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This being the speech as delivered by the Managing Director and CEO of Bank of Industry (BOI), Mr. Olukayode Pitan, at the induction ceremony for the Association of African Development Finance Institutions (AADFI) into the Sustainability Standards and Certification Initiative (SSCI) of the European Organisation for Sustainable Development (EOSD). The CEO Session held virtually on Tuesday, August 10, 2021.

Protocol

Good morning ladies and gentlemen. It is a great honour speaking at this event.

First of all, I would like to recognise the presence of the following personalities:  Mr. Arshad Rab, the Chairman of the International Council of Sustainability Standards and CEO of the European Organisation for Sustainable Development; Mr. Tom Hoyem, Board Member, EOSD and the International Council of Sustainability Standards, and former Cabinet Minister, Kingdom of Denmark; Mr. Thabo Thamane, my Chairman on the Board of AADFI & the CEO, Citizen Entrepreneurial Development Agency (CEDA), Botswana; My brother and colleague, Mr. Tony Okpanachi, CEO, Development Bank of Nigeria; Mrs. Patricia Ojangole, CEO, Ugandan Development Bank; and Cyril Okoye, the Secretary General of AADFI; the CEOs of other Development Finance Institutions here present. Ladies and gentlemen.

This is the second time in two months that I would be offered an opportunity to speak on the issues of the Sustainability Standards and Certification Initiative (SSCI). The first time was during our induction to the SSCI. I am truly delighted to be here this morning.

The participation of Bank of Industry in these meetings demonstrates the strong commitment of the Bank to issues of sustainability. It also expresses our commitment at BOI to the SSCI.

Bank of Industry

As you are aware, Bank of Industry is Nigeria’s oldest and largest national development finance institution. Our mandate is to accelerate the industrialisation of the Nigerian economy as a national strategy for sustainable economic growth, structural economic transformation, and shared prosperity. Therefore, our interventions cut across sectors and industries, as well as across the small to large corporates.

We have taken on the challenge of working with key stakeholders in our national quest to modernise Nigerian industries. Our Purpose Statement will reflect this, and the high impact goals will elaborate on it as we seek to obtain our SSCI certification. It will also speak to our mandate as a DFI.

I would like to briefly share my outlook of development finance, and the role of national DFIs in the post-COVID-19 world in which economies aim to “build back better.” (I am aware that this phrase is now being controverted, and some people feel we should be aiming to “build forward better”). Indeed, I believe we should be forward looking. In this view, development finance will become more important in the future that we are already having more than a glimpse of.

We are in the era of hyper-risk and disruption. The COVID-19 pandemic, on the one hand, is accelerating banking disruption. Perhaps this has become more noticeable due to the unprecedented rise in financial technology (fintech) and e-commerce / m-commerce in the global economy. On the other hand, the pandemic has tended to relegate to the subconscious the fact that we are in the middle of a major transition in the structure of the world’s economy, and that the Fourth Industrial Revolution (4IR) is gaining ground.

The hyper-risk is expected to cause hyper-risk awareness, given that we are now living in the age of hyper-digital communication. As those of us here know, the commercial banks are more likely to respond to this trend with traditional risk-aversion. As a result, the role of development finance to de-risk industries, the society and the environment will become more crucial.

So far, the role that national DFIs have been playing in financing this transition and fostering inclusive prosperity has been increasing, but not anywhere near the scale of need in our countries and the continent. Instead, we are seeing more direct interventions of central banks in industries and the emergence of more social-savvy funds, through crowdfunding, social bonds, and other collective financing schemes.

The dilemma, therefore, is whether national DFIs would stand by and watch others take over these activities and diminish our roles, or we would embrace the need to scale up fund mobilisation, and scale up our financial and non-financial interventions, and scale up our impact. The national DFIs that would remain relevant are not those that remain traditional in orientation – relying on funding from the Treasury or the central banks. These sources remain important, but there is demand for additional sources of fund mobilisation to invest in the local economies and in enterprises in the local communities.

My perception of the SSCI standards is that it will provoke new thinking, helping organisations to harness the talents of their internal stakeholders to achieve institutional sustainability. At the same time, the Sustainability Standards is very outward looking, challenging value-based financial institutions to embrace opportunities (especially those that are by no means traditional) in the fast-changing world.

When BOI was looking for a programme to guide its sustainability journey, we were looking for a programme that can make real and measurable impact within the organisation as well as provide a strong credential for our commitment and action. There is no doubt that SSCI fulfils these criteria, and we are excited even at this early stage of implementing the Standards in BOI.

I would like to thank the EOSD and its local partner, Financial Nigeria, for their support so far, which I have been assured will continue.

I would also like to appreciate the efforts of my Board of Directors for giving us the necessary support to imbibe this initiative, my colleagues in the Executive Management Committee of the Bank, and the staff in responding to the call for the implementation of SSCI in Bank of Industry.

I believe it is a right decision that AADFI, the umbrella body of Africa’s development finance institutions, would also sign up to the Sustainability Standards. In this regard, I would like to congratulate the Board of Directors of AADFI, particularly the Chairman, Mr. Thamane and the Executive Secretary for this initiative that the association is embarking upon. It will in no small measures encourage other DFIs in the continent to take the issues of sustainability more seriously.

Thank you all for your kind attention.