Indians are not very famous for physical work. My friend Syed, from Kolkata, pokes fun at himself for that. South African comedian throws a good joke about how the British made a huge mistake bringing Indians to the mines of Kwa Zulu Natal to do hard work. The Indians would rather keep the accounts. Russel Peters, a Canadian with Indian ancestry has loads of jokes on this as well. And so, I am not surprised at all that Indians dominate banking in many parts of the world – from the Arab world to Europe and America. But the Indians are now also doing well in Engineering and Technology.
In the same vein Nigerians are doing well in banking. I was a bit flummoxed running into a British man in the lift at Festival City, Dubai, years ago and when he asked where I was from and I replied ‘Nigeria’, he said ‘You guys have some pretty famous bankers!’. Yes, Nigerians were/are all over the world doing financial transactions. But is Nigeria getting better for all the efforts? Is it not all about personal profits? Or basically about chasing money that we often have no idea what to do with. Perhaps if most of the money we make end up in Nigeria – even in our banks or in infrastructure or visible stuff that can employ our people or make our country better and more attractive, that would have been great. But most of our money heads or remains abroad. Many Nigerians are proud to announce how many houses they own abroad.
There is this concept called ‘financialization’ which some of us have been concerned with. We observe that Nigeria has been doing great with her banking sector. In fact, we are opening brand new banks lately – Titan Trust, Globus, Premium Trust, Parallex and a few more – even in a time of global economic recession, covid-19 and domestic economic uncertainties. We love our banks. But that is not where the issue is. Every Nigerian wants to become – or has already become – a banker. Many people are managing funds for people who could never be associated with the volumes of money they have somehow made. They are bankers in their own respect. Many of Nigeria’s ‘celebrities’ also call themselves ‘investment bankers’, with no degrees or certifications or any regulation whatsoever. Once they can come up with capers that promise to pay some fantastic monthly ‘RoI’, and power that through their millions of followers, they surely are in business. One Nigerian ‘celebrity’ said she went abroad recently, where she spoke with the ‘investment’ community – according to her, basic stragglers on the streets who regaled her with their ‘investment banking’ exploits. I read her story with keen interest. But I know that investment banking is tightly regulated out there because of the many lessons they’ve learnt over time. Investment banking in developed nations is certainly not the all-comers affair it is here, I worked in banking for close to 15 years and have been in that realm since then, but I dare not call myself an investment banker. That is serious business!
But what do we do about the fact that every other company in any non-banking sector is fixing to get some sort of banking license as a result of our continued financialization of our economy – as against its industrialization? There are loads of licenses issued by the Central Bank of Nigeria. Payment Service Bank, Payment Service Providers etc. Point of Sales operators now compete for space on every street – sometimes every 5 steps you take. For guys who get into such businesses, it’s all about the Benjamins. Guys have understood that the best businesses to be in are the ones where you position to help move money around and just collect your commission. It doesn’t matter from whence came the money. It doesn’t matter that our economy is dying, and our industrial sector remains comatose while unemployment is rife on our streets. The other day, a scandal broke out about these sharp Nigerian dudes who ran $250 million into Kenya and then into different tax havens. Another recent one is about two Nigerian guys running money transfer business from the USA That is what many of our smart guys are doing now. And they are the unicorns.
I warn though that we should know that we cannot successfully skip the industrial stage and depend on the rest of the world for all our needs. Our international trade profile bears evidence that we produce absolutely nothing and depend on the world for everything. This must change for our own good. We face very cataclysmic times ahead. 52% of our economy is in Service. We once had close to 10,000 Bureaux de Change, with many Nigerians selling dollars from their briefcases. We are not producing. I believe that the idea of financial inclusion, as promoted by multilateral institutions like the World Bank, has become an overkill. We should think about economic inclusion – let our people be part of the production of tangible goods and services beyond moving mostly corrupt monies around for a commission.
These things are beginning to show us signs. Some of us were afraid when the telecoms firms got their own banking licenses. They already have access to a huge database. In fact, the banks reach their own customers through these companies. And the future of banking looks like it will go with the companies that own the most data (people’s records). The ultimate play is a Google Bank, Facebook Bank, Amazon Bank (that may exist already), Twitter Bank. But MTN’s Momo Bank in the first few weeks of its operation encountered what could be a glitch or security breach, leading to the loss/misallocation of N22.3 Billion which was allegedly mistakenly posted into 8,000 different accounts in almost all our key banks. MTN has gone to court with the banks concerned, asking for its money back. Perhaps the company will get the monies back but it is doubtful if all the money will be returned.
I think this calls for caution with this fantastic financialization journey our ours. Not every institution will be ready to play the role of a bank. Not a lot of them will understand the risk issues that banks may have mastered over time. And as we live in a tech age, there are new risks that will occur that nobody will be prepared for… like this one with MTN’ Momo. Meanwhile, companies like MTN are sitting on huge amounts of data, with data being money, meaning that we could have a lot of money at risk with those organizations getting into mainstream banking. Are there black swans – unknown unknown – phenomena waiting for us around the corner as every Nigerian falls over themselves to obtain some sort of banking license or the other? Must we all be bankers? Are we too lazy to industrialize and build things from the ground ourselves? I’m actually just asking for a friend. Don’t come for my head