Mr Ezekiel Oseni is the President of the newly established Chartered Risk Management Institute of Nigeria (CRMI). In this interview, he speaks about the importance of risk management and how to minimise losses.
We are very happy that we were able to get the National Assembly to pass the Chartered Risk Management Institute of Nigeria bill 2022 and we are delighted to have gotten the president’s assent. The essence of this institute is to define risk management practices and set standards for risk management practices in Nigeria that will make our businesses safer, our economy safer, and be able to deliver on their mandates.
So, CRMI is designed to play a vital role; to guide in several areas, to forestall risk from crystallising.
We look at what is happening around, insecurity as a matter of risk management, so, you need a risk manager to assist in curtailing that. Concerning the economy, either foreign exchange (forex) or general business operations, risk management has a lot to do with it. Just mention any part of our economy, risk management has a role to play.
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Currently, in collaboration with the Chartered Institute of Bankers of Nigeria (CIBN), we run a professional certification in risk management. The collaboration was because we were an association. So, we needed CIBN to provide credibility to the certification, which started in 2016, and every year we do the induction jointly with the president of CIBN. But now that we are a chartered institute, we are looking at how we can start running the certification on our own. It is going to take some time for us to do that because we have contracts that we execute with CIBN.
What are the opportunities with the institute’s certificate?
The opportunities are many. Risk management is universal; whether you are in the private sector, the public sector or regardless of where you work and what you do, whether you work for yourself or for somebody, you need risk management to be able to survive.
We also provide capacity building regularly for our members by bringing them up to date on the issues of risk management; whether at the global level or the national level. For those who are looking for jobs, a time will come when, if you are not a member or a chartered risk manager, it will be difficult to get jobs as risk management staff because more attention will now be given to risk management in every organisation, and you only want to employ those that are qualified.
What is the institute’s outlook on the Nigerian and global economies?
We are all aware that this year is for elections, so the political risk is going to be heightened in a way. We are very hopeful that the elections will go smoothly and that there will be no rancor, but we do not rule that out completely because it is normal to expect that those who lose may want to go to court and protest.
However, we do hope that everything will be smooth and peaceful. So, there isn’t so much to fear, with the political risk.
But from the global perspective, foreign investors are looking at us and they want to see how the elections will turn out.
Recently, one of the rating agencies, Moody’s, downgraded Nigeria from B3, which is investment grade, to CAA1, which is non-investment grade. Nevertheless, I do hope that after the elections, maybe there will be more confidence (for investors) in our process and they will restore us or give us something better than what we had. So, these are some of the things.
Again, regarding the issue of security, the government is doing a lot to tame insecurity. So, that may not be too much of a challenge this year, but we cannot rule out that it will remain challenging, but may not be as aggressive as it used to be.
How would the CBN’s e-naira, naira re-design and cash withdrawal limits affect monetary policy and the economy?
With the new policy, the new naira that was introduced, and even the cash withdrawal limit, I think they are good interventions. We know that the Monetary Policy Rate (MPR) as it is today is 17.5 per cent, inflation rate is also going up, and those things have to be tamed. But how do we tame them if there is so much money in the economy and the goods and services are not there to commiserate with the available money supply in the economy? You cannot help but have inflation.
Now you can see that with the policy and the new naira design, many people are opening their unbanked savings and bringing out money. You wonder why someone would lock up money that is supposed to be in circulation, and some of this money has been kept for months or years and is not in circulation.
So, CBN introducing this policy will help to strengthen the economy because much of the idle cash will not be able to find its way to the bank at the end of the day if CBN sticks to the February 10, deadline, and that also means that the naira will be strengthened in one way or the other, and then the cashless policy that CBN introduced some years ago will become more effective.
Yes, a lot of people and businesses will be inconvenienced by the challenges people are having accessing the new naira notes. However, all the same, you can still transact your business through e-naira, e-transfer and the like without having to bring out physical cash. Also, note that the smaller denominations have not been redesigned and are still readily available for petty traders and transporters.
What should Nigerians expect from CRMI?
For businesses that already have our members, yes, we will provide regular capacity building for them that will bring them up to speed on what is happening in their various sectors of the economy and globally so that they will be able to manage whatever risk comes up in their respective organisations.
Secondly, we will come up regularly with risk outlooks, either for the quarter or for the entire year, to warn businesses and institutions of the likely risks that the country may face at any point in time. If you look at the World Economic Forum (WEF), issue annual risk outlooks and this year, they are looking at climate change and the likelihood of a food shortage. When you talk about food shortage, what opportunity is there for Nigeria? Either to increase productivity in the agricultural sector or to boost production for local consumption and probably for exports too.
We are going to have a conference later in the year, and one of the things we are going to be looking at will be risk management issues that are very critical to business and the economy.
We are collaborating with some institutions to have regular capacity building, which we are going to make free to members of the public so that they can know more about their businesses and how they can manage their risk.
Also, at the secretariat of the institute, we are going to have a desk so that people who want more information on a specific area of their businesses or a sector they want to invest in can get advice on the major risks and be linked up with experts in those areas, whether it is in oil and gas or telecoms or whatever it is.