Monye: FG Must Embrace Risk Management Principles

President of Risk Managers Association of Nigeria, Mr. Jude Monye, in this interview with Nume Ekeghe, spoke about how the recession could have been averted if the federal government had taken risk management seriously. Excerpts:

For a while now, we have come to accept that the Nigerian economy is in a recession. What is your assessment of the economy presently?

Recession is an appropriate terminology to describe the current circumstance faced by the Nigerian populace. This circumstance (recession) is typically characterised by high unemployment, falling income, increased government borrowing and widening inequality between the rich and the poor. The average man on the street however, is likely to understand recession as his/her inability to afford a loaf of bread due to a hike in price from N250 to N350. That is, a 40 per cent increase with no commensurate rise in salary or earnings. Can this situation be as a result of no planning? Or were we just non-chalant about the outcome of our decisions or did we rather leave everything to time and chance? The list of questions can continue unending except we embrace risk management.

What role do you think risk management can play in the current situation?

Risk management is the process of identifying, analysing/evaluating as well as providing mitigation strategies to curtail risks. To minimise losses and withstand internal and other environmental threats to business and corporate/national existence, individuals, corporations and nations need to imbibe a risk management culture.  The recession experienced in Nigeria clearly shows the lack of appreciation of the concept of risk management. Indeed, it would be shameful for any organisation either public or private to claim ignorance of the concept and practice of risk management in this country when there is a recognised professional body known as the Risk Managers Association of Nigeria (RIMAN). RIMAN has acquired a charter status and currently prepares individuals for professional risk management exams yearly. To constantly educate its members and keep them abreast of global risk management practices, the body holds trainings every quarter and prides itself on the fact that any bearer of the Chartered Risk Manager (CRM) designation in Nigeria can comfortably compete with contemporaries across the globe as the designation confers on the bearer, a certification of knowledge of both local and international risk management practices. In fact, the final stage of the three-stage CRM exam which commences in April 2016, will be taking place in April this year where successful candidates will be awarded the CRM designation if they satisfy other conditions including requisite risk management experience for at least two years.

What would be your advice to the federal government?
As custodians of the public trust in terms of policy direction and regulation, the importance of risk management in the public sector cannot be overemphasised. If we had not left everything to chance or otherwise taken deliberate steps to employ the technical expertise of risk managers, the recession in Nigeria would have been avoided or at worst minimised. While commending the private/corporate sector in Nigeria with respect to the practice of risk management, it is clear that the public sector has a lot of catching up to do. Risk is inherent in every business or organisation, even in our daily lives. The difference lies in the type of risk each organisation is exposed to due to business or environmental peculiarities. Therefore it is safe to assume that every decision maker is a risk manager. However, for a decision maker to effectively manage his business dealings, adequate knowledge of risk management is critical for every decision taken. If risk management is important to private businesses, then it is certainly important for those managing the affairs of the nation. Therefore, if government had designed its policies around key risk management mitigation strategies, our economic situation could have be better handled to avert this current recession.

So what is the way forward?

Often, the errors that resulted in today’s economic situation were made not because of the carelessness of those in position to make such decisions, rather, because of the lack of knowledge of risk management. As a nation we have had our ups and downs, but for the common man on the street, our present situation is seen as the biggest low. We cannot afford to find ourselves in the dark side of life again. Therefore, we must stand up and obtain knowledge as “knowledge is power”. We need to be risk informed, more aware of the consequences of our decisions in steering the economy of Nigeria and place the right kinds of people in strategic positions to steer the Nigerian ship. RIMAN through its risk management certification program is a first step in the right direction. The body was founded on March 29, 2000 to promote best practice and advocacy in risk management and other related disciplines in Nigeria. Through a pool of industry experts and seasoned professionals, the risk management body provides distinct and value-added services. It has currently set a national standard in Professional designation with the CRM certification through its on-going Certification programme and Mandatory Continuing Professional Education (MCPE). Currently, all commercial banks, merchant banks, development banks and non-financial institutions in Nigeria, are members of the association with individual membership growing considerably since 2006. RIMAN collaborates with regulatory authorities in policy advancement to ensure best practice in the financial and non-financial industries. It has as members of its Board of Trustees, two  directors of the CBN and other very experienced risk professionals including banks’ chief risk officers and senior partners in consulting firms. It is also worthy of mention that the erstwhile Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi serves as the Lifetime Patron of RIMAN. This showcases that membership of and partnership with this body brings to fore the ability to tap into highly resourceful and experienced risk management minds that can guide our nation aright by setting the path to good corporate governance in the public and private sectors, providing valuable risk management education and structured guidance in risk management practice across the various levels of government and economic sectors.