Founder of Vintage Vantage Advisory, Canada, Mr. Kenneth Aigbinode was among the elite group of experienced and top-rated bankers recently conferred with the prestigious Fellowship of the Chartered Institute of Bankers of Nigeria (CIBN). He has over 35 years of experience in top management and board positions in the financial services and telecommunications industries. He has traversed the merchant, investment, and commercial banking space. His exposure also includes collaboration with offshore banks, multilateral, and continental institutions on structured finance.
He has immense experience at top management level at various financial institutions, including Fidelity Bank PLC, NNB International Bank PLC (now Unity Bank PLC), Nigerian American Merchant Bank, and Owena Bank PLC. He also served as the Central Bank of Nigeria’s nominee director in the orderly winding-up of Assurance Bank in 2005 as part of his national contribution.
How do you feel about this brand-new CIBN Fellowship award?
I am grateful to God for all the grace and love He has lavished on me, particularly with my supportive family, wonderful friends and colleagues over the years, and unique opportunities to showcase His gifts. I feel humbled by this award knowing that I am a part of an outstanding group of professionals honored to be designated Fellows of the Chartered Institute of Bankers of Nigeria. I am grateful for the recognition just as I am motivated to continue to strive for excellence in my beloved banking profession – in or out of active engagement.
What is your assessment of the Nigerian banking industry today? Are banks living up to the expectations of their stakeholders? Are you pleased with today’s operators given that you once actively operated at the highest level in the industry?
The banking industry in Nigeria has been resilient considering its multifaceted challenges over the years. Recently, of course, technological developments have necessitated more agile responses, and the industry is in a state of flux from transitional migrations necessitated by these changes. We have seen the rise of non-traditional exchange vehicles, like cryptocurrencies and other blockchain-based innovations and tokenization. The banking industry has grappled with quite sophisticated and evolving cybersecurity challenges. We have seen the ascension of disintermediation fostered by technology and a host of nimbler fintech-spurned competitive dimensions hitherto thought farfetched. You can add to this pile, macro-prudential, systematic, systemic, and idiosyncratic risks requiring deft navigational skills and solid grounding as well. Given the heightened volatility across financial markets from post-pandemic and geopolitical externalities, I daresay the banking industry in Nigeria has shown some robustness and adaptability, at least, as viewed from a distance.
Recently, there has been a proliferation of fintechs rubbing shoulders with Deposit Money Banks. Kuda, Opay, etc., are increasingly gaining market share. Is this a good development within the context of the CBN’s financial inclusion policy? Are these fintechs being well monitored and regulated?
Walls and silos are crumbling around us from relentless technological advances and applications, as I highlighted earlier. Any form of insularity and regulatory lethargy will be severely penalised today. Tech’s ubiquity and unrelenting changes are such that national or domestic controls will always lag the market. Traditional players, regulators, and indeed the entire banking and finance ecosystem must be proactive. The universe of transactional exchanges has been progressively dematerialized and for good. We are in the era of challengers. Incumbents who fail to see this and react swiftly will suffer the fate of the dinosaurs.
Electronic banking is still not where it should be in 21st century Nigeria. Transactions are either delayed or completely missed. What is the way forward?
Electronic banking in Nigeria does not exist in a vacuum. It is situated in the same well-acknowledged and relatively deficient infrastructural environment. We also have layers of problems such as technological illiteracy, lack of a robust national connectivity backbone, anemic public power supply, and pervasive poverty. The resourcefulness of our financial institutions through their unique workarounds is commendable. Believe me, our transactional banking platforms are at par if not better than what I have experienced in more advanced environments.
Why are banks not investing substantially in ICT platforms that can make lives easier for their customers? Why is cyber fraud so prevalent in the industry?
Nigeria is outside the top-twenty cyber fraud prevalent countries, thank God! We need to keep improving but our concerns may be relatively exaggerated here. Of course, we want zero incidents but that’s not realistic.
The FITC used to play a major role in developing human capital for the banking industry. Standards have dropped in banks. Is the FITC still relevant? Do banks still believe in training the way it used to be?
Perhaps the FITC is less visible as a trainer today and there is always room for improvement. You see, the banking industry’s horizon has evolved significantly given developments in digital banking and on other fronts. Training curricula, requirements, and delivery have also evolved. By implication, any institution in the learning value chain that has stayed static will become irrelevant. Virtual training platforms, proctored testing, and online credentialing are truncating moribund approaches and syllabi. I agree that pervasive short-termism and misaligned return-on-investment computations analyses to justify capacity building investments have impacted investment in human capital development in the industry. But such leadership myopia will become more expensive in due course – kind of like cutting your nose to spite your face – pardon the cliché. Technology substitution and increasing application of generative artificial intelligence would foster the temptation to deemphasize investment in human capacity-building,but I am confident that certain aspects of banking will continue to require human inputs. To that extent, the old aphorism – garbage in, garbage out – will be quite trite here.
The quality of leadership in our banks has degraded. Some bank CEOs who became CBN Governors didn’t perform well. Is this a reflection of the overall deterioration in Nigeria, or it is a function of issues raised earlier?
Oases are rare occurrences in deserts. In our context, very few institutions, or more appropriately, very few individuals, can defy the lure of lucre or resist the intoxication of transient power. Let’s not confuse a lack of preparation with a low or broken moral compass.
