Chief Executive Officer, Accenture Nigeria, Mr. Niyi Yusuf, talks about the Nigerian business environment and the economy. He spoke with ADEMOLA ALAWIYE
Doing business in Nigeria has been tough. Nigeria is a developing economy; we don’t have the infrastructure in place. I mean you look at the World Bank report on doing business, you will see where we are; the number of steps it takes to open a business and get access to credit. But because we are a developing nation, we know there are challenges to face. The greatest challenge we face is that of talent. There is a small pool of talents in Nigeria. We graduate people every year from the universities but those guys do not have the skills that are required in the business world.
Are you satisfied with the financial market?
No, we surely can do better. The regulators and operators know there are opportunities to do more. We need to bring in more people to the banking sector. If we have a population of 160 million people, 117 million telephone subscribers and you have 30 million account holders, then it’s a huge gap. Theoretically, you have 80 million people that have phones and don’t have bank accounts. So they need to bring those people into the banking sector.
Financial inclusion is something we need to do. Insurance, as a ratio of Gross Domestic Product, is low. Insurance penetration is low; not many of us have insurance products. Many people don’t buy life assurance; some people have houses and they are not insured. Insurance is a good pool for long term funds.
Capital market is also low, we have less than five million retail players in the capital market, yet we are more than 30 million in the working class. In other markets, capital market is used to raise cheap funds. Another thing is that the companies that have big muscles are not quoted. How many GSM companies are quoted? The same goes for oil companies?
How can government make these big companies to quote on the Nigerian Stock Exchange?
Fundamentally, it’s a free market. Money will go to the best place and interest will chase the best return. If you make our capital market attractive in terms of raising funds, companies will come to the market to quote. Every investor or business executive is looking to maximise shareholders’ value.
Today, the GSM companies get loans from banks and parent companies while they know that they can get cheaper funds from equity from the NSE. The next issue is making it easy for them to list. What are the listing requirements? Can we give them listing requirements? For instance, when we licensed GSM companies, we gave some conditions that made it attractive for them; the government gave them five year tax holiday. I will argue that the NSE should look for incentives that will make it attractive for them to come. All these companies have listed somewhere except Glo. So, they are not averse to listing.
How can the NSE and Securities and Exchange Commission convince investors who lost huge money in the past to return to the capital market?
We all need to understand that investment, whether in the capital market or anywhere, is a serious thing. Before you buy a share, you need to do due diligence. Most of us went into the capital market because people were buying stocks, so we joined the bandwagon. The NSE and SEC need to do a lot of investor education. When you buy a stock based on family support, that is not an investment decision, it’s a family support and that’s an emotional decision. The SEC and NSE should also ensure transparency in the market.
The Monetary Policy Committee has kept the benchmark lending rate at 12 per cent at 10 consecutive meetings; what’s your view on this?
Lending rate at 12 per cent is high and the Central Bank of Nigeria understands that. But I think the issue is why it is at 12 per cent and not three per cent or four per cent like we have in other developed economies. There are structural issues and if these issues are not resolved, we may not get it right. Looking at 12 per cent is just looking at the symptoms; you need to address the underlying cause.
What is your assessment of the cash-less policy?
What the industry has achieved with the cash-less policy is phenomenal. It’s absolutely incredible in my own view but there is still a lot to do. The banking industry needs to continue to work on it. I’m close to the industry and I know they are committed to doing it. Eighteen months ago, we had less than 13,000 point of sale terminals in Lagos.
Today, we have over 100,000 machines. Some people made that investment; it’s in their interest to get their returns. It’s taking a while, I understand. There are challenges, but you should also know that they are not in control of power, telecoms and other things. It’s unfortunate that there are other issues that the banks are not directly in control of.In what ways is Accenture helping other companies to grow?
Accenture is a $28bn company listed on the New York Stock Exchange. It has presence in over 120 countries. We provide three kinds of services – management consulting, technology and outsourcing to clients. Our clients are businesses and governments.
A typical project is where we help clients to diagnose a problem. We try to find out if it’s a technical problem or a people problem. We then work with the clients to design what the new process should be. Once that is done, we walk with them to maintain that technology. So that’s an ideal process.
Our mission is to help clients to become high performing. Accenture is a transportation company. We move a company from one location to another. So, if a client is in Ibadan today and says that its new strategy is to move to Ghana. Accenture will work with them and help them move to Ghana. That will mean helping them to put the processes in place or the people in place.