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COVID-19: ‘What govts, banks should do’

Dr. Lawrence Olusegun Aina, OFR

Dr. Lawrence Olusegun Aina banker, turnaround expert, is the Chairman of Odu’a Investment Limited. In this interview with Gbenga Aderanti, he speaks on the state of the company and other related issues. Excerpts:

We have heard so many stories about Odu’a Investment Limited such as the conglomerate not being able to make profits; subsidiaries being moribund and board room bickering among others. What is the situation like in the organisation now?

There is no doubt that every organisation goes through several phases of transition towards fulfilling its mission and vision. And as a conglomerate with significant public interest there will necessarily be differing views on approach and expected outcomes. Odu’a investment has over the years been making profits although not at a level consistent with assets employed thus there is a lot of room for significant improvement. That is the situation with O’dua Investment Company Limited at the moment. Inactive companies with their idle assets need to be made active and productive. The need to reposition the company and the Group necessitated the resolve by the Shareholders represented Governors of the six owner states to have a fundamental overhaul of the corporate governance practices to align with best practices as some of the existing practices may have been responsible for the stunted growth of the organisation. One of the outcomes of that resolve is the appointment of the new Board members made up of professionals in diverse fields, experienced private sector operators, and eminent personalities in their own rights, to breathe fresh ideas to the organisation, create a new path and roadmap as we are committed to creating commensurate value for shareholders with enormous social impact.  We were inaugurated on 7th May, 2020 just 6 weeks ago, have had three intense Board meetings and have assessed the state of the organisation with a view to determining strategies to position it to fulfill its mandate as the platform for the economic development of South Western Nigeria.

How are you going to address the myriads of challenges facing the organisation?

Following the mandate of shareholders, the Board is committed to restoring, repositioning and restructuring Odu’a and its subsidiaries to enhance their performance, profitability and sustainable growth necessary to meet and surpass the expectations of all stakeholders. The new Board is working assiduously to quickly put the organisation on a new pedestal of growth and global reckoning. Before the new Board was inaugurated, the shareholders commissioned KPMG to carry out an assignment on corporate governance and organisation re-design among others.  This would rejig the corporate governance and foster best practices in the Group. A shared vision of a great company marked by profitability, competitiveness and professionalism is also being enshrined in the organisation. Furthermore, a Board strategic retreat which will include Board and Management of all subsidiaries has been scheduled for July 2020 to draw up the roadmap and strategy for the next 5 years.   The new mantra of the company  is to change the orientation from been managed and perceived as a government agency which it is not to an enviable private sector conglomerate that can stand tall among similar benchmarked institutions such as UAC in Nigeria, Temasek Holdings in Singapore, State Investment Corporation of Mauritius and others.  This means re-creating our vision and strategic goals and ambition.

You were a banker, administrator who had held many leadership roles at institutional, national, regional and global levels etc. Many would have thought you would have had enough. What attracted you to this present job?

It is a call to service, a great opportunity to be identified, recognised and invited by the six owner state governments to serve on and lead the board of a conglomerate such as O’dua Investment managing the economic interest of the six owner state governments made up of Oyo, Ondo, Ogun, Osun, Ekiti and Lagos states.  No doubt I am currently involved in providing leadership in other various national, continent-wide, and global assignments and roles but a clarion call to serve the South West States was very compelling and is a very worthy contribution to regional and national economic development. My colleagues and I on the Board together with the management staff would be bringing to bear our collective knowledge, network, expertise, influence, wealth of experience, integrity, vision, intellect and business acumen needed to instill investor confidence and lift the company as a key contributor to the growth of the economy of South-West and Nigeria in general

Some chairmen had it so good with the Group Managing Director/CEO of the conglomerate while others were not. What do you think could be responsible and what strategies are in place for a smoother tenure?

The current Board is focused on the future and has so far received the cooperation and support of management led by the Group Managing Director. Team spirit is very key with the tripod of Shareholders, Board and Management working with a common purpose, setting clear objectives and expectations and all joining forces to deliver. My role as the Chairman is like a conductor of an orchestra harmonizing and bringing the best in everyone. I am expected to be a bridge-builder and consensus builder among these three key groups with the GMD/CEO being involved and engaged in managing the company and the process. Above all, the board and management will operate based on the principle of corporate governance and best practice, shared responsibility, accountability, and with the best interest of the organisation at the centre of every decision.  The Board’s role is to provide needed oversight, guidance and direction and not be involved in micro managing.

The political leanings of the owners, one way or the other affects the decision-making of the conglomerate. Do you see the organisation surviving another 30 years?

