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What Chartered Risk Management Institute means for Nigeria’s economy – Oseni

RIMAN calls for enhanced cyber security risk management

Recently, President Muhammadu Buhari signed into law, the Chartered Risk Management Institute of Nigeria (CRMI), former Risk Managers Association of Nigeria (RIMAN). Ezekiel Oseni, president of the Institute, in this interview with HOPE MOSES-ASHIKE, speaks on the benefits and other topical issues in the economy. Excerpts:

Congratulations sir on the establishment of the Chartered Risk Management Institute of Nigeria (CRMI) signed into law by the President in December, 2022. This is the only Chartered Risk Management Institute in Nigeria; what does it mean to achieve this feat, and what message do you have for risk practitioners in Nigeria?

We are very happy that we were able to get the National Assembly to pass the Chartered Risk Management Institute of Nigeria bill, and we are delighted to have gotten the President’s assent to it. It is a good thing not just for us as an Institute but also for businesses, organisations, and the Nigerian economy. 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, it is a good thing that has happened to the country. Risk management features in everything that we do, whether it is our personal lives, our corporate businesses, or the national economy, risk is a constant thing. So having a Chartered Risk Management Institute is designed to play a vital role, to guide in several areas, to forestall risk from crystallizing. In every aspect of our economy, whether it is in the public sector or private sector, risk management has a very vital role to play. 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 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.

Currently, we run a professional certification in risk management, in collaboration with the Chartered Institute of Bankers of Nigeria (CIBN). We were doing that because we were an Association, so we needed the 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. But whether things will be easier for our candidates, yes, of course, it’s going to be much easier for them; the processes that are involved will be much simpler than what we have currently. So, I can assure you that the candidates will have things much better when we start running the programme than in partnership with CIBN. But also, I must commend CIBN for its immense support all this time. They have done excellently well, and we are very proud of the governing council of CIBN, the registrar and his team at the executive level, and the members of that institute. They have done well, and we are grateful for the support that they gave to us as an Association before we became an Institute.

How important is the need for acquiring professional risk management certification now that there is a Chartered Risk Management Institute in Nigeria? What are the opportunities available with the Institute’s certification?

The opportunities are many. As I said earlier, 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 somebody else, you need risk management to be able to survive. So those that hold our certification have lots of opportunities in their businesses because it will be easier for them to understand what risk management is all about. 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. We also have industry-specific risk management issues that we bring to people in different industries or sectors of the economy. So being a member of the Chartered Risk Management Institute of Nigeria affords you many opportunities to grow, to be able to understand what risk management practice is, and to be able to imbibe that in your business. So there is a whole lot. For those who are looking for jobs, a time will come that 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, not just anybody playing the role of a risk manager, so you will have to have the necessary certification.

Can you speak on the recent reforms introduced by the CBN on naira re-design and cash withdrawal limits and how they would affect monetary policy and the Nigerian economy?

The new policy, the new naira that was introduced, and the cash withdrawal limits, for me, I think are good interventions. We know that the Monetary Policy Rate (MPR) as it is today is 17.5 percent, inflation rates are 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 rising. 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, this policy introduced by the CBN will help to strengthen the economy because much of the idle cash will not be able to find its way to the bank. If the CBN sticks to the February 10 deadline, that also means that the naira will be strengthened in one way or another, 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 assessing the new Naira notes, but 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 the petty traders and transporters.

What should we expect from your Institute this year and in the short, medium, and long term?

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 organizations. 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, they issue annual risk outlooks and this year, they are looking at climate change and the likelihood of a food shortage. When you talk about a 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, so, as we look at risk, risk on its own is not bad; there are opportunities that one can tap into and make one grow as a business or as an economy. So we have a lot to offer the economy, the government, and individual businesses. 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. Aside from that, 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.

What are your forecasts for the Nigerian and global economy for 2023?

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 rancour as such, 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 rate agencies, Moody’s has 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 in our process and be able to restore us or give us something better than what we had before, 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.

The Institute is coming at a time when the country is facing various levels of security challenges. What role can the Institute play in helping the government manage the prevalent high-security risk environment we live in?

First of all, it is important to identify when to call for risk management and then follow a process. Identify what causes it, analyse what causes the challenge of insecurity, and then determine what measures can be put in place to address it. If it has to do with unemployment among the youths, then what do we do to curb unemployment among the youths if they are found to be the ones mostly causing the insecurity? Do we have to create more job opportunities for them? Do we get companies to compulsorily hire 10 to 20 new staff even when they do not need them? At least it is part of social service to keep those people off the streets, rather than what they spend on providing security for their companies. If you have a company that spends so much on security, why not use some of that money to hire some of the youths and keep them on your payroll? They will be doing something for you, and you can put them in a training school as a kind of way to give back to society. So there is a whole lot that risk management can help with, not only in insecurity but in every aspect of the economy. Every aspect of the economy requires risk management, even in contracts. When jobs are given to contractors, what could make the job fail or the contractor not deliver on time? Let’s assume they are willing to deliver, but what could be the other things that will make the contractor fail, not because the government has not paid them, or what are the things that will make them not fail? So these are the areas where risk management is very relevant, and it should be taken into account in every aspect of our transactions.

Do you envisage any challenges during an election?

No, I do not think so.

What are the challenges risk managers face in the discharge of their duties and how will the Institute contribute to the solutions?

Today, many organisations still feel risk management is not essential, and that is not true. It is quite essential. Just like you have your operation departments, if you ignore risk management, you do so at your peril. So risk management should not be a compliance issue for an organisation that is required to comply with it. It should be seen as something very essential, something that is very necessary, something that adds value, so when you have that mindset, you will treat your risk management staff very well; you will ensure that you employ qualified people; you will ensure that people that are deployed to risk management are people that can discharge the risk functions effectively. So the risk management department should be a department for experts, where they will develop expertise, and it takes time to develop that. When you put people in risk management, allow them to function and give them all the capacity they need, whether it’s the training, the capacity building, or the exposure that they need for them to be able to add value to your organisation. So, for us as an institute, we are educating the public, we are educating businesses and organisations that risk management is very key and that when they are looking for staff, they should look for people that have been trained, not just anybody. So far, we have not heard instances where our staff has been maltreated.

What can we expect from CRMI this year?

December last year we got our chartered status. So the institute will be formally inaugurated in March, hopefully, this year, and we are quite aware that there is a lot that is expected from us as an institute. To all our stakeholders, we assure them that they will get value from this institute. Our stakeholders are the government, the public sector, the private sector, and our members, so there is a whole lot that we have to offer them. We will make businesses much better with our standards and our guidelines for capacity building that we are going to issue from time to time. We also hope that even businesses that are not rated now will have the confidence to go for ratings and be able to attract funding, support, and grants to their various organisations, and Nigeria too will be able to even attract more funding because when our businesses are doing well they will be able to go out and attract more funding, which one way or the other will rub off on the economy.