Technology can curb terrorism in Nigeria

Nigeria must deploy technology to curb terrorism - Chams MD

In a chat with Biodun Coker, the Group Managing Director of Chams Plc, Mr. Demola Aladekomo spoke on the future outlook of the homegrown Information and Communications Technology company, its strategic and holistic investments in e-commerce infrastructure which positions it to be one of the drivers of CBN’s cashless economy initiative, as well as the role of national identity management system in curbing terrorism. Excerpts. 

Chams Plc was listed on the Nigeria Stock Exchange (NSE) during the global financial crisis in 2008, after a successful private placement in which it raised N5b. To what extent did this impact your overall performance? Is an Initial Public Offer (IPO) in the works?

Our private placement no doubt was very successful as you rightly said and the fund we raised was used mainly to expand the business and build lasting infrastructures to strategically position us at a vantage position in our industry. Albeit  our  share price was badly bruised and battered because we got listed on the Nigerian Stock Exchange in the wake of the global financial crisis. But we are not alone; many other equities were affected by the negative development, which resulted in investor apathy on the Nigerian Stock Exchange. The market has been losing value on a daily basis, if you observe.  I do not think it would be wise for us to return to the capital market to raise funds.   Our present position is okay for now but our main focus is firstly to create value for our stakeholders by returning to profitability. Investor apathy does not make the capital market too friendly in terms of fund raising at this peculiar times.

Are there still opportunities that Chams Plc can leverage in the capital market to further strengthen its business? Are the company’s options strictly limited to the money market?

 Many people got hurt, during the crisis. The performances of listed equities are not where any investor would want it.  It would be very insensitive on our part to want to raise funds or any form of capital from the equity market. Presently, we have invested in a lot of infrastructure that should generate ample income in due time.

Initially, our investors queried why we were investing heavily on infrastructure, but we made them understand the rationale behind it. It is like building toll road, which after completion would consistently generate good income. I can say without equivocation that they are happy, as we are now ahead of our contemporaries due to the investments that we made. The opportunities for us are in areas of beneficial infrastructure. 

How close is Chams Plc to attaining the business goals set by the company during its transition from a privately held company into a quoted company more than 3 years ago.

In terms of projections, we are doing great. We wanted to dominate identity market and e-payment market, which we have achieved, though not as fast as we wanted.  Considering the recent economic downturn, we have done well but there is still room for improvement. Within the period of our listing and now we have secured 4 CBN licenses all in e-payment related sector. We also set up the Guinness World Record holding ChamsCity centres in Lagos, Abuja and Port Harcourt as platforms to aid identity management.  

You just held your annual general meeting, where you declared significant improved earnings for the 2010 financial year. Turnover rose by 50 per cent, while gross profit jumped by 280 per cent, but profit after tax did not record similar growth. It was however observed that you impressively made up for it in the first half of 2011 (Q2).How did this come about?

Consistency, has been key in attaining our goals, as we always strive to do our best, in whatever we do, also staying focus has really kept us going.   

What is the future outlook of Chams Plc, considering the fast changing dynamics of the global Information and Communications Technology terrain? What does this portend for its shareholders?

Globally Information and Communications Technology plays an important role. Without its optimal use, no country can attain speedy socio-economic growth and development. Realising this, government has created a Ministry dedicated to ICT. Equally, the recent policy formulation on e-payment and proactive pursuit of its implementation by the Central Bank is also beneficial to the country’s Information Communications Technology sector and the economy at large. It will revolutionize and move the country’s financial system forward, fostering financial inclusion, transparency and improved efficiencies.

This is most advantageous to us. Let us consider the area of PoS, we have invested in about 5250 terminals, customized to suit our market by Bitel. It means we have laid down a good foundation. We are one of the four CBN PTSP licensed operators, but knowing that we are one of the best, that easily translates to easy domination of the cash market, which also means more income for us. We are in the process of deploying PoS across the country, in partnership with the banks. Nigerians would understand and appreciate the service we are going to deliver better.

