nigerian banks

Business Lesson From Etisalat 550 BILLION Debt To Nigerian Banks

BASIC EXECUTIVE DEVELOPMENT PROGRAM

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Welcome to Kanselor University . Today We want to share with you some business lessons from the 550 billion Naira debt that Etisalat owes Nigerian banks. Etisalat Nigeria debt to Nigerian banks seems mind boggling to a lot of African businesses and most are wondering why these Nigerian banks will give one company such a huge amount of money when they need just a tiny percentage of that to grow their business.
Now, here are the lessons

  1. THE BEST PLAN AND PROJECTION CAN FAIL - Etisalat I heard from their projection planned that under the worst case scenario, the exchange rate of naira to dollar would be 300 only for them to wake up one day to hear that the exchange rate had hit over 400. The implication was that they now had to pay over sixty percent more. The lesson for you is that you need to understand that even with your best plans, things can collapse right under your nose. I know a young African entrepreneur that his friends pushed to start his own business promising to support him financially. When he started was when the economic recession hit. None of the friends came to his rescue.

  2. MAKE YOURSELF INDISPENSABLE ECONOMICALLY AND POLITICALLY - When the Nigerian banks wanted to take over Etisalat, the central bank of Nigeria and NCC stepped in to prevent that. LESSON - You must start to build political and economic allies as soon as possible no matter the line of business you are in because those are the people that will defend you at the time when your resources fail you. 

  3. BANKS GIVE MONEY TO BIG WELL KNOWN COMPANIES - The 13 Nigerian banks readily gave to one company what they would never think of giving a slight percentage to a smaller business. This is because small companies come with big problems with little returns while big companies come with big problems with huge returns. LESSON- Start to build the structures that will support a big company because that is the only way to attract investors with deep pockets.

  4. LEARN HOW TO HANDLE CREDITORS - Etisalat did not deny that it was owing the bank but asked them to given Etisalat the time to pay. They should the banks the other option that taking over will result in massive lose to everyone but given time, they will pay back. LESSON - Because you owe a lot of people does not mean you should shut down your business and run away. If you can come up with a good repayment plan, your creditors will even give you more money to re-stabilise your business.

  5. TAKE A KANSELOR UNIVERSITY ONE COURSE - A course like BASIC EXECUTIVE DEVELOPMENT PROGRAM will help you develop the key attributes that helped the management team of Etisalat withstand the massive financial shock.

Picture source CNBC AFRICA

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