fruits of Personal Perseverance

By Sibangani Dube
April 2012
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From an outsider’s point of view, it is easy to say all is well in the banking sector.

The clean and impeccable atmosphere and the ever-smiling bank tellers have created and fed this perception.

However, behind the scenes, it is a tale to tell as men and women engage in a rigorous effort to make things happen on our behalf. Ehrenfried Itamunua Meroro is a seasoned banker who has been in the business for over two decades.

He had had an illustrious career at the central bank and is now at Standard Bank Namibia. Through his eyes, we gain some insight in what goes on inside those attractive and calm buildings; tied to that is his rise to success making him a luminary in this vital sector.

He wears a clean cut image. His speech is loaded with exuberance as he takes us through his life journey with great diction, oozing with confidence and crystal clarity of mind.

The story of the phenomenal success of the Head of Risk Management Compliance and Legal Department at the Standard Bank Namibia can be best described as triumph over adversity.

“I owe my success to personal perseverance and personal accountability. I persevered in my education up to where I am today,” he says. In 1979, the political system became unbearable and this saw him and others crossing the borders into Botswana as refugees.

While in Botswana, he managed to continue with his education until Grade 12 and soon after, he became a teacher to fellow refugees including Zimbabweans who returned to Botswana after the Matabeleland disturbances.

He, however, regards his initial refusal to attend Botswana Secondary Schools as one of his costliest mistakes. This is because they wasted valuable time basing their perception that the Botswana Cambridge system was inferior to the Bantu education system back home during that time. After a long reflection, he dicided to attend Maun Secondary School where he completed his Cambridge Certificate in the first division.

Soon after completion, he got the scholarship to the USA where he ended up with an MSc. degree, setting him up on a lucrative banking career path. Over time, he has added weight to his career by attending and excelling in economics-related courses such as advanced statistics, econometrics and agricultural price analysis.

Moreover, he has attended high level training in management such as Economic Analysis of Structural Adjustments, Senior Management programme and Market Risk Management to name but a few at Stellenbosch University.

In 1991, Ehrenfried came back to Namibia and immediately started his banking career in the economics department as a research officer at the Bank of Namibia (BoN) in 1992. His determination and perseverance saw him rising through ranks and held very senior positions at BoN up to 2003 where he had his last assignment as head of banking services.

“I have been to all the departments of the BoN except for HR and IT,” he beams.

While at the central bank, he scored many firsts. He was among the first people at the forefront in the introduction and the issuance of the Namibian dollar. The milestone achievement of this magnitude is something Ehrenfried would like to be remembered for in the history of this country and the banking industry.

Ehrenfried was at it again as he and the late Lazarus Iipangelwa scored another success as they introduced the calculation of the real sector GDP indicator, which helps to calculate the actual performance of key economic drivers such as mining, tourism and agriculture.

In 2003, Ehrenfried felt as though he had travelled a full circle at BoN and therefore, he decided to leave for commercial banks and landed at Standard Bank Namibia. He started off in the credit department. Over the years, he has climbed the corporate ladder in the structures of Standard Bank Namibia to become the Head of Risk, Compliance and Legal department.

“It is ironic that I used to supervise banks but now I am being supervised,” he states.
Ehrenfried is passionate about the banking sector, particularly the risk department he currently heads.

“I work in a very volatile environment and there are no set formulae”, he says adding that the concept of risks management has grown to alarming levels over the modern years, thus placing a huge demand in mitigating the impact of these risks; both internally and externally so as to protect the deposits of the clients and to keep the integrity of the banking industry intact.

He explains that in life generally, anything can happen to anyone anytime. However, the banking industry has pertinent risks associated with the banking industry and the traditional risk is the credit risk, which comes in as a result of clients failing to pay back the loans borrowed from banks.

The BoN in this regard, has put in a legislation requiring commercial banks to hold a certain amount of capital to cushion the clients in the event of credit risks spiraling out of control. The other type of risk is the market risk. This type of risk emanates from the changes in the value of assets and the financial turmoil currently going on in the world is testimony to this. In the past, it was not much of an issue but lately, it has caught the attention of the BoN; once again requiring commercial banks to hold capital to cushion their clients in the event of financial meltdowns.

