By Frank Odinukaeze
The Association of Corporate Affairs Managers of Banks (ACAMB) organised the 1st national stakeholders conference with the theme: Promoting synergy between the banking industry and the organised private sector (ops).
The conference brought together the movers and shakers of the banking industry and top players of the organised private sector.
The objective was to find a lasting solution to frequent disagreement and distrust that has come to define banker – private sector relationship over the years.
Some of these disagreements range from arbitrary deductions ,dubious service charges, difficult and administrative bottlenecks on loan facility ,high interest rate and unrealistic demand for security for procurement of drafts, amongst others.
From the quality of attendance ,it was clear the two sectors were poised for a very serious discussion on on how to foster mutual understanding got the benefit of not only the sectors but the economy as well
Speaking at the event the National President of the Nigeria Association of , Chamber of Commerce Industry and Mines and Agriculture ( NACCIMA) Ide John Udeagbala represented by architect Ayo Osunkeye, noted that as the Nigerian banking sector struggles with market operational reform’s and regulatory challenges in a bid to ensure sustainability as profit making entities, the private sector holds the key of access to Finance. He said the private sector’s position is well captured and articulated in various National policy documents of the micro small and medium enterprises (SMES) by the small and medium enterprises development agency of Nigeria (SMEDAN)
“According to this policy document,some of the major challenges faced by Nigerian enterprises are as follows: on the average the small enterprises have low operating capabilities and huge scales gap in terms of management, technology, knowledge and attitude” he said
The NACCIMA president made distinction between necessity entrepreneurs and opportunity entrepreneurs.
“There is predominance of necessity entrepreneurs over opportunity entrepreneurs.
“It takes weak infrastructure especially in terms of transportation and work space, they lack a collective voice and have relatively weak influence for policy formulation .they have cold assets to vital resources especially finance “he stated.
Udeagbala argued that the small enterprises are beset with a lot of challenges as enumerated earlier.He told the gathering that it’s not enough to form synergy but the workability of the synergy is critical to any discussion. He therefore submitted that the conference need to find answer to this puzzle. And that is :How can promoting synergy between the banking industry and the organized private sector (ops) ensure the promotion of collective voice and increased influence on policy formulation for the private sector as well as increased access to vital resources especially finance? He noted that these are two critical challenges that if not resolved will cascade into areas that will promote sector productivity and growth.
“Before I proceed further, it is important that I make a distinction between the private sector and the organized private sector.the former is a global perspective of every enterprises formally or informal that conduct business in Nigeria. The later is an organized collective that seeks to provide a voice for the former in terms of advocacy, business development and trade promoting”he said
He noted that under this classification ,it becomes difficult for the small enterprises to obtain funds directly from banks without passing through the (SMEDAN) and these are challenges that the intended synergy must address. He noted that in the same economy, banks are declaring huge profit while industries are declaring losses.
The Apex bank responded and argued that overtime they have made interventions to the organised sector through the commercial banks.
Deputy Director Ebuak Ezulu. Who represented the CBN governor Godwin Emiefele equally accused the organised sector of money laundering. He said people get money from CBN but don’t return the money .The money they made in their businesses outside are not brought back to Nigeria
He blamed corruption and structural deficiencies as major reasons for the parlous state of the national economy.
On their part the Nigerian Employers Consultative Association (NECA) represented by Mr Wale Oyerinde ,hinged their argument on the need for all inclusive growth and natural development.
“While making profit is fundamental to every business it’s also important that while we make profit we equally allow for inclusive growth “he said.
He said while the economy is growing the banking sector, we should also be looking at how to drive growth in every other sector of the economy.
He argued that the need for collateral and other forms of security almost seems as exorbitant.
“The bureaucracy and the volume of documentation required,and length of time between application for finance and disbursement.However,as we echo this concern,we also realize the whole huge requirements that takes place in ensuring the protection of the banking industry,from issues that may affect their sustainability,such as an expression of non performing loans” he submitted.
Speaking at the occasion,Mr. Ifeanyi Oputa ,of the Nigerian Association of Small and Medium Industries (NASMI), argued that the banks particularly the Central Bank,(CBN) are making life difficult for the SMES by passing through their back to release money to those who might probably not use the fund for productive purposes at the expense of those who really need the fund.
He blamed the CBN for indulging in actions that stifle the growth of industries and businesses in Nigeria.
While speaking from the banking perspective, Rasheed Bolarinwa,the initiator of the conference and leader of ACAMB,said the conference was organised to foster smooth working relationship between the banking sector and the organised private sector (OPS), because if there is no cordial relationship between the Bankers and the organized private sector ,the economy will suffer.Therefore the conference hopes through this medium, there would be harmony between the OPS and the Bankers for the progress of the economy.
on their part,the Manufacturers Association of Nigeria (MAN), represented by Mr.Ambrose Oruche who stood in for the president of MAN,noted that the share of commercial loans to the manufacturing sector to the aggregate loan to the economy averaged 0.1 per cent from 2017 to 2021.This according to him limits manufacturing activities in the country in terms of investment and production.
Speaking in an exclusive interview with MMSPLUS,Oruche said unless something was done urgently,a lot of industries would go down soon.
He said government need to do something quickly to address the situation.
On the request for licence made by the Association to the government to import diesel from Chad and Niger,he said nothing has been done in that regard
” We have not received any discussion with government on that.But we are hoping to open channel of discussion to see how that can be done”he said.
On the synergy with the banking industry,he noted that it is a step in the right direction.We agree and believe in the synergy, otherwise we won’t be here.We are trying to form a synergy between the banking industry and the organised private sector,in order to improve the business environment”he said.
Observers are however sckeptical about the new found love between the OPS and the banking industry.They hinged their argument on the .inter play of market forces and banking regulatory rules amongst other fears.While the move for collaboration and synergy is laudable,it remains to be seen how the whole move would play out.The banks need the private sector for financial .stability,while the private sector need the banking industry to stay afloat.None can stand alone.