Waheed Olagunju: Legacies of BOI’s master strategist

BY EMEKA EJERE

The recent change of baton at the Bank of Industry (BoI) saw Mr. Olukayode Pitan, take over the leadership of the development bank from Mr. Waheed Olagunju, ending the latter’s short but impactful days at the top job for the second time in acting capacity.

The new managing director may have to work extra hard to satisfy the spectators who will not expect anything below the bar already raised by his predecessor in the pursuit of the goals of the industrialization-oriented institution.

Created in 2001 from the National Industrial Development Bank (NIDB), the Nigerian Bank for Commerce and Industry (NBCI) and the National Economic Reconstruction Fund (NERFUND) the bank was established with an authorized share capital of $400 million. Shareholders at creation were made of Ministry of Finance (59.4%), Central Bank of Nigeria (40.36%), with private sector taking the balance.

The bank’s vision is to be a leading self-sustaining development finance institution, operating under sound management and banking principles that would promote the emergence and development of a virile competitive industrial sector in Nigeria.

The mission is to transform Nigeria’s industrial sector and integrate it into the global economy by providing financial and business support services to existing and new industries in order to attain modern capabilities to produce goods that are competitive in both domestic and external markets.

Mr. Olagunju’s appointment for the first time as the acting managing director of the bank from 11th April to 16th May 2014 followed the expiration of Ms Evelyn Oputu’s eight-year tenure as the bank’s managing director and chief executive officer.

“BoI will continue to build on the solid foundation that has been laid under Ms Oputu’s transformative leadership style,” Mr. Olagunju said on assumption of office then.

Mr. Olagunju, moved up again in March 2016, from the position of executive director, Small and Medium Enterprises of the bank to the position of acting managing director/chief executive officer following the sack of several heads of parastatals and government agencies, including Mr. Rasheed Adejare Olaoluwa, his predecessor.

In a banking career that spans over two decades, Mr. Olagunju has consistently demonstrated an uncommon capacity and capability in successfully taking on higher responsibilities assigned to him.

His versatility is exhibited in the various positions he has occupied since he joined Nigerian Industrial Development Bank, the precursor institution to BoI in 1990 as a senior manager and rose to the position of executive director, Business Development in 2012.

Prior to Mr. Olagunju’s appointment as member of the Board of Directors of BoI in 2012, he served as the company secretary of the bank for 15 years (1997-2012) and as general manager, Strategic Planning and Corporate Communications between 2007 and 2012.

He was one of the architect and drivers of BoI’s outstanding turnaround and transformation into one of Africa’s best Development Finance Institution (DFI).

Mr. Waheed Olagunju was actively involved with the reconstruction of NIDB into BoI (2000-2001) and the consolidation of the mandates of NIDB and NERFUND into that of BoI and worked closely with the Federal Ministry of Industry and Messrs. KPMG, the consultancy firm that was engaged to handle the exercise.

In the early years of BoI, Mr. Olagunju coordinated the diagnostic study of the Bank that was undertaken between 2004 and 2005 by the Swedish Consultants (Messrs. Swedish Development Advisers) who were appointed by the African Development Bank.

He equally played a pivotal role in the implementation of their recommendations that formed a vital input into BoI’s paradigm shift that triggered the bank’s rapid transformation in 2006.

He has all along been a strong member of BoI’s Senior Management Team and later its Board of Directors that has been driving the bank’s highly impressive performance.

Under Olagunju, the Bank of Industry recorded the most impressive performance in its history in 2016 by posting double-digit growth in almost all aspects of its operations, with about N66 billion disbursed to hundreds of small, medium and large scale businesses.

At the 57th annual general meeting (AGM) of the bank in Abuja recently, Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah, said that the bank was able to consolidate on its developmental impact during the year under review, despite the general economic downsides across the country.

Enelamah, who was represented by the Protem Chairman of BoI, Mr. Olufemi Edun, said it was highly commendable that while several institutions in the country experienced a downgrade in their credit ratings in the year, BoI got a reaffirmation of its AA+ National Credit Rating accompanied by a stable outlook by Fitch Ratings.

He noted that Moody’s, which is another international rating agency also assigned Aa1.ng/NG-1 rating, the second highest of national scale rating categories to the bank.

