Post by Trade facilitator on Feb 4, 2013 22:34:20 GMT 1
Mr. Robert Ungwaga Orya is the Managing Director, Nigerian Export-Import (NEXIM). In this interview with OIBOH PETER and Anthony ada abraham, he reveals how the bank under his leadership since 2009 adopted a strategic direction that transformed it into a performance-driven institution. He also asserts that the NEXIM remains vibrant even as management sees the bank like any other enterprise and not purely a government agency.
Tell us a little about the NEXIM Bank?
The Nigerian Export-Import Bank (NEXIM) was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a share capital of N50 billion held equally by the Federal Ministry of Finance incorporated and the Central Bank of Nigeria (CBN). They own equal proportion of the bank’s asset. As at today, the CBN has fully paid it’s N25billion while the finance ministry is yet to fully pay its own.
We provide finance, risk bearing facilities like credit insurance and guarantees and trade and market information. And then when I came on board, I introduced other financial services to assist some SMEs that have good initiatives but cannot reduce it to approved bank financial proposals capacity that enables them to attract the needed financial support from banks. In a nutshell, we are the trade policy bank of Nigeria.
NEXIM seems to have now woken up, what inspired that?
When I came in I met a total non - portfolio of N14.6 billion. Out of which N10.32 billion was by far lost in lines with presidential guideline. In fact shareholders of the bank have forgotten about the bank because over the years there was no return on their investment.
Paid up share capital from January 1991when this bank was set up till August 2009 when I came in, it was between N15.85 billion. That was what I met in the books. And this amount was further depleted by accumulated loses to N9.3 billion. So there was no money to operate with and the staff I met on ground had significant skill gaps, some of them could not understand and speak the language of the industry.
As a result, most banks had severed relationship with NEXIM bank. In spite of all these, the operating costs were escalating and there was no money. It is not as if I’m not criticising the previous management but the fact is that they derailed from the mandate of the bank, which was set up to diversify the economy away from oil, but the previous management were lending to both oil and non-oil sectors.
So when we came in, we needed to have a strategic direction for the bank; by first of all finding out why the bank was in such kind a deplorable condition, why the greater proportion of the loan was bad, almost about 22 % these loans were bad whereas about 59. 09% of them were completely lost in the process.
And in the process we discovered that two pillars that one would ordinarily find in any good modern organisation to perform maximally were not there as they were lacking. There was clear lack of adherence to good governance structure and absence of a robust business management framework. Even in an ordinary small enterprises not even to talk of a bank, there is no way you can do profitable shop, track and mitigate risks, because there is no way things can be done in a proper structured manner. So what we did was to say let us have a strategic direction in place.
Like I said, we have two shareholders, which is the CBN and Federal Ministry of Finance. We then said no, the way this bank is now, if you meet any of these shareholders, it would be the same story, so we must come out with something that is convincing.
And because we didn’t have enough money at that time we decided to look at those non-oil sector businesses, just four of them that we believed have high growth potential in terms of generating jobs for Nigerians and foreign exchange. So we came up with a five-year strategic plan to reposition the bank and determined the sectors that we will play key roles in.
Part of it is looking at how to bring in highly skilled professional staff that would understand the technicalities of the international export markets. This is because at certain point they won’t be representing the bank as they are representing Nigeria, and they should be able to talk with confidence.
It was at that points when we came in that so many staff retired while others got employed and promoted. And we knew that going forward; we had to make this bank a performance driven entity. Yes, we know that we are a government agency, but we have commission retention right of the returns on investments made by the two government agencies that are the shareholders of the bank. But we must be able to justify the investment.
What was NEXIM’s specific turn around?
When we came in and started managing the company, not purely as a government agency but like any other enterprise, because we are a government agency in charge of trade policy as commercial orientation. And looking at the huge potential and opportunities due to the size of the Nigerian economy, we realised that there was a lot of under utilisation of the essence of the existence of the bank itself.
Thus, we needed to first put the bank on a strategic direction, and look at new people that can come in while looking at the positives and the processes to make the bank performance- driven. And then the two key pillars like proper governance and robust risk management structure that were missing in the bank were instituted in the bank. As a finance credit bank, it is not just about giving out money in form of loans to interested SMEs or investors but there are lot of initiatives the bank has to put in place to make it a stable and efficient trade facilitator.
So we came up with a strategic approach through which we ensured that the bank follows the customer to the market, in order to know what is happening to the loan. It is not just sitting in the office and say give him or her loan without caring to know what is happening.
Talking about monitoring the loans, how do you go about it?
What we do largely is to complement what the commercial banks are doing in the export sector. Thus, there is the need to do things right. It is not proper that most of people are involved in trading activities in the sector without recourse to formalising the process.
The first thing we did, however, was to say no, let us find a way of formalising these activities that are majorly done by the SMEs. For instance, if you get to Kano, you would find a number of people that are in trade across Borno State up in to Niger Republic and other neighbouring countries. Nigeria should endeavour to make her export sector more competitive so as to move forward as a nation and maximise the huge potential of the sector that is currently being under recorded.
