With Nigeria’s economy struggling to deliver real growth, and under stress from local and global macroeconomic pressures, Herbert Wigwe, Group Managing Director and CEO of Access Bank Plc., believes that resolving the country’s power sector challenges is critical to boost economic growth.
“The power situation in the country is approaching a breaking point and will explode if no positive action is taken,” he says. “Reliable power supply is critical for growth and lack of a stable power supply has had adverse implications for the cost of production across all sectors. There has been a valiant attempt to resolve the issues, but the structures that will ensure success from a regulatory and financing perspective have not been very effective. It will require all the stakeholders in the sector, and government, to sit together to find a lasting solution.
“The Bankers’ Committee has decided to create a strong advocacy group to work with the government around specific aspects like differential pricing for electricity consumers, pricing for gas production and supply, and refinancing of power sector investments.
“If the country is able to make the necessary adjustments, there is no reason why the economy cannot deliver 6-7 percent growth.”
Against the backdrop of an uncertain macroeconomic environment, the Nigerian banking industry has also witnessed its own challenges. “This is a function of several things,” Wigwe says. “Monetary policy has had an adverse impact on the cost of lending. The Central Bank has been committed to defending the currency and this has impacted negatively on interest rates, and ability of banks to lend to the real sector.”
In spite of all these, Wigwe believes that retail represents a major source of growth for the industry. “Digital technologies have transformed the retail play and helped deepen financial penetration,” he explains. “The ubiquity of mobile phones and availability of mobile applications have greatly reduced the cost to serve the lower segments of the market. The accessibility of machine learning and artificial intelligence capabilities has also enabled banks to rapidly increase their understanding and prediction of customer behaviour, improve their product customisation to specific segments, and reduced the risks of consumer lending.”
Access Bank, one of the largest financial services group on the African continent, recently executed a merger that has greatly increased its scale, retail expertise and footprint, with more than 10 million mobile customers. The bank’s digital transformation journey has enabled the bank remain agile and consolidate its position in this space. “Our strategy is digitally-led, supported by collaborations with reputable fintechs,” Wigwe notes. “The effort to transition to digital has been massive, but necessary. We are training and re-skilling our staff because they need to demonstrate strong digital skills to adapt to this new world.
“We are using AI for insights and decision making. The kind of scale that we envisage for this business can only be supported by robust AI capabilities.
”For CEOs to thrive in this fast-paced and dynamic environment, they must be digitally and technology savvy, understanding the implications of new technologies for their industries and businesses. They must embrace, seek and create change with a passion, and be ‘tragile’ in their approach – maintaining the right balance between the traditional way things are done and still be agile.”
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