Also available
Interview with
Dr. Kalu Idika Kalu, Chairman BGL Limited
Planning is the Key to Success
CN: You are a World Bank Economist, the chairman of BGL and have served as Minister of Finance, Minister of National Planning and Minister of Transport as well as the Board of Governor of the African Development Bank and Member of the Development Committee of the World Bank. Is the success of the financial sector having a positive effect on the other sectors of the economy? How can growth in the financial sector be leverage to grow the economy as a whole?
Dr. Kalu: First, the financial sector witnessed many major changes in recent years. One of the most important of course was the consolidation of the banks. Essentially the normal thing is for banks to undertake syndication when they have to undertake large projects, but it’s also necessary at times to deliberately beef up the capital capacity of the banking sector as individual entities so they can fund, look out for, appraise and finance larger projects. Essentially, despite the fact that there were pros and cons as to whether you do this in a deliberate manner, or you allow the system to grow with the rest of the economy. You get big banks and the economy gets bigger. Nonetheless I think it has been accepted that the deliberate effort to reduce the multiplicity of banks from about 85 to 25 has been good in itself, because you are setting up in individual banks a greater financial muscle than you would have had otherwise.
Of course this has been one of the reasons a few of us have also cautioned this notion that the Nigerian financial sector will become a hub. You have to look at the whole metrics. You can’t just take the financial sector and leave other sectors. You have to think of how the other sectors will also be viable sectors. This will need to be done and it takes time to build the human capacity, grow the critical infrastructure like power, water for domestic and industrial use, access roads, and education. All these require deliberate planning and even though some of us started talking about liberalization, globalization, that didn’t mean you didn’t have to plan. That is the basic economic constrain that you have so many needs and you don’t have enough resources to meet them, so you have to continue to plan. Planning will make the economy more attractive for foreign investors.
