Mr. Roberts Orya
Managing Director/Chief Executive, Nigerian Export-Import Bank (NEXIM), Mr. Roberts Orya, has within three years of his stewardship succeeded in turning the fortunes of the institution around after lax governance and poor corporate governance culture nearly brought it to its knees by 2009 when he took over at the bank. In this interview with James Emejo, he discusses the rot in the bank prior to his assumption of office, the row over the $200 million entertainment fund as well as tangible steps so far taken to rid the bank of corruption and reposition it to achieve its primary mandate of boosting non-oil exports
Sir, what actually went wrong in NEXIM Bank?
In terms of staff and executing the processes; in terms of executing the mandate the man (former Managing Director) was given-they derailed from it. In terms of having a robust risk management framework, good corporate governance that can guide the day to day operation of that bank: In fact, there was no risk management. And that accounted for the huge non-performing account that we inherited. You know in any modern organisation, if these two key pillars are missing, there’s no way that the organisation can move smoothly, especially in a financial institution like NEXIM. They didn’t have a robust risk management framework. They didn’t have a good corporate governance culture. This was completely lacking and so how to even track the creation of new risk assets; how to even identify risk in a particular section and measures to be taken to mitigate them were not even there. If they get into sectors they don’t even know; they are swimming into stormy waters but they don’t even know, they just feel we are giving a loan.
And because we are in the business of providing finance and risk bearing to Nigerian exporters, we can’t be throwing the money away. If we are lending to the maritime sector, we need to appreciate the risk in that sector. What are those risks, what are those registrations we need to put in place if we have to cover our position? If we are going to cocoa, what will happen with the cocoa pricing internationally; what are the risks that they face? The cocoa processors-where are they going to get raw cocoa beans: if we have ageing practitioners in Nigeria, which country? Is it Ghana; is it Côte d’Ivoire and what are the risks, costs? It is only when you have a robust risk management framework that you’ll be able to identify these risks and then find some mitigants. Is it the risk that we can go in? Is it the risk that we can mitigate? So those things were not there. And I think that largely accounted for the huge non-performing account that we inherited.
What exactly did your predecessors do wrongly?
I keep saying that, I am not criticising anybody but my predecessors were also lending both to oil and non-oil sectors.
So what measures did you take to reverse the trend?
Okay, when I got in, I said look, these two key pillars- a robust risk management framework and corporate governance- must be in place and I must have very good human resource persons-because if you have these two key pillars and you don’t have professional and skilled staff, you won’t be able to drive the organisation. So, I needed to bring in very professional people and find a way of motivating them because as you know, NEXIM is an international bank but only localised because most of our transactions are foreign based. Again, I tried to have a clear roadmap. We have a very specific mandate. Our mandate is to diversify the economy away from the mono product of oil. So we needed to refocus on the non oil sector that we should be playing in. But because we didn’t have much money to intervene in all the non oil sectors, we decided to select the few that have high growth potentials, in terms of generating employment for Nigerians, creating wealth, generating foreign exchange for the economy and the one that will impact on the Gross Domestic Product (GDP) of the country. That was why we came up with the manufacturing, Agric, Solid minerals and services (MASS) agenda.
Are you saying proposals outside this agenda won’t attract your interest?
What will determine our intervention in a project is that they must have an export content. That is the determining factor that we must have an export content tied to it. You might have a project that is within MASS and don’t have an export content. So it is the export content that we look at. But what we have done is that no matter what sector you are looking at, that has an export potential, if you get to us, even if we cannot finance you; we would advise you on how best to go and that was why we set up an advisory services department so that when people come, and we cannot give them money, then we can assist them in putting together a bankable proposal which will make it possible for them to access money from any financial institution. Our own mandate is that any point in time, we should be seen to be channelling funds to the non-oil sector. So even if we don’t get any money here- if there’s any service that can enhance non-oil trade flows, it is our mandate and that is why you have seen that I am placing more emphasis on initiatives.
So what are you doing differently?
Over the years, we have given money upon money but we don’t follow our exporters to the market. So we don’t even appreciate those challenges that they have. So I can sit down here as an MD and give you one billion naira-but I don’t know the kind of problem you have in the market. And by the end of the day, the volume of the non-oil export will not increase. Going to the market with them makes you not only to be better informed, but also gives you an insight to the kind of problems your exporters are facing. Is it within your purview to overcome? If it is within your purview to overcome, it is not enough to just give out money and sit down-you would overcome that barrier for them so that they can enhance the volume of non-oil trade.
So, at EXIM Bank, apart from looking at finance, granting risk bearing facilities, providing trade and market information as well as financial advisory services, you must also continuously be coming up with initiatives that will influence the trade policy bank. The government looks at you as someone that is on the field to bring back that information to government and say for us to be able to break into this market, these are the risks and these are the kinds of risk mitigating instrument that we have to follow our exporters with. I tell you, transforming a place is total but you need some cardinal pillars to work with.
There have been criticisms bordering on lack of access to the $200 million entertainment fund which was unveiled by President Jonathan to boost the industry. What exactly is the situation?
