In the midst of the a string of allegations of fraud and bad banking discipline the Sierra Leone Association of Commercial Banks recently elected a new President. The MD of ECOBANK Sierra Leone, Clement Dodoo is saddled with the responsibility to re-railing the reputation of commercial banks which seems to have been knocked off the rail owing to recent scandals. In this interview, he talks to Politico’s Business Editor Tanu Jalloh.
Politico: And why the Association of Sierra Leone Bankers?
Clement Dodoo: Well I think that generally in every country you find an Association of Bankers. Basically it is to promote the welfare of banks and bank staff and also to look at improving the system. So basically that is why we have the association.
Politico: Are they all private banks?
Clement Dodoo: No. There are commercial banks. It doesn’t matter whether they are government owned or private owned, but they are commercial banks.
Politico: Amongst them is the Sierra Leone Commercial Bank.
Clement Dodoo: Of course there is the Sierra Leone Commercial Bank.
Politico: And you are coming in at a time when you have this dark cloud hanging over the activities of commercial banks. How do you hope to handle that?
Clement Dodoo: Well I think I wouldn’t call it a dark cloud, per se. I would say that these are quite normal in the banking sector. We [Ecobank] have been lucky in Sierra Leone that we’ve not been hit by such an incident for a very long time. But I believe if you read the news all over the world and even in the western world we have had people getting into all kinds of funny things. I wouldn’t say it is a dark cloud.I would say it is an experience that would rather make us strengthen our controls and be on the lookout.
Politico: How does it feel as an association that banks or certain banks are kind of involved in all kinds of funny things?
Clement Dodoo: I think that as an association we are very proud that most of these things were unearthed by ourselves. So it isn’t a case of somebody coming from outside to come and say that we have done something. We found it ourselves and we reported the cases. I think that as an association we are proud of that. We are not happy because it has happened, you know, but we take solace in the fact that it has given us the opportunity to close in some gaps, if there are any.
Politico: With OPEC [the group of petroleum producing countries] and other cartel organisations across the world and now we are have bankers’ association in Sierra Leone. Don’t you think people would look at the association as some cartel sort of protecting banks against customers?
Clement Dodoo: No. No. No. No. We are not a cartel. Infact we are not an association to fix pricing. No, we don’t discuss things like that. Basically, like I said, it is to improve on the sector. Things that we look at are the code of conduct; the banking ombudsman; training schools. You know we don’t have a national banking college; we are looking at developing one. We also don’t have the Sierra Leone Institute of Bankers; we are looking at doing it. So these are the things we are keen on doing - to train bankers, to build capacity, so that in future you have more capable hands for the sector.
Politico: So as an association you have a banking code of ethics, as it is?
Clement Dodoo: Of course.
Politico: Is it completely different from what obtains in each individual bank?
Clement Dodoo: Well, typically it’s the harmonization of what we have in the individual banks. Yes, but you can be sure that more than 95% of the issues are about the same in all banks. Because, I mean, we all work under the prudential guidelines of the Central Bank.
Politico: We would come to that later. Let’s talk about interest. Doyou have uniform interest rates across the banks?
Clement Dodoo: No. Each and every bank has its cost of funding. That is what goes into the fixing of their base rates, which also to a large extent, affect what do you call it the interest rate. So, depending on your sources of funding…the cheaper your sources of funding the likely you might have much cheaper interest rates. But if your sources of funding are quite expensive, you are likely to be somewhere a little higher.
Politico: So we don’t see for example the supervisory or the governing body that supervises you, the Central Bank to be specific, coming in to determine for example how you place your interest or how you arrange them?
Clement Dodoo: No. That would be a kind of control system. I don’t think that the Central Bank would want to do that. I think in a free market system you would want the banks to determine it and also look at the competition. So, actually, it is competition [that] would drive it. And if you think that bank ‘A’ has a cheaper interest rate then you might have to look at how they got their funds. And if you have the potential of getting to that fund then you get to it. I don’t think the Central Bank would want to do that. This is a free economy.
Politico: You just talked about competition and I was gonna ask about competition anyway. I was wondering how it is that competition affects your coming together as bankers in forming an association?
