About 35 participants drawn from countries of the West African Institute for Financial and Economic Management (WAIFEM) are currently taking part in a week-long course on the implementation of effective risk management and good corporate governance practices.
Organised by WAIFEM and funded by the African Capacity Building Foundation, the course was, among others, designed to upgrade the knowledge and skills of participants in the assessment and management of financial risk. It was also aimed at enhancing understanding of attendees on the principles of good corporate governance practices.
In his welcoming remarks, Ousman Sowe, the Director of Administration and Finance at WAIFEM, who deputised for the Director General of WAIFEM, Prof. Akpan Ekpo described risk as an inherent feature of human endeavours, which he added, has been in existence since humans first walked on earth.
"For much of human history, risk was simply accepted as fate: something arbitrary and inevitable in the face of which human society was helpless. Managing risk is essential for a rational allocation of capital among competing investment projects, which is essential for economic growth," Sowe stated.
According to him, the financial crisis of 2007-2009 has been blamed on the rapid expansion of the financial markets, through the introduction of complex financial instruments without due regards to robust and effective risk management by the operators and regulators. Therefore, he noted, the impact on some financial institutions and economies had been catastrophic.
"Thus, the whole world has learnt salutary lessons, and such lessons include the need to understand the inherent risk in business models and institute appropriate risk management frameworks," Sowe said
He added that it was for this reason that WAIFEM considered it fitting and timely to design and execute a course on the implementation of effective risk management and good corporate governance practices.
WAIFEM, with the sole objective of building a sustainable capacity for economic and financial management in the countries of constituent member banks, focused on short-term customised courses/workshops for the benefit of central banks and core economic and finance ministries during the first four years of its operations, said Sowe.
"However, in January 2001, the institute rolled out a medium-term Capacity Building Program (CBP). The CBP marked a paradigm shift by WAIFEM from organising short-term courses to an integrated approach to capacity building encompassing the organisation of courses and workshops, demand assessment missions, as well as institutional building and follow-up missions," Sowe noted.
He further stated that as the scope of activities has increased, the coverage of the institute has expanded to include non-traditional user institutions, including the mass media, national parliaments and private agencies, such as deposit money banks.
In his keynote address, Bamba Saho, the Governor of the Central Bank of The Gambia, noted that about two years ago, the world had witnessed the greatest crisis of confidence in business and market capitalism. The resultant global economic meltdown, he said, is a rude reminder that no institution is totally immune from contagion in a rapidly globalising world.
According to him, the concept of corporate governance is more than a checklist of dos and don’ts in an organisation, and is not confined to only the top layer of the institutional hierarchy.
He stated that the recent market meltdown has pushed the systems of risk management of global financial system to the limit.
"But more profoundly and by virtue of hindsight, these systems have been found wanting. The main lesson learnt is that concerted and coordinated efforts are required to manage risk," he stated.
Governor Saho observed that the West African economies could not de-couple from that of the rest of the world and the fact that our region has not been adversely affected by the crisis should not lead to complacency.
He stated that the lessons learnt should rather cause a strengthening of the economic fundamentals, particularly in terms of attaining and sustaining macroeconomic stability, increasing productivity and accelerating economic diversification.
The Governor commended the organisers of the course, WAIFEM and the African Capacity Building Foundation for responding to the demands of members countries of WAIFEM to hold the course on effective risk management and good corporate governance practices.
