“There is a time and season for everything under the Sun…” –Ecclesiastes
By Justice Wongar
Transitions are part and parcel of life and even as they occur, they signal a renewal of purpose. The advertisement for a new LBDI CEO is therefore interesting not only because of the significance of the bank in the economy, but the qualifications outlined for determining the outcome. These require the prospective applicant to have experience equivalent to 15 years in the industry, a graduate degree in related social science disciplines and various other qualifications.
Formed in 1964 originally as the Liberia Bank for Industrial Development & Investment (LBIDI), with funding by the Government of Liberia in partnership with the International Finance Corporation, European Investment Bank, Citibank, Lamco, Firestone et. al, this act attempted to deepen and widen the policy space for generating sustained economic development utilizing foreign and local capital. This was especially important because the country had not yet established a central monetary authority and Citibank served as the government central revenue depository while the International Trust Company (ITC), served as depository for the maritime funds. The Government of Liberia at the time viewed the challenges generated by the gap in its fiscal and monetary capacity could best be filled by creating a financial institution sufficiently professional to undertake the case of ensuring a sustainable endogenous economic architecture. That is to say the bank would analyze, review and nurture viable businesses that would provide the basis for development in the country.
In its first ten years (1964-74) the emphasis was on industrial development with emphasis on projects related to local manufacturing: Monrovia Breweries, cardboard packing, toiletries and other import substitution ventures. By the end of that period, a realization that the emphasis on industrial development was limiting its scope for engagements and the name was amended to LBDI, while an increase in lending to the agriculture sector increased. Simultaneously, with the change in national leadership, the Tolbert-led government formed the National Housing and Savings Bank (NHSB) and the Agricultural & Co-operative Development Banks (ACDB) in the 1970’s. These efforts, again, were to address the development challenges of the economy. Over time and due to management issues these institutions folded up with loss of customer deposits and damage to the nations’ economic development efforts.
The management of LBDI for its part, at the onset of the civil crisis, made a decision to open a commercial window as a deposit-taking financial institution. This strategic decision allowed the Bank to survive and later grow into one of the largest commercial banks in the economy. Some argue that this refocus was at the detriment of long term lending which is necessary for economic development.
So, in a manner of speaking, the LBDI represents a case of “…the LAST MAN STANDING…”
The qualifications listed in the advert for the position of CEO seems to be, on the face of it, normal. But a second look indicates a need for concern. Firstly, the relatively short duration of the application deadline, January 6, 2022 seems to be as if someone is in a hurry. It has been an open secret that the current CEO, John B.S. Davies, was on his way out especially after the departure of his two principal lieutenants a few months ago. Serious consideration by applicants (some of whom may not be in-country) is a first consideration, but even more important, the job requirements seem to be that of a LEAST COMMON DENOMINATOR (Masters in Business, Accounting, Economics and 15 years in the industry etc.). These qualifications, while relevant, are easily obtained and at least fifty applicants in Liberia today would qualify.
But you have to be NOT MORE THAN 55 years old!!!! Assuming you are 53 years old, or maybe 50 presently, you must have joined the industry when you were AT LEAST 35 years old, which is to say you must have entered the banking industry when Ellen Johnson Sirleaf became President of Liberia. Given the challenges the LBDI faces in ensuring its own survival, even while addressing our national economic challenges, these qualifications are much too modest. Any prospective CEO of the bank must not only have a world vision of how the bank must be transformed in an era of Fintech changes, but the capacity to deliver on and transform its personnel and organization into a value for money outfit.
That is the problem confronting the Board of Directors. Over the past two decades, without hopes of receiving adequate returns on their investment, shareholders have sold out their equity to the government and the bank has become a de facto government agency. This relationship with the government influenced many credit decisions and led to the challenges the bank is experiencing. It seems as though we are going to experience the same result of the ACDB and the NHSB. The GOL, as player and referee, is going down a path that will only sentence the bank to disaster. The Chairman of the Board, the Minister of Finance, needs to step back and allow an independent decision on the new CEO without prejudices that will impair proper assessment of applicants.
The new LBDI CEO must be able to convince the Board to provide enough independence of action while delivering on several major key performance indicators: Consolidate the institution by focusing on key market sectors. If the bank wants to remain a one-stop-shop, it must restructure by function: credit; marketing; investment research, commercial banking, consumer banking, investment banking, etc. To achieve this, an experienced veteran at the helm is necessary and not one as outlined in the advertisement.