Source: www.leadership.ng/nga/articles/46666/2013/02/02/nexim_committed_deepening_nigerias_nonoil_export_sector_orya.html
Tell us a little about the NEXIM Bank?
The Nigerian Export-Import Bank (NEXIM) was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a share capital of N50 billion held equally by the Federal Ministry of Finance incorporated and the Central Bank of Nigeria (CBN). They own equal proportion of the bank’s asset. As at today, the CBN has fully paid it’s N25billion while the finance ministry is yet to fully pay its own.
We provide finance, risk bearing facilities like credit insurance and guarantees and trade and market information. And then when I came on board, I introduced other financial services to assist some SMEs that have good initiatives but cannot reduce it to approved bank financial proposals capacity that enables them to attract the needed financial support from banks. In a nutshell, we are the trade policy bank of Nigeria.
NEXIM seems to have now woken up, what inspired that?
When I came in I met a total non - portfolio of N14.6 billion. Out of which N10.32 billion was by far lost in lines with presidential guideline. In fact shareholders of the bank have forgotten about the bank because over the years there was no return on their investment.
Paid up share capital from January 1991when this bank was set up till August 2009 when I came in, it was between N15.85 billion. That was what I met in the books. And this amount was further depleted by accumulated loses to N9.3 billion. So there was no money to operate with and the staff I met on ground had significant skill gaps, some of them could not understand and speak the language of the industry.
As a result, most banks had severed relationship with NEXIM bank. In spite of all these, the operating costs were escalating and there was no money. It is not as if I’m not criticising the previous management but the fact is that they derailed from the mandate of the bank, which was set up to diversify the economy away from oil, but the previous management were lending to both oil and non-oil sectors.
So when we came in, we needed to have a strategic direction for the bank; by first of all finding out why the bank was in such kind a deplorable condition, why the greater proportion of the loan was bad, almost about 22 % these loans were bad whereas about 59. 09% of them were completely lost in the process.
And in the process we discovered that two pillars that one would ordinarily find in any good modern organisation to perform maximally were not there as they were lacking. There was clear lack of adherence to good governance structure and absence of a robust business management framework. Even in an ordinary small enterprises not even to talk of a bank, there is no way you can do profitable shop, track and mitigate risks, because there is no way things can be done in a proper structured manner. So what we did was to say let us have a strategic direction in place.
Like I said, we have two shareholders, which is the CBN and Federal Ministry of Finance. We then said no, the way this bank is now, if you meet any of these shareholders, it would be the same story, so we must come out with something that is convincing.
And because we didn’t have enough money at that time we decided to look at those non-oil sector businesses, just four of them that we believed have high growth potential in terms of generating jobs for Nigerians and foreign exchange. So we came up with a five-year strategic plan to reposition the bank and determined the sectors that we will play key roles in.
Part of it is looking at how to bring in highly skilled professional staff that would understand the technicalities of the international export markets. This is because at certain point they won’t be representing the bank as they are representing Nigeria, and they should be able to talk with confidence.
It was at that points when we came in that so many staff retired while others got employed and promoted. And we knew that going forward; we had to make this bank a performance driven entity. Yes, we know that we are a government agency, but we have commission retention right of the returns on investments made by the two government agencies that are the shareholders of the bank. But we must be able to justify the investment.
What was NEXIM’s specific turn around?
When we came in and started managing the company, not purely as a government agency but like any other enterprise, because we are a government agency in charge of trade policy as commercial orientation. And looking at the huge potential and opportunities due to the size of the Nigerian economy, we realised that there was a lot of under utilisation of the essence of the existence of the bank itself.
Thus, we needed to first put the bank on a strategic direction, and look at new people that can come in while looking at the positives and the processes to make the bank performance- driven. And then the two key pillars like proper governance and robust risk management structure that were missing in the bank were instituted in the bank. As a finance credit bank, it is not just about giving out money in form of loans to interested SMEs or investors but there are lot of initiatives the bank has to put in place to make it a stable and efficient trade facilitator.
So we came up with a strategic approach through which we ensured that the bank follows the customer to the market, in order to know what is happening to the loan. It is not just sitting in the office and say give him or her loan without caring to know what is happening.
Talking about monitoring the loans, how do you go about it?
What we do largely is to complement what the commercial banks are doing in the export sector. Thus, there is the need to do things right. It is not proper that most of people are involved in trading activities in the sector without recourse to formalising the process.
The first thing we did, however, was to say no, let us find a way of formalising these activities that are majorly done by the SMEs. For instance, if you get to Kano, you would find a number of people that are in trade across Borno State up in to Niger Republic and other neighbouring countries. Nigeria should endeavour to make her export sector more competitive so as to move forward as a nation and maximise the huge potential of the sector that is currently being under recorded.
Source: www.leadership.ng/nga/articles/46666/2013/02/02/nexim_committed_deepening_nigerias_nonoil_export_sector_orya.html