How has the CBN fared in the last 20 years about the formulation of monetary & credit policies and their impact on the economy?
You have asked a very broad question covering a long span. Twenty years is a long time. I hope this is not a carbon-dating question to situate my age. But seriously, if you look at our macroeconomic indices and the standard of living at the micro level, and across the horizon, there is a strong temptation to conclude that CBN’s policies have left us a bit short, over time. The last eight years saw a diffused focus at the Central Bank away from the fundamentals of central banking mandate. The outcome of that lack of focus has handed today’s incumbents a poisoned chalice. Hopefully, the situation is remediable given the overall quality, experience, exposure, and the apparent focus and determination so far exhibited by the current leadership. I pray we see a moderation of the obsession with daily foreign exchange rate movements and a focus on the full mandate embodied in the CBN Act especially that of ensuring financial stability. In today’s world of social media, you do see a lot circulating and I came across some graphic depicting the most profitable companies in Nigeria in 2023. That list of 10 corporates was dominated by banks. If my recollection is right, only Dangote Cement and BUA punctuated that list. That is an anomaly that has fed from years of distortions on forex rates and government crowding out the productive sector. Nigeria is too young to transition to a services-led growth. As a banker, I can tell you that the income statements of banks are easy to decompose and analyze and we want to be serious about reforms, that is one place to start.
Given our experience with the immediate past CBN Governor, especially with the ill-fated naira redesign/cash withdrawal policy, some analysts have called for a review of the autonomy of the CBN to limit the powers of the CBN Governor. What do you have to say?
It is my understanding that the current Senate is already reviewing the Central Bank Act of 2007 and perhaps the distinguished senators will be looking at the extreme abuses that result from such autonomy and ways to tackle specific lacunas. The temptation is great to throw the baby out with the birth water given our recent experience. Interestingly, the International Monetary Fund has recently advocated the strengthening of the autonomy of central banks as indeed is best practice globally. I shall err on the side of caution by maintaining the autonomy of the CBN but enhance accountability through the oversight roles of the legislative and executive arms of the government. Sadly, when other organs are compromised, then we are caught between Scylla and Charybdis.
Which areas would you prioritise if you were appointed the CBN Governor or Finance Minister?
Of course, this is a highly hypothetical question considering that my good friends and former colleagues in the industry have recently been appointed to steer the affairs of the apex institution and the finance portfolio. I know a couple of the incumbents quite well and they have impeccable pedigree and solid preparation. One main piece of advice that I am tempted to advance is that they cure the populace of the preoccupation or obsession with daily foreign exchange rate movements. This bears repeating.
They should stay focused on the general mandate of stabilizing the financial system, and allow the market to play its role, as they model outcomes through the instruments available to the CBN. It should be unacceptable to encourage arbitrageurs by allowing a gap of over 5 percentage points between the retail and wholesale markets no matter how couched or designated. We must resist the temptation of crude fiat controls because they never work in the long term.
We should continue to broaden financial inclusion by leveraging technology and encouraging innovation. I would advise that we diversify our economy from the current over-reliance on oil proceeds but in concrete terms and I have some ideas in this respect. We should also manage our vulnerability to global oil price fluctuations more proactively through appropriate hedging – this is crucial. As much as I am not advocating the dollarization of our economy, the exchange rate index used in the Federal Budget should be reviewed dynamically and should not be static as currently obtains. We need more transparency on this front. We need to offload some assets and further streamline redundant hiring in the public sector. These suggestions are driven by the urgency of Nigeria’s current economic context and are based on general economic principles. Implementers will need to be bold and courageous given our dire situation.
What have you devoted your time and attention to since you ‘retired’ from banking?
You never really retire from ‘banking’ once you have been privileged to serve at the C-suite levels. The bulk of my employment was in the credit and marketing area before the decomposition and unbundling of hitherto compound roles into today’s lending, investment banking, structured credit, advisory, and various other specialisations as currently delineated. You received comprehensive training as a one-stop shop for the customer or client.
I was the chief credit officer in three banks. I ran credit training programs graduating several senior bankers at various levels of leadership today. Some of the skills you learned and used are generally portable and I have found them useful in running two telecommunication firms, leading strategy in a major insurance firm, and playing governance roles regionally and beyond Africa. I currently run Vintage Vantage Advisory which is focused on supporting Diaspora innovators and start-ups targeting the African market in the areas of medical technology, renewable and sustainable energy, and virtualizations.
The Japa syndrome seems to be a double-edged sword that can favour Nigeria or mar its development. What’s your take?
I think that labor mobility is ultimately somewhat of a virtuous cycle. We often tend to narrowly define the japa syndrome as people physically emigrating or relocating from Nigeria. Many skilled Nigerians are physically based in Nigeria but actually live and work elsewhere virtually or online. We are training global citizens and should be proud exporters of their skills. Diaspora inward remittances from Nigerians have trended upwards of US$ 20 billion annually in recent years. As this inflow source grows, we can creatively securitize the funds for development purposes.
Some of the world’s biggest corporations are managed by Asian immigrants with net benefits to their original home countries. Considering the platforms offered by technology, increasingly it will matter less where you are physically located as new universes are created. We should focus on creating an enabling environment for peaceful progressive living and continue to invest in our people and our country to improve security, infrastructure, the reward system, and ultimately the retention rates. Capital always seeks the best rates of returns for risks undertaken in a free market setting.