With the interactions this Board has had with the shareholders represented by the six governors of the owner states and the charge they have given us together with their body language and steps taken before our appointment and after, we have seen a great sense of commitment, passion and sincerity towards changing the fortunes of the Company. You will note that all the six governors have credible track records in business and their professions before they became governors. The commitment of the shareholders is focused on seeing O’dua investment run as a private company competing with the best organisations. Before the constitution of this board, the six governors who are not all of the same political party worked perfectly as a team to address the challenges of the company and took very fundamental steps towards creating a glorious and more impactful future for the company. The engagement of KPMG for a fundamental review and overall of the company’s governance practices was done by the six governors and one of the major outcome was the determination of sound criteria for and requirements for persons to be appointed to the Board, including creation of independent Non-Executive Director positions as well as two new Executive Director roles aimed at not only strengthening executive capacity but part of a Group wide succession program. Even though shareholders are represented by governors who are political office holders, since our appointment, I have seen no trace or any attempt at undue interference in our decision making process and focus for the future. O’dua Investment is 44 years old and with the current initiative and strategic direction, I am confident that the long term survival of the company is assured. In this regards we must acknowledge the contributions of the various Boards and various GMDs since inception of the company who had all contributed to sustaining the legacy and the common heritage up till this time. I will like to say that I came from an environment where we live and breathe value creation.  I believe that when it comes to wealth, we are contributing to creating that.  There is a difference between government and business irrespective of ownership, business is meant to thrive, grow and be profitable.

At a point, some of the subsidiaries of the conglomerate were running at a loss. From your experience, what do you think was responsible for this? What plans do you have for this not to reoccur?

There are many reasons why some companies succeed while others fail. With strong organisational redesign, and governance framework of the Group level, O’dua Investment Ltd will be able to support all subsidiaries to thrive and make acceptable profits. We have also commenced a plan to examine what has happened to the inactive and moribund subsidiaries and idle assets with the view to making all assets of the Group contribute to the revenue line. Also, management and board evaluation and assessment and application of technology to drive operational and long-term financing to fund growth initiatives will help a great deal. The board of O’dua will strengthen its oversight functions on subsidiaries, embark on vigorous business review, review of the performance of subsidiaries, seeking for credible and competent partners and review the investment strategies. It seems better to own 10% of a highly profitable company than 100% of a non-performing and loss making company. Our renaissance agenda and growth plan will be based on three planks- improve contributions of functional subsidiaries, resuscitate or sweat the assets of inactive subsidiaries and create new lines of business and new subsidiaries in growth sectors of the economy particularly in agriculture, technology and so on. For instance, the Group has created the Southwest Agricultural Corporation Ltd which will take off soon. Investment in technology sector especially digital to create employment, promote entrepreneurship and encourage a culture of innovation in the South West will be next.

Nigeria has continued to lose investment opportunities to other West African countries. What do you think can be done to stem this tide and attract investment into the country?

To stem the tide and attract investment into the country, the government and private organisations have major roles to play. Security issues are fundamental, business only thrives in a secured environment and no investor would put money in an environment that is not secured, the public-private partnership model that respect sanctity of agreement must be in force. Critical infrastructures such as power and efficient transport system need to be in place as soon as possible. Various measures that can encourage investment such as various incentives to investors operating in high risk sectors and business vital to economic growth and development goals would also be very important in this regard. We must also use agriculture to drive import substitution, encourage local production and leverage on digital technologies.

Government would need to also sustain the anti-corruption gains and continue to put policy in place that would make doing business in Nigeria a memorable and profitable adventure. It is hoped that the ease of doing Business program of the Federal Government will result in significant new investments for Nigeria. But as a region, the governments of the states of the Southwest Nigeria need to also come up with ease of doing business pronouncements and companies such as O’dua Investment and others to benefit from friendly and supportive enabling environment. Regional projects and development programmes supported by all the six Southwest states should be embarked upon.

In a depressed economy like ours, right now, what would you be telling the banks and government?

The governments and the banks must focus on empowering the informal sector that dominate the economy, focus on onboarding the 36% Nigerian adult population that needs to be economically empowered, efforts on creating massive employment for the teeming youths must be intensified, the cost of governance needs to also be addressed to reflect current economic reality while diversification leveraging technology and digital tools must be given the desired attention.

Many banks are complaining that they can’t continue with their present wage bills and would be better to downsize but the CBN said “No.” Do you think the CBN has the moral right to stop banks? What do you think these banks should be doing right now?

CBN and banks have always found common ground in addressing grey areas as I believe the two entities would come to common terms on this especially the need for the regulator to provide policies and regulations that provide relief to banks at a time like this. Banks though regulated, are private organisations with investors seeking for highest return yet they have a responsibility to contribute to the society. We should seek a balance.

What do you think these banks should be doing right now?

With emerging developments dictating a paradigm shift for the future of work in this fourth industrial revolution, significant digital applications and new players offering unique and customer centric financial services, the forecast is that in the future, the society may not need banks or depend on only banks for all financial services requirements. This is what the self-regulatory innovation focused associations I head as President such as Fintech Association of Nigeria and Africa Fintech Network have been canvassing in recent years. Much of the skills existing in the space today are becoming obsolete as entirely new set of skills and competences are required for the workforce of today and the future. Hence, the onus is on the Banking professionals to acquire new skills, upskill and reskill, align their experience and qualifications with future needs. The current economic reality comes as a veritable wake up call for organisations including banks to review their operations and align their offerings to meet the dynamic needs of consumer most of whom are young and have different needs. Mind you, over 60% of Nigerians are under 35 years old. New players creating services and solutions that addresses our unique challenges and provide convenience for consumers have emerged, waxing stronger and already doing better and cheaper, some of the things that banks do.

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