunities we have and really highlighting where we have comparable advantage and doing it to scale. If you pick any of the countries we refer to as doing well, what they have done is concentrating their energy in their areas of advantage and making sure that anywhere in the world, you refer to them as their own way of attracting Foreign Direct Investment, creating employment and making sure that the future is bright within their country. So for us in Nigeria, the discourse should be around the fact that we have opportunities in these areas because we have a young demography. A demography that reflects youth, education and health as well as anything around basic food, basic nutrition and areas of growth. In various ways, there have been efforts. Effort has been focused on agric; the ability to feed ourselves and reduce the amount of imports on rice, and various drinks. Not too long ago, bottled water was being imported. But now, there are a lot of Nigerian entrepreneurs doing it at good health level. So any of these areas that we can scale, we should focus on our areas of competitive advantage and use the scale of production to bring down inflation; to bring down cost of doing business and to bring down interest rates. On the long run, for the productive sector of the economy to be funded, the cost being funded needs to be affordable. And this is even the ability of Nigerians to communicate. My own input is that we focus on our areas of strength and keep discussing till it becomes a global reference.
Payment Service Banks
In the area of financial inclusion, the development of Payment Service Banks (PSBs), for us at Ecobank, we collaborate with Fintechs and the participants in the economy. It is true that it could be viewed as increased competition, but competition in itself is not negative. It will actually reduce the overall cost of participation because more capital is being pooled to the sector and the scalability of the sector is still there. We have less than 60 per cent of the population fully banked. If you talk about active financial participation, the percentage would be less than 30 per cent because we have various levels. We have the banked; we have the under-banked and then we have the unbanked. If you add the under-banked and the unbanked, we would be closer to 70 per cent. So the opportunity is there for more scale participants. We have demonstrated in various countries; in Ghana, in Cote d’Ivoire, in Benin, in Togo, in Liberia, in Kenya, in Rwanda, in Uganda and in Cameroon; that we have the ability to collaborate well with telcos that have participated in the space.
In Ghana, we partnered with MTN to even provide treasury bills, investment opportunities to individuals straight from the mobile phone. At the end of the day, participants need a strong bank as the final repository. We look forward to collaborating with participants in this space. When I give example of Accion, it was a collaborative effort. We have the ability to work on our own but we also understand the value of collaborating. And we will embrace collaboration in the evolving market space that we are looking forward to in Nigeria. I think it is a bold step by the Central Bank of Nigeria (CBN) and it is a commitment to bring financial services to every household. Because that aligns with our commitment at Ecobank, we will participate positively in furthering that agenda.
Banks vs Fintech
Well, I think it is well known fact that banking is not where you go but what you do. In the past when you said you want to do any banking service, it was unanimous to travelling from one location to the other. But now, banking has turned to your finger tips.
And we believe that increasingly, banking itself will become more affordable; more available, but the differentiator will be increasingly the effectiveness of the customer service that the bank brings to bear in adding value to the financial transactions being carried out by its customers. But the definition of who is your customer is being expanded from the person who has an account in your bank to the person that uses your financial services. So you look at ATM; ATM is inter-operable. So if you have an account in X Bank, and you come to use Ecobank ATM, you are my customer because you are using my service and if you are happy with the service, it reflects positively in your confidence in Ecobank brand and, therefore, the concept of who is your customer is being expanded significantly.