Finance Minister Warns Against More Loans – Chika Mbonu – YouTube

Transcript:

(00:04) Niger banks are owning telecommunication companies over 200 billion for unstructured supplementary service data (USSD) charges. Chairman of the association of licensed telecommunications operations of Nigeria Gbenga Adebayo revealed first yesterday in Lagos while highlighting the many challenges faced by Telecom operators. Arise business analyst Chika Mbonu joins me now for more on the stories

Good morning to you Mr Chika Mbonu great to have you on the show very well thanks and yourself Friday yes thank God very excited about that well let’s begin with Telecom

(00:33) operators asking Banks to pay the USSD spent now $200 billion that’s quite the figure to have racked up what do we make of this.

Chika: This problem has been on the table for some time now and it almost table and I thought by now that um it have resolve somehow um you know for our viewers um you know um this L to the ussd you know I un structured supplementing service data but let me let not with that meaning but the issue is that for anybody who’s doing the star something whether you’re transferring money using this Star

(01:16) something for the bank

Mr Chika let’s take a very quick break we need to test your sound a little bit we’ll be back shortly stay with us we have lots more for you to [Music] cut you’re watching the global Business Report on arise news many thanks I’m still here with arise business analyst Choka Mbonu and we were chatting about the Telco operators asking Nigerian Banks to pay up the ussd debt let’s get back into it yeah thank you Abby the

Chika: The issue boils down to the fact that who will charge the customer absolutely who will

(01:47) appear the bad boy to the customer and so the banks are saying Telecoms do it like a normal service when the customers your customers press star something charge immediately for it don’t make it their responsibility while Telecoms are saying the banks this is service is for you charge the customers and then the bank customers and then credit us with the money and so in that is why its not easy to do. because nobody wants to appear the killer for the customer who is already burdened by so many charges so that has been the

(02:24) major issue the last um CBN Governor plus the former NCC chairman try to you know uh diffuse this issue because of the importance of that sector you know a lot of people more the bottom of the pyramid and the central bank is pushing or the country is pushing Financial inclusion that service is very key for financial inclusion especially for people in bottom of the pyramid in the in the banking system so that’s why it’s very important now also you Note the perspective the banks. And the telecoms are making a lot of money from

(02:57) Nigeria in Bank in banking because you see SMS is dying worldwide I’m sure you know that already but in Nigeria they’re making a lot of revenues because it’s mandatory for all our customers to the banks you know to have SMS for your bank transactions unless you give a disclaimer to the bank that’s a CBN directive so they’re making a lot of money on that so the issue then therefore for me as I put it out there is that in new CBN Governor there a new NCC chairman and they let collect the banks you know they two parties together

(03:31) and try to resolve this issue and then let’s know who will carry the charge that’s basically what the problem is there.

Question: But could we talk about the likely implications on Bank customers should The Operators actually decide to shut down of course I’m looking at the worst case scenario now but what could…

Chika: It would be a national Calamity you know those kind of that that you know they can happen but it shouldn’t happen that’s why it has not happened because the Telecoms of course

(03:58) to push this recovery of this should actually you know drop the services but it’s difficult for them to drop the services because there other auxiliary incomes that come from you know relationship with the banks as mentioned to you the SMS you know and it’s a national service remember so the Telecoms will be seen as you know enemies of the system and that’s why they have not done this and that’s why I’m pushing out there that the Central Bank Governor realizing that this a very important service for the banking value chain must you know meet with the

(04:29) NCC people bring all the parties together and then let’s find a resolution to this you know amicably and so that um you know the service can continue because of this a lot of banks have stopped investing the on this USSD modernizing it because of the uncertainties around it. And any service are not invested in tends to get extinct.

