Until his appointment in 2007, Andrew Alli served in Washington D.C. with the International Finance Corporation, a private sector funding arm of the World Bank Group, as an investment officer operating first in the oil, gas and mining department and eventually with the telecommunications division after which he moved to Travant Capital as Deputy Chief Executive Officer. This week, the Chief Executive Officer and founder of the Africa Finance Corporation, Andrew Alli speaks with Rita Ohai on Nigeria’s constant battle with ground-base development, reforms in the banking sector and more.
When Andrew Alli and his team set up the AFC on the initiative of the Central Bank of Nigeria, the mandate for the organization was to fill the infrastructure gap across the continent.
As an organization initially capitalized with $1 billion USD, he’s been able to finance projects in 12 countries across Africa and increase the size of his balance sheet from base to approximately $2 billion in just seven years.
In recognition of the efforts he has put into aiding the evolution of emerging markets, the African Banker recently awarded him the Banker of the Year Icon; a feat he ascribes to team work and dedication.
While it’s been an upward climb for the MBA graduate of INSEAD, he has had his fair share of difficulties to deal with. While others are saddled with solving electricity related and fiscal problems, Andrew’s biggest challenge is hedged around his company’s desire to properly spend the vast amount of money at their disposal.
Alli said; “I know this is counter intuitive since everybody always claims that access to money is always a problem. We have money but often, finding good investments to put it in is difficult.
“There are a lot of potential investments obviously, but it is not easy to find businesses that are packaged in a way that an international standards investor like us [AFC] can actually put money in. We spend a lot of our time trying to work with sponsors in packaging their material to meet international standards before we can invest in their projects and this is a problem across Africa and not just Nigeria,” he concluded.
In a clime where sourcing early stage risk capital is difficult, this is a rather interesting prospective as the unavailability of funding required to drive ground breaking ideas to completion has served as a bane for venture capitalists across Africa for decades.
This low rate enterprise engagement has propelled a huge deficit in the creation of indigenously engineered products and services leading to the influx of adventitious capitalists.
In spite of the large amount of foreign investments recorded on the continent especially with the ratification of fiscal reform policies that encourage the participation of high impact enterprises in growing each targeted nation’s Gross Domestic Product, industrial development appears to have advanced at a slow pace. This is particularly evident with Nigeria’s poor ranking by the World Economic Forum (WEF) which pegs the country at 127 out of 144 countries on the global competitiveness index.
Assessing the systemic flaws in the State’s infrastructural implementation master plan strategies, Andrew said, “Nigeria is an attractive investment destination which is why we are seeing an increase in investors. However, I think we focus too much on foreign investments. If you look at all the recent happenings in power privatization and the sales of oil and gas assets, a large number of these things have been wholly financed from within Nigeria which is really something that couldn’t have happened a decade ago.
“Clearly it is not the easiest place to do business in the world and if the ease of doing business were improved we would probably see acceleration in that area. Remember that people here are investing but if they see it as risky, they might send some of that money offshore.
“Also when that WEF report came out, there were some technical issues brought up by the competitiveness council and whether we are 120 or 127 on the table is not good enough, we should be aiming to be on the top half of the world and we need to improve in this area,” he said.
As speculations’ surrounding the affect of the decision to explore Shale gas by America and Asia puts the local industry on edge, some stakeholders have made efforts to dispel the apprehension among the general public by citing untapped markets within Africa as alternate sources of viable revenue – especially with the United States’ decision to cut short the purchase of crude from the country.
However as a major player in the oil and gas industry who leverages on the benefit of foresight, Andrew has a different opinion.
Although he says that he cannot make any predictions on when or how the Shale revolution will affect Nigeria, he insists that “it definitely will – one way or the other. This is why it is important for Nigeria to continue to diversify its economy because that is the only long term protection that we can have.”
He also posited, “I think the technology that has enabled America produce Shale gas is going to affect everybody in the oil and gas business. The other thing with technology is that you can only assume that it’s going to improve and therefore the cost of producing Shale oil is only going to come down and this will affect the world’s oil pricing system.”
A few weeks ago, the banking sector buzzed with mixed reactions at the return of former bank executives who were ousted by the CBN governor, Sanusi Lamido Sanusi. Coming on the heels of that development, was the announcement by the regulatory financial body enforcing the reinstatement of ATM bank charges pegged at N65.
With this perceived reversal to old trends, Andrew airs his views on the move: “First and most importantly, the stock market reacted positively to the news of the return of these people as chairmen of the banks this means that investors see it as a positive thing.
“The rules under which they came back were those established by the former CBN governor. Unless they had changed the rules, these people would still have been able to come back and as long as the market liked it, no one can object.
“As for the ATM tariffs, there is a cost for using these machines and somebody has to bare that cost. The fact that it was not costing end users to do this does not mean that somebody was not paying for it.
“It’s not free for the banks to operate these ATM’s especially in Nigeria where you must have generators, batteries and security and what we need to do is encourage banks to roll out these policies because they benefit all of us and it gives incentives to the public by reducing what they have to pay,” he concluded.
As most organizations make projections for the last quarter as well as the in-coming year, Andrew commitment to leading his team in achieving bigger targets positions the African Finance Corporation for greater impact.
