Banks’ lending rate too high for business survival — CIFC boss

The Registrar/Chief Executive Officer, Chartered Institute of Finance and Control, Mr. Godwin Eohoi, in this interview with IFEANYI ONUBA, speaks on issues affecting the economy


 Why was this institute set up and what are its roles in the nation’s economy?

The institute was set up primarily to promote transparency, accountability, prudency in Nigeria’s economy. You may agree with me that most of the things Nigerians are doing that are unethical today is as a result of lack of finance and control.

Finance control in our economy will ensure development because there will be proper transparency in our financial system. The lack of proper control in our financial system, led to the problem we are having today in our economy. So we are here to promote ethical standards in our financial management system.

How can organisations and the public sector develop good internal control mechanism?

There is need for us to start having a different orientation on the management of our funds and other resources. Management of funds is the core of financial control. So if we can have people who are in position of authority and based on the orientation that people have got on how to manage resources in a professional manner, then things would improve and we will be able to block so many leakages.

Another area that an organisation should focus on is human capacity development in the area of finance and control for those who manage their finances. We always tell our members that if you are a financial controller who cannot manage reserves in such a way that should bring in more funds to the organisation, then your training and membership are questionable.

The CBN governor would be leaving office in few months time; how would you rate his performance?

Sanusi has performed well as governor of CBN. Most of the policies that he introduced since he assumed office have gone a long way in ensuring stability in the economy. For instance, the cashless policy has today been helpful in business transaction. It has also reduced the rate at which people lose money from armed robbery attack.

When he came into the banking industry, he exposed a lot of rots in the system and we can see that the banks are stronger and better now because he has been able to sanitise the industry.

Sanusi has achieved some very impressive results. He made the monetary policy very popular in Nigeria and is believed to have saved the financial system from a supposed imminent collapse by cleaning up the rot in the banking sector.

He has also introduced a lot of policies that are helping to shape the future of banking and monetary policy and economic management in Nigeria.

Nigeria’s economy is largely dependent on oil and we have not really done much to diversify the revenue base. What do you think is responsible for this?

We have so much depended on oil to the extent that it is hurting our economy and this shouldn’t be the case.

Nigeria would have been one of the greatest countries if we had effectively managed our resources. We have so many resources especially in the agricultural sector. But for the sole reason that crude oil sales would give us quick money, we all shifted our attention to that sector. This shouldn’t be the case.

We have neglected other sectors of the economy for oil. We have various sectors that can create millions of jobs and guarantee inclusive growth for the economy. A lot of attention should be given to agriculture especially in the area of agriculture value chains. That is where a lot of jobs can be created.

We can encourage people to go into large scale farming and provide a funding framework that would enable banks to provide fund at low interest rate for farmers. These loans should be easily accessible by farmers. Government should help the people to standardise agricultural system in Nigeria so that more jobs can be created.

Nigeria’s GDP is rising but we still have unemployment; what do you think is responsible for this?

Economically, we are not where we are supposed to be considering the resources at our disposal and our potentials.

We need to start addressing some of the things that are disturbing our economic growth. The problems we have are more of structural rather than cyclical. For example, one of the major issues is infrastructure. If we have power and roads, we can grow faster.

The largest contributor to our economy is agriculture and we are still doing that with manual labour. This sector needs power to process produce and even the roads are bad for the transportation of goods to the market.

So for us to move forward now, we should be able to concentrate on what we do and find ways of how to address these challenges. The problem didn’t start from the time of President Goodluck Jonathan. Our economy had been poorly managed during the military regime and this has made us not to achieve what we are supposed to achieve.

Although there are improvements now when compared with the military regime but the government should do more to generate jobs in order to reduce unemployment. There is still high poverty rate in the country. We have seen inflation reduce to single digit but more needs to be done to reduce unemployment.

Poor power supply is another major problem affecting the performance of the economy. A situation where companies are leaving Nigeria for South Africa and Ghana will not help grow our economy. We need to look inwards and develop our economy.

Nigeria over the past few years has had problem with budgeting; how do we address this?

We do not have problem in the area of budget planning but implementation. The implementation of budget is done with effective financial control mechanism. Implementation of budget should be based on performance by contractors not by just releasing money.

We need an effective monitoring and evaluation team that have the capacity and also be independent to determine the nature of job done and advise the government on the amount to be paid. Arbitrary release of allocation for capital projects will not ensure effective implementation of budget.

You said the CBN governor has done a lot in stabilising the banks, what role should the banks be playing?

The banks are now stable with the recent reforms of the sector. But they need to reduce the interest rate to lenders. This should be looked into to so that people can access funds for businesses. This is the only way to drive economic activities and help to create jobs. Our interest rate is still too high for businesses to survive and it should be looked into.

In what way has the institute impacted on the economy?

We have contributed significantly in the manpower development of this economy. We have produced members who believe in ethical standards and who are change agents in their respective fields.

We have members who are ready to raise the alarm when the need arises. A lot of our members have carried out transformation in various sectors of the Nigerian economy.

If you are found worthy to be made a member of the institute, we believe that you won’t have the mind to siphon the resources of the organisation into private purse.

So we have given our members new orientation and training in finance and control to be able to be good ambassadors of the institute in their various organisations.

We will not allow any member to be used for any corrupt practices and that is where the issue of ethics comes in. We have zero tolerance for corruption at the institute. For any member of our institute that is caught in corrupt practices; we will set up a panel to investigate and anyone found guilty will be severely sanctioned.

How do you monitor members and check quacks?

We monitor them by inviting them to training programmes from time to time. We run programmes that enable us train them and let them know the importance of ethical standards.

What collaboration do you have with other professional bodies and what has it achieved?

Yes, we have entered into so many collaborations with both local and foreign professional bodies in the areas of financial transparency and ethical standard. Also, we entered into a memorandum of understanding with the presidency under the special adviser to the president on ethics and values to promote ethics. Lack of ethic is what causes corruption and we are already discussing with government in this regard.

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