Help, FG is killing NEXIM Bank
He then gave the board and management a charge: “Your appointment is coming at a very critical point in the history of the bank when its performance is less than optimal. I charge you with the task to transform the NEXIM bank into an arrow-head in government’s drive to boost exports and diversify the economy.” […]
He then gave the board and management a charge: “Your appointment is coming at a very critical point in the history of the bank when its performance is less than optimal. I charge you with the task to transform the NEXIM bank into an arrow-head in government’s drive to boost exports and diversify the economy.”
It was a simple charge already expressed in the functions and objectives of the bank. But the task of realizing the former minister’s demands may not be as easy as expressed. It is also expected that the charge would not be lost on the board and perhaps management if the objectives of the bank must be met.
Specifically, NEXIM Bank, established by the provisions of an Act of parliament, Act 38 of 1991, is set out to drive the foreign trade policy of the federal government of Nigeria. Its main focus is to help drive the export chain towards achieving favourable balance of trade for the country, boost employment and ultimately realise the desire of the nation to climb into the league of the 20 most developed economies of the world. Part of its functions include: providing export credit guarantee and export credit insurance services; provision of credit in local and foreign currencies to support exports; provision of trade information and export advisory services and provision of investment guarantees and investment services.
The challenge before the supervising minister now, Dr Remi Babalola, is therefore an indication that the performance of the bank should meet world standards. Investigations indicate that at the moment, the bank is trapped in unpaid loans to the tune of N10 billion, owed it by its customers. But the problems of the bank may be more than just debts owed it. There are contentions and perhaps questions regarding the inability of the bank to recover the loans, some of which were given out more than three years ago.
The bank was bedevilled by attitudinal problems. The question of laxity among staff cannot be wished away. Perhaps, too, the general belief that whether or not the bank rolls any profits, emoluments and other benefits accruable, to the staff would always be serviced through federal government subvention, has certainly not proved to be a motivation. The third reason, perhaps, maybe attributed to the fact that most of the employees appear to have influential persons behind them, so diligence, competence, commitment, professionalism and dedication to duty is rather compromised than honoured.
Every organization requires qualitative direction offered by a team of people of sound mind and intellect with sound judgements. Problem arises if the vision of the workforce in an organization is limited to thoughts of self-preservation and discipline or change is challenged by weight of godfatherism.
Management of the bank must sanitise the entire system. Management must be responsible for the day-to-day implementation of strategy and all managerial tasks, to look critically at the reasons that have affected the possibility of success. For a staff that is used to a particular way of doing things for the past 18 years of the bank’s existence, embracing change may be difficult but this must be.
Perhaps, to break out of the circle of failure completely, the federal government through the finance minister, Dr Olusegun Aganga must also avoid the pitfalls that have been instrumental in the collapse of many banks in the country. The banking industry is particularly not short of cases of failures induced by boardroom squabbles, corruption, inexperienced and greedy managers, etc as well as board members who price their personal interests above corporate interests. The failure, for instance, of Alpha Merchant Bank (Nigeria) Plc, Financial Merchant Bank Nigeria Ltd, Progress Bank Nigeria Plc, Royal Merchant Bank Nigeria Ltd, Pinnacle Commercial Bank Ltd, among others are classical examples.
First for a bank like NEXIM to record failure when indeed it should be growing in leaps and bounds is quite unsettling. That explains why the current MD, Robert Orya sounded a wakeup call. “Nigerian Export Import Bank must wake up to its responsibilities and show itself as a strong instrument of government and a dependable partner to individual and corporate bodies desirous of taking advantage of the abundant opportunities in export trade.”
Beyond Orya’s call, there is the urgent need for the shareholders of the bank – the Federal Government, to honour its equity obligations. Investigations reveal that out of the N50 billion due to be paid to the bank, only about N16 billion is believed to have been paid so far. This deficit of about N34 billion has a crippling effect on the ability and activities of the bank.
Kenneth Gwa lives in Abuja