You see, we came out with clear operating guidelines for the entertainment industry. We came out with sectors and those sectors were addressing issues of production, issues of distribution and then issues of exhibition clearly. I just hope that people in the industry would realise that what they are doing is a business but not a government subsidy. I keep mentioning that this Nollywood, even without support from anybody, they have been able to shoot themselves to number three in the world in terms of revenue generation and number one in terms of the number of films produced in a year. But people just want to criticise. A lot of people that stay there and criticise-none of them have ever come to NEXIM Bank. If they come to NEXIM Bank, everybody is talking about “DR BELLO”. Dr Bello is only one film; we are financing theatres; we are financing studios...only one film we have financed from that money, the rest is infrastructure platform. I am happy that some of the beneficiaries have started telling their friends in the industry that they have been able to access this money. We have financed distribution chains or I can say the exhibition because what we are trying to do now is that issues of piracy is a challenge and we believe that people should be able to take benefits for their efforts because right now there are lots of leakages. So, in NEXIM, we are not looking at funding the industry alone, we are looking at funding the industry and building capacity. So, in our capacity building, for us is to ensure that the efforts Nigerians are making are not wasted. NEXIM is collaborating with some agencies: we are working with lawyers, and the Nigerian copyright commission to organise a national workshop on how we can review the intellectual property laws and make them more responsive to ensure that they are enforceable so that some of these leakages can be blocked.
That is the role that NEXIM is playing which is beyond funding.
When I went to America for the premiering of Dr Bello in Washington, at the Kennedy Center-I spent two days there working with the intellectual property lawyers in America. Nigerians who take their work to America don’t make any money at all. There are leakages. The shop owners there would tell you that Nigerian law is not applicable here. So our people are not taking benefits for their efforts. So, it makes sense for us that because that work is in America-it has become an export product, and so NEXIM should be concerned. Are we actually using these products to increase the volume of export? What kind of support can we give? It is a regulatory thing but we are working closely with these people to see how we can collaborate and at least, begin to block those leakages. That is what we expect the industry practitioners to work with NEXIM. It is very amazing. Work with this bank that is helping to restructure the industry, rather than abusing and saying all kinds of things. But we at NEXIM know that there are potentials in entertainment. We are investment bankers; we have seen the potentials, but we don’t know how to make a film but we know how to finance a film and to identify a risk in a film: that is what makes you an investment banker.
You don’t need to be a pilot to finance an airline and you don’t need to be a medical doctor to finance a hospital. But by our training, it is for us to look at these opportunities and structure them in such a way that the people within that sector would be able to get the benefits required. The people who criticise don’t even know what Nexim has done but am happy now that the beneficiaries are coming out to defend the bank that are managing these funds. I believe people should always come and thank the government. The guidelines that we drafted, we discussed with the practitioners and the industry: we asked for their own input. And I think what the government has done is that you need to find the veterans there and even be acting as an advocacy group. In the next five years, where would this industry be?
Somebody would tell you that when you talk about EXIM Bank of India, how is that applicable...Bollywood 10, 15 years ago was in the same status. But these people came together, working with the financial institutions, working with the government, working with the serve bank of India: they have been able to come up with very creative and innovative products that even the people that don’t have collateral were accessing this. Those are the kinds of things I also expect them to sit down with us so that given the next two to three years, these boys that have talent but no collateral would be able to walk into a bank: would be able to tell government this is what you need to do. We must learn from other jurisdiction.
I don’t know where Nexim has gone wrong. Mr. President didn’t say the money was a grant. I just hope people would just wake up and be thanking the president for being visionary and proactive and by saying I look we have a lot of youths that have the talent and over the years I learnt that people have been exploiting them: I am putting this money down- come and borrow and pay back. When you borrow and pay back then we give to another person. The industry will expand, the industry will become structure and we create more job. If it were to be a grant, how would you even distribute the grant? I want someone to come out with a system on how to distribute the grant if it is a grant at all. We should begin to say let us invest whatever excess that we have in oil, pay attention to the non oil sector because it’ll make more money than oil: oil is a depleting asset. The oil will finish one day or you’ll have that oil there would be no maket.
How would you react to past allegations of corruption and mismanagement within the bank?
Well, in the past, you hear people say the Managing Director was giving out loans but I tell you those things will never exist in this bank again. Because when people get to know the kind of corporate governance structure that I have put down... And when I was doing it, people said things don’t work that way in government: that the measures I was putting were for the private sector not government institution. But I said No, that I want to put them in government. I said I know that we are a government institution but we have a commercial orientation: I am expected to pay dividends to my shareholders. I am not running the bank as a social outfit, I am running it as an institution that would play the role of development finance institution as well as pay shareholders. Some kind of measures that I have put here...when people say that they are stealing money in NEXIM, I laugh: anybody that would come after me, and you want to corrupt and enrich yourself, I give you thirty days, you’ll be in jail. You will see it because it would be so glaring, you can’t hide. In 2009/2010, when I came and saw that the bank was so bad, the internal control measure that I put in even my staff were begging that this bank would break. But I say No, that until we were able to get money.
So there is no single leakage here.
When I came in 2009, the official cars that were meant for MD’s office, I sacrificed, I was using my personal car. It was only January last year that I got a car: for over seventeen months, I used my own car as official car- it is there-people can come and look at the books. It wasn’t that we didn’t have money to buy ordinary cars, but I said no. People said they don’t do like that in government and I said somebody must start something different. Everyone that they give five years must have two set of cars when you come in, they depreciate these cars to four years, before your five years finish, you get another car. I am the only MD who would not get such cars...somebody must start something different in this country. We would not import people from other countries to come and restructure our economy for us. So there are no leakages in this place, except when I leave and another board comes and relax the structure I have put in place. People say this is your time in government-what time are they talking about? It was not because what we made was not enough to buy a new car but the bank was not in good shape. Everybody needed to sacrifice.
Because it is a big shame that Nigeria, which is the biggest economy with the highest demographic profile had an EXIM bank that was not performing: it was a shame to me and you.
We own this country and we should for once begin to take things personal.
I met a bank that the staff could not speak the language of the industry: Now, all the staff can speak the language of the industry. They are highly professional people drawn both from here and diaspora and motivate and training them very well and now we have a clear cut succession plan. That’s the way we should run our institution so that when you are not there, the measures you put in place would guide the operation of the enterprise.