Operational risks come in as a result of failure in the internal control system, consequently resulting in fraud; something he keeps his grip on. However, there are international accords, which have been created to minimise the impact of the operational risks as they provide a frame work within which to mitigate and control operations. As per the requirements of Base II, banks are now also required to hold a certain amount of capital against operational risks. BoN monitors compliance on this requirement

“Operation risks can come from anything; from outsourcing arrangements going wrong, to fraud in the procurement system. It is imperative to therefore, have business continuity management strategies and controls in the event of a disaster,” Ehrenfried points out.

The department also deals with forensic investigations, especially in cases where fraud has been committed against the bank. As you know, the bank deals with the most sought after commodity; money, the potential for fraud remains a challenge.

In regard to the legal and compliance risks, Standard Bank Namibia adheres to the regulations of BoN as well as the best international practices and therefore, should make sure that issues around money laundering are stopped in their tracks as criminal syndicates often want to use the banks to make their money legit.

Ehrenfried, however, does not delve much into issues around money laundering as it is a big and sensitive issue, handled by the Central Bank of Namibia.

“The entire banking history has nightmares related to the emerging risks and not the historical risks, we don’t know what we don’t know,” he warned.

He added: “As commercial banks, we deal with the most sought after commodity and that is money, the question is, how much control you can put around to go after that person looking for that money?”

According to him, criminals have a tendency of moving to softer havens creating vulnerability in this spectrum; a move he says is only human nature, to tighten controls after an event but after a few weeks down the line, it is back to business as usual.

“We cannot stay alert all the time, otherwise, it defeats the whole purpose of living,” he asserts.

To make sure they are in control, he says, “We read around what is happening in the world and take the necessary preventative measures - we focus on emerging risks; what could go wrong in the systems, for instance, and we try to psychologically go into the criminal minds. We simulate and engage our minds fully to stay ahead of the game.”

The problems such as phishing, card cloning and replication of the bank’s website are among some of the challenges the banking industry faces. “We have made huge investments in technology to stay ahead of criminal activities,” he says.

Despite all these risks, Ehrenfried is confident that banks are the pillars of the economy, “Banks are the lubricants of the economy as they can propel the economic growth through the availability of funding to promote enterprises.”

His biggest learning curve has been to transcend from being an economist to a banking supervisor. This was a complete turnaround from calculating figures and GDPs and curves; a favourite of economists to a field dealing with legal financial issues and he is proud that the former BoN governor, Tom Alweendo saw the potential in him and today, that background serves him very well in his current position.

On career changes, he says, “There is nothing like a long-term career path; we all have the ability to learn as much as we can and have the ability to accept change. If you believe you can do it, you can do it but if you believe you can’t do it, then you won’t.”

Asked why he thinks BoN has been successful, he indicates that since the inception of BoN, it has been kept free from political interference. Such independence is very important as it allows the central bank to perform its functions without pressure from the political influence, which often turns a governor into a fiscal policy administrator as opposed to providing monetary policy stance of the country. The outcome increases risks in the banking sector and the economy at large.

“The BoN had the blessing of Tom Alweendo when he took over, as he ran it according to the best international standards, he is a practical and very strict person,” he praises Alweendo.

The bank, he states, got it right by recruiting and training the right people, even the current Governor, Iipumbu Shiimi whom he says he recruited due to his potential, all went through the same evaluation structures. Over the years, their confidence has growth to rise to the occasion whenever performance issues are called for.

Born and bred in Katutura some 55 years ago, Ehrenfried is full of praise for his late uncle, David Meroro who raised him, for playing a key role in shaping the character, the person and the destiny of his life.

“My uncle was my hero for the mere fact that he was very well focused and very rich. Despite all this, he took the endurance of becoming the Swapo national chairperson during the apartheid system era; a move that was met with the crude brunt of the then political environment but he stood firm,” he recalls.

He also draws inspiration from the former president and Founding Father, Dr Sam Nujoma, particularly for his perseverance and ability to make key decisions no matter what the situation is.

When all is done and he will have retired, he says he is looking forward to going into full-time farming, “Hereros are farmers and everything we do is built around cattle.”

Ehrenfried upon retirement plans to contribute towards the development of young people by motivating them to unlock their potential through various platforms. He is, however, at pains that his former high school, St Augustineum; a once productive institution currently does the opposite, “Something has gone wrong!” He laments. PF