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Creating value through financial services – The Heritage Bank example

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Heritage Bank-Dukia Gold to boost Nigeria’s N200m ounces of gold potential reserves - FG
Heritage Bank MD, Ifie Sekibo

In the financial circle where Heritage Bank operates, cities are like women. While the banks resort to desperate tactics like suitors to win cities perceived to be financially viable, others are left to cling to loneliness and self-help.

For this reason, bankers strain themselves to market their services in seemingly overbanked Abuja, Ibadan, Lagos, Kaduna, Kano, Port Harcourt and to an extent Asaba, Calabar, Onitsha, Owerri and Uyo, while residents in several other Nigerian cities travel several miles to access financial services.

Whereas the challenge resulting from these lopsided-banking services affects states across different parts of the country, it is more acute in the north, a region located several hundreds of miles away from Lagos, the country’s financial hub. The cold attitude of financial service providers to the economies of the affected states is both a cause and effect of the uneven economic development often blamed for the social unrest in the north especially.

Over the years, the Central Bank of Nigeria (CBN) has had to rely on moral suasion to encourage the profit-oriented banks to take financial services to the hinterlands as part of its effort to reduce the population of the unbanked. Still, the risk-averse banks have continued their historical scramble for cities that have demonstrated viability (in their books) while shunning the ones with huge but unexplored economic value.

It is also in line with this conventional thinking that the banks have focused on funding oil and gas projects and importation to the detriment of the real sector, a challenge often seen as a romance with the enemies. Indeed, importation, as realised lately, is the country’s frontline enemy in the battle for economic independence and wealth creation while the real sector chief of which is agriculture with allied industry holds the ace to the much desired industrial revolution. Many first and second-generation banks are yet to convince the country that they understand the relevance of this realisation to the country’s economic breakthrough, despite the effort made by the CBN to keep them in line.

A few banks, however, are beginning to blaze the trail for the long-awaited inclusive and developmental banking, taking into cognizance the economic potentials of the far-flung and neglected states. For one, the Heritage Bank Plc, African Export-Import Bank and Zamfara State Government $1billion memorandum of understanding (MoU) aimed at exploring the enormous potential in the state’s mining, agriculture and water resources is a fundamental shift the tradition of Nigerian banking services.

Zamfara is not known for a large ticket financial deal. Perhaps, the $1billion MoU is the largest deal it has entered into. So, it is an audacious initiative, which Heritage, a relatively new but highly innovative and daring bank, is part of. And the MoU is addressing the missing link in making a big deal out of the massive opportunities in the Zamfara mining and agriculture.

A quick review of the mineral deposit and recent mining activities of Zamfara is critical to appreciating this audacity. Gold mining in Zamfara is a source of income not only to residents of the state but also to thousands of individuals from neighbouring states such as Kaduna, Katsina, Kebbi and Sokoto.

In the past 10 years, thousands of people have had to rely on the mining sites that dot different parts of the state for illegal gold exploration, using crude weapons.

And this has also fuelled the proliferation of banditry and gun-running activities in the state. In recent times, there have been reports of dozens of people killed, a reminiscence of the conflict in the Nigeria Delta over crude exploration. For many people, to or not to exploit the gold deposit is a major question Zamfara, the Federal Government and other stakeholders must answer going forward as the country cannot stand another resource-related conflict in the magnitude of the Niger Delta militancy.

In the wake of the killings in the gold mining sites, it was discovered that the government’s capacity to harvest the gains of the deposit discovered long before the discovery of oil and gas in Niger Delta was as weak as its ability to enforce compliance. Zamfara State Government, hitherto, could not marshal the needed resources to leverage the opportunities. No one sits on a gold deposit and remains poor. But Zamfara has remained a struggling state its rich gold deposits.

Besides mineral deposits, Zamfara is promising in agriculture, albeit most of the farmers still rely on old practices. The state government has reiterated its determination to provide the needed infrastructural supports to increase revolutionise farming and increase yield. The MoU is a bold step towards the birth of a new Zamfara.

Speaking during the signing of the MoU in Abuja, the Managing Director/Chief Executive Officer, Heritage Bank, Ifie Sekibo, said the collaboration among the institutions would promote and fast-track activities that would help Zamfara explore its untapped resources for the benefit of its people and the nation’s economy.

The initiative, he added, would help unlock massive opportunities inherent in solid minerals and support efforts on local content promotion, facilitate industrial development and export development. Sekibo, explaining Heritage Bank’s involvement in the partnership, said, “It is a game-changer that will drive formidable economic growth for the state government, serve as a backbone to the economy through job creation, as well a way of cushioning the present economic situation.”

With the MoU signing, Zamfara State Government has taken its destiny into hands in the context of Nigeria’s federal system. The state has shown every sign of a prosperous entity but hitherto lacking the capacity to weather the financial storm, provide the needed infrastructure to support private enterprise and contribute to the growth of the country’s economy.

“Farming is our pride,” says the state’s slogan. Perhaps, the vista will help the citizens extend their love for farming to mining and agro-businesses and convert the waste that has become the lot of the northern agricultural exploit into the wealth of the nation.

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