Clement Dodoo: Well we happened to be in one business, in the same business, all of us. I think we think alike. We do things very commonly. It’s just like you having football clubs coming together to form the football association. Yes there is competition.
Politico: In this case we are talking about business strategies and all that…
Clement Dodoo: It is the same thing. If you look at football you win the league and get some money. If you don’t win you don’t get anything. Even if you look at, for example, the Champions’ League, if you win there is money, millions of Euros attached to it. So it’s business. You know coming together as an association helps us a lot. Take for instance I want to train about 4 or 5 people in a particular area, you know for me to probably send them outside to South Africa it could be very expensive. But if we have probably all the banks wanting to train 30 to 40 people, we can bring the resource person here and it would be much cheaper for us. So this is why we need to come together as an association rather than doing things individually. And you know coming together as an association we are able to check ourselves. Those who are not doing the right thing as an association we talk about it and tell them that these things are not things that we should be doing. So I think rather as an association it openus. If we have been individualistic, believe me, the competition might have been worse…people might do things undercut. But because we are together I think that it is rather helping the sector.
Politico: So we don’t get to see a situation where, for example, the interest of the association comes to clash with say an individual bank?
Clement Dodoo: No. Since we are human organisations I believe that once on awhile that might come in. But I believe that what is more important is like any organization or like any association what pertains to the general good of the organization is what we all pursue. Of course when there are individual challenges, if a member banker is challenged, we would definitely step in and help. Of course to the extent of our ability and what we are allowed to do youbut if it is not within our abilities then we can’t do anything about that.
Politico: What do you think is fundamentally different in the way individual banks operate? What do you think might be of interest or concern to the association of which you head?
Clement Dodoo: Well I believe that all the banks are operating properly and are meeting their prudential guidelines. If there are any issues the Central Bank would raise it and normally the Central Bank raises it with the individual bank.It’s not something that might come out to the association unless maybe the bank wants to share it or unless maybe it’s something systemic. If more than 4 or 5 banks are facing it then we might pick it up and discuss it. Let’s look at the situation probably in Kenya or in Nigeria or in South Africa. This is how they do it and probably we should adopt it and go along with it.
Politico: So we don’t see this association as a kind of a parallel supervisory body?
Clement Dodoo: No. No. No.It’s just an association, it is not supervising anybody. The rights and the powers to supervise rest squarely on the Central Bank, nobody has that right and they are backed by the Banking Act and they are regulated under the prudential guidelines.
Politico: Meaning there is no tinged of regulation in so far as the activity of the association is concerned?
Clement Dodoo: No. No. We don’t regulate anybody. We don’t do that. We don’t have that power.
Politico: What does the Sierra Leone Association of Commercial Banks needs to move ahead?
Clement Dodoo: As an association, there are certain basics that we want to put in place like...the institute of bankers. We have a lot of young people coming up and we don’t have an institute of bankers so what it means for a young man wanting to be a professional banker is totally absent. It’s either you are registered with the UK institute of bankers, Nigerian institute of bankers or Ghanaian institute of bankers. But that shouldn’t be the case, we should have a Sierra Leonean institute of bankers, and that is one of our priorities.
We should also have a national banking college where we can send our staff to train and teach them the modern tenets of banking because we cannot continue sending people abroad to go and train whiles we have the resources here. We have senior bankers; we have retired bankers who we can employ to train [them] for us. As an association these are our key goals like we want to get the national switch running, we want to support the Central Bank in also a lot of projects they have to ensure that the banking sector is run soundly. We don’t have an ombudsman; we need to have a banking ombudsman. These are the areas we are looking at not to regulate.
Politico: You just pointed out a few very great points. Do you consider those as part of your plans as the new president?
Clement Dodoo: Yes they are.
Politico: And how do you hope to deliver on them?
Clement Dodoo: We have clear deadlines on that we have. These are delivered goods that we want to do within the next one year some of these things would materialize
Politico: To be specific which ones come in the immediate terms?
