BusinessDay 21 Aug 2018

Tuesday 21 August 2018
COMMENT
RAFIQ RAJI
“Dr Raji is chief economist at Macroafricaintel.
He was previously an
Africa Economist at Standard Chartered
Bank, London, UK. (Twitter: @
DrRafiqRaji)”
Four years ago, Fidelity
Bank aimed to be Nigeria’s
top tier 2 bank.
It succeeded. Fidelity
now aims to be a tier
1 bank by 2022. Rated B- by Fitch
and S&P Global Ratings, Fidelity
has a total asset base of $4.4 billion,
4.1 million bank accounts,
1.5 million mobile customers,
and more than 3,000 professional
staff. It is ranked amongst the top
10 banks in Nigeria, albeit with a
market share of about 5 percent.
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comment is free
Fidelity bank: Steadily aiming high
It is also reputed to be one of six
Nigerian banks that conducts an
interim audit of its financials and
was the first to adopt a market
reflective exchange rate for preparing
them. Fidelity was also
recently rated the 4th best bank
in the retail segment by KPMG,
a consultancy, in its 2017 Banking
Industry Satisfaction Survey
(BISS).The bank already maintains
high standards for some
regulatory metrics: its capital
adequacy ratio was unchanged
at 16 percent in its most recent
reporting, above the regulatory
minimum requirement of 15
percent. Chief executive Nnamdi
Okonkwo attributes the successes
under his four-year stewardship
thus far to a strong management
team and well-motivated
employees. In fact, Fidelity staff
are believed to be one of the best
remunerated in the industry. It
also has perhaps the most genderfriendly
top management team
of any Nigerian bank, with three
female executive directors.
‘
In fact, Fidelity staff are
believed to be one of
the best remunerated in
the industry. It also has
perhaps the most genderfriendly
top management
team of any Nigerian
bank, with three female
executive directors
’
Organic growth strategy
How does Fidelity plan to operationalise
its tier 1 ambitions?
Okonkwo prefers an organic strategy,
but would also consider acquisition
opportunities if they align
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with the bank’s strategy. Does
Fidelity plan to raise new capital?
There are no immediate plans to
do so, the chief executive says in
response. But it could seek funding
in the local debt market during
the course of the year. In any case,
it sold a $400 million Eurobond
in the 2017 financial year. Asked
what his strategies for growth
are, Okonkwo highlights three
things: Digitisation, especially
via its“Fidelity Mobile” platform,
has attracted more than 1 million
new customers in the past three
years. In fact, digital banking now
accounts for over 25 percent of
the bank’s fee income. The bank
is also counting on its digital
banking platform to drive down
the cost-to-income ratio to 50
percent (72.7 percent in Q1 2018)
by ensuring at least 90 percent of
total transaction volumes are via
digital channels.“We will enhance
our robust electronic banking
processes and products thereby
deepening our hold on the retail
and commercial markets, small
BUSINESS DAY
11
and medium scale enterprises and
niche corporate clientele”, Okonkwo
told shareholders in May at the
bank’s 30th Annual General Meeting
(AGM) meeting in Lagos. For
its SME clients, the bank plans an
“SME Funding Fair” where it aims
to fund as many SMEs as possible
to the tune of N500 million. If successful,
it would become an annual
event, Okonkwo says. Bottomline,
Fidelity aims to be the “go-to
bank for SMEs”. Fidelity also sees
growth potential in the fast moving
consumer goods, manufacturing,
retail and agriculture sectors and
has set a 2018 loan growth target
for these sectors of 10 percent.
• The column is a partner statement
I wrote for Fidelity Bank Plc following
a business editors’ meeting with
chief executive Nnamdi Okonkwo
in June 2018. It was published by
African Business magazine in July
2018
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comment@businessdayonline.com
KEHINDE BAMIGBETAN
BAMIGBETAN is Commissioner Ministry
of Information & Strategy, Lagos state
The set theory is a commonsensical
heritage of
arithmetic. By defining a
selection from a universe
as a set, it makes value judgments
that could relate to the mass. The
Economist Intelligence Unit, the
research arm of the highly prestigious
Economist newsmagazine experiments
with the set theory every
year. To execute its livability survey,
it selects 140 cities out of millions of
cities across the world. This means a
set of 140 cities out of a million plus
universe of cities.
That a city qualifies to be among
this chosen few is a loud announcement
of its arrival in the league
of international destinations of
commerce, industry and tourism.
It means it is being benchmarked
in its region as the most important
place people are likely to visit and
companies are likely to open shop
in that region. That is the positive
message for Lagos: that its struggle
to modernize its infrastructures and
services has attracted the attention
of the international players so much
that is has been recommended for
this study.
Curious to know why and how
Lagos got into the select group of
140 cities, I sent a tweet to Roxanna
Slavcheva, the head of the
City Practices Unit of the EIU, who
put together the research. Her reply:
When the worst of the best is better than the rest
“To answer your question simply,
the inclusion of Lagos in the survey
was motivated by client demand.
Currently we have a fixed list of cities
that we conduct the live ability
survey for. The ranking is globally
focused on business centres around
the world. That is why our survey is
global and seeks to quantify tangible
challenges to lifestyle according
to the same set of criteria across all
140 locations.”