Question: right so it’s a question of who will bail the cat in most case no one wants to be with that cat but let’s go very quickly to Nigeria’s boring of course surely now this is no news

(04:58) I mean what is new we’ve been ringing tuned for quite a bit haven’t we I mean but you see in looking at the whole basket of things NSA about two days ago said we they inherited a bankrupt country remember it’s out there in the news um so everywhere you go you list you hear things about the set of economy I I I said that I thank God that Nigeria didn’t maybe in a funny way didn’t Transit from an opposition party in power to an opposition party because you would have spent the first one year doing this

(05:34) probing and what went wrong and what didn’t go wrong so all the lies that were told in the last 8 years you know have come home to roost you know so our economy is in Chariot but I keep talking about in this program that God blessed us with oil our fiscal economy is in this is in messed up because a country that used to pump 2 million bar a day is now pumping below barely 1 million bar a day all the other ones are stolen and this is Common wealth and so I’m saying that I like the jaunting I

(06:10) like the going to Dubai and going to India and going to Saudi Arabia and whatever but the President should come home and go and call a town hall meeting for all the Oil belts and meet the communities like Yar’Adua did in those days and ramped up our production to 2 million bar a day and throughout the powers of the state against all these people who have been stealing our oil move our production back to 2 million bar a day our fiscal all this borrowing and all this dollar thing sub reduce that is our major problem and then you can focus on

(06:44) all the things God has given to us instead of going around as a begging Nation we have solid minerals there so many things we have but all talk and talk and talk and no do Nigeria is talk talk and know you know we should do talk and do as Nigerian say but Nigerian Niger we don’t do we don’t talk we just talk we don’t do there are things to do immediately to salvage our economy ramp up our o production back to where what it used to be and then our revenues will return back to the level yeah so let’s

(07:12) the whole power of the nation towards all these people who who have their own individual pipes and oil thefts reduced substantially you know and it will help our economy otherwise what the Minister is saying is known we’ve heard it so many times surprised therefore are you surprised therefore that as I said where would the money come from running the government very important question because it go back to the ways and means. Watch out!

Yes lots to watch out for because you’ve mentioned some very cogent points it’s all

(07:46) about action let’s see if we get in there but very quickly let’s move on to payce tax decision now to lay off you know 33 employees across the UAE and the Europe what’s that all about?

Chika: Okay see the fintech I was speaking to some group last week and I said like a lot of things in Nigeria um you know a lot Niger do a lot of bandwagon things and you know Abi be is selling rice and moving rice and so rice is doing well everybody just jump into um um selling rice without understanding the dynamics

(08:17) of the market you see the fintech revolution in Nigeria um all the world let’s Nigeria Niger has been you know a a mountain for this revolution you know a lot of people have stepped out without looking at the right models that will suit their business and in that process have accumulated you know costs that the business cannot sustain so a l are realizing now that the revenues that are they are coming to their through their businesses the single cents and dollars and coming in do not match the kind of

(09:01) expenditures have made in the robust offices have established internationally the international employees have um they employed and so if you if you notice what has said you know this office is Middle is I think is in Dubai or whatever they want to do things now using the local locals in the countries where they are based so they’re pushing a lot of things back to the base and so increasingly a lot of the Fntech people are looking at the business models and trying to match profitability or the revenues with the kind of

(09:35) expenditures that have been incurring now I have been talking to revenue authorities for a long time I said that I have a problem with the models a lot of them are running because you have the Fintech in front who starts with a you know lending company with a base on Capital the next thing they go acquire a micro finance banking license behind and so look at all of them all of them have micro financing banking license look at what happened to Kuda about last year when they saw a result that they made about 6 billion naira loss so

(10:06) when you are running a deposit taking institution there are models to run you know there lot of issue about fraud controls corporate governance transaction cost and so on and so forth which a lot of people have just stepped out to go and do without taking those into consideration and it becomes expensive now you have 30 people now that who are going to become jobless International staff there you know thought they had the dream jobs in Dubai and sometimes staff and now they’re going to lose their jobs because they

(10:39) going back to the real model that using run your business you know it’s very interesting and important that you mention that it’s a prep classic case of chewing uh biting enough a lot more than you can chew and other people have to suffer for it but many thanks I really wish we could go get into it in a more detail but uh Arise business analyst s Chika Mbonu many thanks for joining us and we’ll see you again.