Clement Dodoo: The national banking college should be. Initially we wanted to kick-start it this year but it actually deals with location. We have gone very far with discussions…we are getting support from the National Banking College in Ghana. They are ready to give us some support with some resource persons and even in terms of designing of the calendar and everything. And then also the Institute of Bankers, we have had initial discussions with the Nigerian Institute of Bankers and they are ready to give us an association. So first we would gain an association with them and in time we would get our own certification.
Politico: Ombudsman as it relates to the way banks operate?
Clement Dodoo: Yes, the way banks operate. So it would be a clear case for somebody like you to take your complaints to, because currently customers have challenges when they have complaints it either you go and complain to the bank and sometimes it might not be resolved. It is not right to go and complain to the Central Bank, but if you have a banking ombudsman that’s the right place to go to.
Politico: So at the moment who takes care of those concerns?
Clement Dodoo: The banks themselves. If you have problems with the banks you complain to the banks and they fix the problems.
Politico: And what if the problem is interbank related or between two banks?
Clement Dodoo: We find a way of resolving our issues. We don’t wash our dirty linens in public.
Politico: You more or less function as a ceremonial head, why is that?
Clement Dodoo: Yes. The office is run by an Executive Secretary. It’s in the Commercial Bank building on 35 Lightfoot Boston Street…it’s on the sixth floor. We have a fully-fledged secretariat and that if you have issues you want to check on something, you can go there.
Politico: How is the head of the association selected or elected?
Clement Dodoo: Well it’s through an election. There is a nomination and you are elected. However, we would have a president and his vice so when the president goes his vice takes over as the president and then there would be an election for another vice.
Politico: Is it true that Ecobank is the largest private bank in Sierra Leone?
Clement Dodoo: Well last year we closed the year as the fourth largest bank which put us behind three other banks – Rokel, Sierra Leone Commercial Bank and I think Standard Chartered. Yeah, but this year I believe that we might get to the third position.
Politico: What does it mean for a private bank to be the largest in a country like Sierra Leone?
Clement Dodoo: Well I think that it is a manifestation of the fact that Sierra Leoneans have embraced the bank. We have been in the market for only six and a half years and having grown, given the spate at which we have grown, it is a clear manifestation that people have confidence in us.
Politico: Precisely what do you think is unique to Eco Bank in terms of operation in an African setting hence the Pan-African Bank?
Clement Dodoo: Well of course in terms of coverage we are the largest bank in Africa. We employ more than 40 nationalities, so it makes us truly African. Even if you look at our group board you know you will find people from South Africa, Cape Verde, Ghana, Nigeria, Cote D’voire, Mali, Senegal and all across the African continent. We are still spreading out. I mean we just got an office for Ethiopia, and I think also for Southern Sudan. We are working on Mozambique and Angola. It’s a truly African bank where you can say oh you have only Ghanaians there even in Sierra Leone we have Ghanaians here we have 2 Ghanaians, we have a Gambian and we have a Nigerian working with the Sierra Leonean team you know so we are truly African bank. You cannot say we come from any particular country
Politico: Public perception about how banks operate in this country has taken a nose dive. What do you make of this?
Clement Dodoo: I don’t blame those who have that perception.
Politico: So do you think you can come in as an association and work on that perception and see how best it can be reversed?
Clement Dodoo: Of course it is something that we are working on. You would see our press releases. I believe you would see us talking to people on radios and televisions and we would open ourselves to questions. But people might not lose sight of the fact that banking has challenges banking all over the world has challenges. What we are facing here probably, if you compare to some other places, you would say we have even done well because in some countries it is difficult for the banks themselves to even identify the issues. We should even pat ourselves on the shoulder by saying we [Ecobank] saw the issues. We investigated it. And I think this is a plus to the banks and the Central Bank that we know our job. However small we are we know our job and we know what we are looking out for and we would also want to thank the police this time around and also the judiciary. But there shouldn’t be any panic, there shouldn’t be a nose dive. We have checked our numbers not only Ecobank but all the banks you wouldn’t believe it over the past two months we all have increases in our deposit base. Maybe chit-chatting on the streets is different from the realities in the banks. I mean you would see at the end of the year when we publish our numbers that some banks have even grown more than 20 to 30 percent. So I can tell you we are not in dire straits.
Politico: Thank you.
Clement Dodoo: Thank you too.
© Politico 30/07/13