Chams Plc invested funds raised from its Private Placement in the ChamsCity digital malls (Lagos, Abuja and Port Harcourt), data capture equipments, transaction-switching platform (ChamsSwitch), mobile payment platform (ChamsMobile), data centre to host and process transactions, PoS, among others. How do you intend to take advantage of these infrastructures to return value to your shareholders?

 This is a very interesting time for us at Chams, we have been investing in equipments and infrastructure for about 6years and during this period, we have won the trust of the market. It took 6 years of hard work and resilience to put all this together. We believe it is about time our shareholders benefit from their investment. Very soon, there would be a turnaround in our market shares. Our specialties, which are identity management, e-payment and transaction systems, are becoming very useful not just to the financial sector but also to the economy.

I must give the credit to our board of directors. We suffered a setback when national identity card project on which we had invested heavily was cancelled in 1992.   But the board of directors advised that we focus on infrastructure and today it has paid off.

How equipped is Chams Plc in terms of the human capital needed to optimally deploy these infrastructures for its business operations? Is the company dependent of foreign technical partnerships, expatriates or local talents to drive its business?

 We have enough expertise to take off.  Chams Plc has built capacity over years across its various cadres. Our people have been part of the process of developing these infrastructures that we have today, right from ideas to design and implementation. It will not be a problem delivering quality and efficient service to Nigerians, as company. We also have very strong partners in Bitel. We are taking advantage of both local and global skills, competence and experience to deliver value.  We are very capable. We have all that it takes to deliver exceptional e-payment, identity management and transaction systems products and services to public and private enterprises.

Nigeria is transiting into a cashless economy. As an identity management, payment and transactional systems company, how well positioned is Chams Plc to leverage this opportunity.

I must say that Chams Plc is indeed very happy with the CBN over the cashless economy policy, especially as it concerns mobile payment. We appreciate the initiative and the fair manner in which it was handled. When the CBN, came to Chams Plc for inspection before giving us the go ahead, they were impressed with what they saw. This is because we built expertise and invested in identity management infrastructure. ChamsMobile, our wholly owned subsidiary will leverage our wealth of experience and strong partnerships to expand Nigeria’s financial circle through an all-inclusive strategy to reach the unbanked and offer them a platform for empowerment that will change the way they transact business and live daily. We are confident that through our unique solution we can finally begin to look at a cashless society as mobile payment becomes increasingly acceptable at all levels in the society.

 Identity theft and scams have remained the bane of e-commerce even in countries with advanced technological infrastructure and comprehensive national identity management database. Does this not pose a major threat to the Central Bank of Nigeria’s transition to a cashless economy initiative?

 Identity theft remains a major threat globally, especially in a cashless economy initiative. It does pose a significant threat to the CBN’s cashless economy initiative, with a financial services industry bedeviled by fraud. This problem is not peculiar to Nigeria; however, a well-implemented identity management scheme will reduce associated risks. The KYC (Know Your Customer) challenge facing banks can be solved through an identity management scheme, making it possible for banks to know their customers in and out. We have the expertise to deliver identity management solution, which would go a long way in helping to curb fraud. 

Nigeria has been faced with the challenge of collating accurate database that could assist its economic, social and political growth. In recent times, government has made moves to tackle this challenge. Chams Plc is part of this effort. When will this become a reality?

Chams Plc started a pilot, which is up and running in six states. By 2012, we will have that running. It is not going to be complete as we have 12-year concession for the identity card for the country. I don’t know if people would respond to the enlightenment. Sim registration, we are yet to register 40 percent however people respond better to legislation by government, for example if government sets a period for people to respond, they do that easily and quickly.

 How do you hope to overcome the likely hurdles of putting together such an accurate figure considering the fear by many Nigerians that it will be tied to tax payment, as well as political sentiments (that disbursement of states funds will be affected)? There is also the issue of inaccessible terrain and insufficient training for the enumerators.