He added: “Augusto, the foremost Nigerian rating agency similarly upgraded the bank’s domestic rating of A+ to AA- in 2016. This is a testament of the strong corporate governance and enterprise risk management practices that the bank has integrated into its operations. “In the year under review, the bank disbursed N65.9 billion to 737 micro, medium and large enterprises, which helped to create over 500,000 direct and indirect jobs.”

Explaining the fact behind the figures on the 2016 result, Mr Olagunju said the achievement also culminated in BoI’s consistently high rating by international and domestic rating agencies being upgraded and affirmed.

While Moody’s assigned BoI Aa1 in 2016 up from Ba3 of 2015, Agusto’s rating of AA- in 2016 was higher than A+ of 2015. AA+ assigned by Fitch in 2015 was affirmed in 2016.

“BoI’s outstanding performance in 2016, which has been described as the best in the bank’s history despite last year’s economic headwinds, was also due to the institution’s competent, dedicated as well as passionate management team and staff,” he added

BoI announced recently an operating Profit Before Tax of N17bn in 2016 which represents a 44% increase over N11.9bn recorded in 2015. The bank’s loans and advances also rose by 10% to N171bn in 2016 from N156bn in 2015.

Disbursements to small and medium enterprises similarly went up by 42% within the same period to N8bn compared with N5.64bn in 2015. The quality of BoI’s risk assets as well improved phenomenally with a reduction in the ratio of non-performing loans (NPL) to 3.72% in 2016 from 5.87 in 2015.

This feat was achieved in a year when the average ratio of non-performing loans in the nation’s banking industry rose sharply to 14% which is beyond the Central Bank of Nigeria’s threshold of 5%.

The Bank of Industry in January this year announced the launch of a N1 billion Solar Energy Fund to provide alternative and renewable energy for Micro, Small and Medium Enterprises (MSMEs) across the country.

Mr. Olagunju said the solar energy fund would afford small business access to renewable energy – a healthy and sustainable alternative to harmful fossil fuels. At a ceremony to announce the launch of the fund, Olagunju also said the scheme would provide long-term cost-saving advantages for beneficiaries.

“It was estimated that in 2015, manufacturers spent as much as N3.5 trillion to generate alternative power due to the challenges in the supply of public electricity,” Olagunju said, adding that the cost of electricity accounted for about 40 per cent of operational expenses for most MSMEs resulting in reduced profit margins, lack of competitiveness and generally unsustainable ventures.

He said MSMEs constitute the engine of growth in most countries. Therefore, the growth and development of small businesses are crucial to the level of industrialization, modernization, income per capita, equitable distribution of income, welfare and quality of life enjoyed by the citizenry.

Olagunju noted that the growth of the MSME sector in Nigeria has been hampered over the years by a combination of factors, one of which is poor access to reliable electricity.

“For Nigeria to, therefore, achieve sustainable and inclusive development, there is an urgent need to substantially increase the supply of modern and affordable energy services from sources that are affordable, accessible and environmentally friendly,” he said.

The BoI, which is already playing a role in providing solar energy solutions to rural communities across Nigeria, said that it has found it imperative to support the provision of sustainable and reliable energy for MSMEs. Hence, the creation of the solar energy Fund for MSMEs.

“We have successfully deployed solar solutions worth N240 million to six off-grid communities, one each in Niger, Osun, Gombe, Anambra, Edo and Kaduna States, under its pilot scheme,” Olagunju said.

He said provision of solar electricity in those areas has reduced energy costs, created more micro businesses, improved healthcare and quality of education, and generally provided a new lease of life for indigenes of these otherwise unserved communities.

In September 2016, the Bank of Industry and the United Nations Development Programme (UNDP) signed a $2 million agreement to provide solar-powered electricity to off-grid rural communities across six states in Nigeria. The initiative has now been scaled up to the N1 billion fund.

Before embarking on his banking career, Mr. Waheed Olagunju had a distinguished broadcasting career at the Nigerian Television Authority (NTA) between July 1981 and July 1990 (inclusive of NYSC).

A highly resourceful professional, he rose to the position of controller of News and head of the Economic Desk before he joined the NIDB in August 1990.

          Relationship Between BOI Interest rate and MSME.