The live ability report is an advisory
data motivated by the need to
give multinational companies seeking
to send their staff to locations
across the world a guide on what
to pay them while there. How does
the rating work? Read the EIU: “The
concept of live ability is simple: it
assesses which locations around
the world provide the best or the
worst living conditions. Assessing
live ability has a broad range of uses,
from benchmarking perceptions
of development levels to assigning
a hardship allowance as part of
expatriate relocation packages. The
Economist Intelligence Unit’s live
ability rating quantifies the challenges
that might be presented to
an individual’s lifestyle in any given
location, and allows for direct comparison
between locations.
Every city is assigned a rating
of relative comfort for over 30
qualitative and quantitative factors
across five broad categories:
stability; healthcare; culture and
environment; education; and infrastructure.
Each factor in each
city is rated as acceptable, tolerable,
uncomfortable, undesirable or intolerable.
For qualitative indicators,
a rating is awarded based on the
judgment of in–house analysts and
in–city contributors. For quantitative
indicators, a rating is calculated
based on the relative performance
of a number of external data points.
The scores are then compiled
and weighted to provide a score of
1–100, where 1 is considered intolerable
and 100 is considered ideal.
The live ability rating is provided both
as an overall score and as a score for
each category. To provide points of
reference, the score is also given for
each category relative to New York
and an overall position in the ranking
of 140 cities is provided.”
The EIU, a private research consultancy,
did not survey all the cities
in the world. Rather, it looked at
locations “around” the world. Therefore,
it couldn’t have reported on an
assignment it did not undertake. It
chose 140 cities across regions and
ranked them based on its live ability
indicators such as social stability,
healthcare, culture, environment,
education and infrastructures. This
report is an annual research product
or book sold to countries, companies
and individuals. In marketing the
report to attract the patronage of this
global clientele, the EIU put a nice
spin on it by branding it as a “world”
report.
That is not the problem. The
problem is that the media gullibly
swallowed it hook, line and sinker
and misrepresented a survey of 140
cities as a survey of the world’s millions
of cities. This hasty generalization
is logically fallacious and calls to
question the failure of rigour among
the gatekeepers who are responsible
for interrogating information disseminated
by a company in a bid to
sell its product before uploading for
public consumption.
It is more depressing that no
controversy over the indices used
is trending on Facebook, blogs and
twitter handles of the country’s commentariat.
For instance, this report
uses New York, United States as its
reference city. To demonstrate the
contradictions of this modernization
model which has been criticised by
Third World scholars such as Samir
Amir, Bade Onimode and others,
resource mobilization influences the
provision of infrastructures and services
by cities. Considering prudent
management as a constant factor
between Lagos and New York, the
massive difference in the resources
available to both cities already
shows which lags behind the others.
In 2017, New York City Council
budgeted $82.2 billion (N29.5 trillion).
Same year, Lagos budgeted
N7.2 trillion.
Or consider population. With
hourly migrant figure of 186 persons,
Lagos chokes under a population
weight of 22 million people.
New York’s most current census
of 2015 puts its population at 8,
556,405. Let us add the increase over
the years generously to estimate as
10 million today. Matching both
resource and the population for
both cities, we can see where the
pendulum swings. Vienna, the best
of the report’s 140 countries, spent
4 million US dollars to service its
population of 1,800,000 residents
in 2017.
The failure to critically review the
report from the perspective of economic
development and appreciate
the location of each of these cities
in the international system of trade
and development is a recent handicap
of Nigeria’s media scholarship.
It is indeed surprising that few, if
any has bothered to read the report
.The drawbacks in Lagos’ strive to
catch up with the world such as
the neglect it has suffered since the
movement of the federal capital to
Abuja and the denial of resources
needed for its development due to
its political distance from the party
controlling the federal government
for 16 years of the current democratic
dispensation are well known.
Today, 37 of the 57 local authorities
of Lagos State still demand and
deserve federal allocation.
Despite these challenges, the reality
is that Lagos is not resting on its
oars. With the bold and daring push
of its helmsmen-Bola Tinubu and
Raji Fashola- since the resumption
of democratic rule, the megacity has
been experiencing transformation
in all spheres and playing catch up
with centuries –old metropoles. This
momentum has been scaled up in
the last three years under Governor
Akinwunmi Ambode with the massive
investment in infrastructures
earning the city the description of “a
huge construction site”.
Lagos not only means business,
it is reforming its processes digitally
and humanly to set up shop as the
most desirable destination for commerce,
industry and tourism. The
emerging landscape of the 10-lane
Murtala Muhammed Airport Road,
Oshodi Transportation Interchange,
the JK Randle Cultural Centre, the
development of waterways and rail
infrastructures, Oshodi-Abule-Egba
Bus Rapid Transport route and first
DNA centre in West Africa gradually
rises into view.
But it is not all about brick and
mortar. More powerful testimonies
are being recorded in entrepreneurship
as billions of credit to small and
medium scale businesses through
the Lagos State Employment Trust
Fund drive the jobless from the
streets to factories. The deployment
of massive security personnel and
equipment, including CCTV technology
and street lights elongate the
city’s business into the wee hours
of the morning. Social inclusion
policies have brought the disabled,
the youth and the women closer to
public resources. Town hall meetings
have shown an administration
committed to good governance and
transparency. These have contributed
to the resilience that was globally
acknowledged last year.
Ranking 138th among business
locations across the world is the
recognition that Lagos has left behind
millions of many other cities,
including the federal capital, Abuja,
to be among the 140 demanded by
businessmen. And that is enough
reason to conclude that the allegedly
worst city among the world’s best 140
is, indeed, better than the rest.
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