The country has rough and challenging terrain in some region. We may not be able to capture the 150million Nigerians, but in as much as we capture 99 percent, that would be considered a success.  Some people will try as much as possible to avoid registration due to all sort of personal reasons. I strongly believe that an enlightenment campaign on the benefits of the national identity management scheme will bring the number of people in this category to the barest minimum.

 As an ISO Certified Company, we are up to the challenge. For instance, in the area of Sim registration, we have deployed well-trained personnel and quality hardware in the execution of the project which winds up soon. This was also supported by innovative processes put in place to enable us deliver on deadline, whilst ensuring that the objectives of exercise such as curbing of mobile phone related crimes are achieved.

On the other hand, we have the Chams Consortium, made up of Chams Plc and Nextzon Communications, while One SecureCard Consortium is made up of Interswitch Nigeria Limited, SecureID and Iris Technologies, working the NIMC on the identity management database. For a country the size of Nigeria not to have a robust and viable National Identity Management system was scandalous. We are therefore committed towards creating this new beginning that would lead the way in the image and identity management for the people of this country.

Chams Mobile is one of the licensees granted approval-in-principle by the Central Bank of Nigeria to operate mobile payment services. What is the status of Chams Mobile and what value does it hope to deliver to Nigerians?

In a few days, we expect to substantive approval, a full license from the CBN to operate mobile payment services. We have about 90 million mobile phone lines in the country, making it compelling to make transactions cashless without visiting a bank, thereby improving access to basic financial services such as person-to-person transactions and remittances among millions of unbanked Nigerians. Using the ChamsMobile platform, Nigerians will be able to conduct basic transactions such as airtime vending, utility bills payment, international remittances, cardless withdrawals from ATMs, as well as fund transfers, without visiting a bank. We will also bring our expertise in identity management to bear on our mobile payment services, thereby ensuring the integrity of transactions, guaranteeing our customers peace of mind.

 Mobile payment was immensely successfully in kenya as the service was provided by Safaricom and is known as Mpesa raking in over N1.34trillion, in 2010. Nigeria being the most populated country in Africa, with a population of over 150million, how do you think this same feat can be replicated in Nigeria making it even bigger than Kenya's success?

 Nigeria is one of the fastest growing mobile country in the world, you find mobile phones everywhere in the country. We now have sophisticated phones in the country, reinforcing our strong believe that mobile payment services will be very successful in the country. However, most things in Nigeria defy economic logic; therefore, we would rather not forecast. Guided by the CBN, we have put everything in place to ensure that it is very successful, but time will tell.

 Technology is being used world over to tackle the menace of terrorism. Nigeria is certainly is not adequately equipped in that regard. Where do we start from as a country in terms using technology to stem the rise of terrorism and crime in Nigeria?

We were very happy, when it was suggested that technology should be used to curb terrorism in Nigeria. It is a known fact that technology is strategic in the fight against terrorism, as seen in developed countries, where it has helped to reduce the menace to the barest minimum. Likewise, we need technology to get it reduced in this country, without which we will not achieve much in our counter-terrorism efforts. A situation where we do not have a database of identity means we do not know ourselves. If that is the case, it would be difficult use it to solve any crime, not to talk of curbing terrorism. I really do not understand how we got to the level where people are killed, bombed without any clue to work on.  Prior to this time, we made a case for it, but nothing was done, but we are happy that government established National Identity Management Commission (NIMC), now we can know who used what, where an individual went, and most importantly, who he is. With that, we can forestall crime to the barest minimum.   

  The CBN recently reversed its policy on offsite ATMs allowing financial institutions to deploy ATMs outside their premises. Chams Plc is one of the firms licensed by the CBN to deploy offsite ATMs. How has this policy reversal affected your business? Has your company incurred any loss?

 The answer is yes. The policy reversal was announced when we were about closing a deal. They are trying to amend that policy midway; deliberations are still ongoing with the banks. We are yet to hear of a final decision. I do hope that the CBN would come out with a policy that would be in the best interest of all stakeholders.