Reminiscences With Alhaji Muhammad Buhari Ali
Alhaji Muhammad Buhari Ali was privy to the processes that led to the setting up of the Nigeria Deposit Insurance Corporation (NDIC). He was one of the pioneer staff members of the corporation. He rose to the position of an executive director in 2004 before taking an early retirement. The 71-year-old insurance underwriter recalls the process that led to the setting up of the corporation and the early challenges the insurance subsector faced in the northern part of the country due to cultural and religious beliefs, as well as the role the NDIC played to cushion the effects for those who lost deposits in failed banks.
How did you start school?
I was born on July 27, 1947, to Malam Majidadi Gwandu and Hajiya Hadiza Jega of blessed memory. I was sent to a Quranic school at Modibo Usman House in Gwandu. Later, my elder brother, Alhaji Umaru Sidi Ali, took me to Kano, where I continued with my Islamic education before my admission into the Gidan Makama Elementary School, Gudulawa, where I spent four years.
I later got admission into Gwale Junior Primary School, Kano. At the elementary school, I held the position of a class monitor and later school prefect. I later passed my common entrance examination to Kano Teachers’ School.
What was your experience in your first day in school?
In my first day at Gidan Makama Elementary School, I was excited when I entered a classroom that had benches, chairs and exercise books. I was using these items for the first time, unlike in the Quranic schools where pupils sat on bare floor to learn before graduating to a wood plate called ‘allo.’
Insurance was very rare in those days, how did you get into the business?
I went into insurance after I left teaching. My brother happened to be a transporter, and in the process of renewing the insurance license of his vehicles, I became a regular customer at the insurance office. In the process I also got some people to insure with the company. Due to this, the then area manager saw my potential in the industry and advised me to take appointment with them. After consulting with my brother, I took the appointment with the insurance company as an underwriter/accountant clerk. They sent me to Lagos for a threemonth induction course. After the course, I returned to Kano and was put in charge of underwriting.
Did people understand what insurance was about?
Actually, our people in the North were skeptical about insurance, maybe because of our religious and cultural background. People here believe that whatever happens to them, Allah made it to happen, so there’s no need to insure risks.
When I took appointment in NICON in Kaduna we had insurance firms in Kaduna and Kano. I happened to be the branch chairman in Kaduna and we usually met to hold meetings from time to time. In the course of our meetings we considered it necessary to do public enlightenment about what insurance was about. Then we introduced a sort of meeting to make the insurance companies and other people to be meeting regularly. I remember that there was a time in Kaduna when we spent a week doing public enlightenment about insurance activities in newspapers, radio and television stations.
We enlightened the people on the importance of insurance and the need for policies because we felt that insurance was a risk one should take. Somebody whose house is gutted by fire would be devastated, and before he recovers he may have undergone lots of suffering. After our enlightenment campaign, gradually, people started showing interest in insurance policies.
What can be done to enlighten people about insurance?
It requires enlightenment, especially as the economic situation in the country makes it difficult for people to consider insurance. People are hesitant, so they prefer the third party policy system when taking insurance. You will find that some people are interested in third party policy, just to let the police and army allow them to pass. The comprehensive policy actually covers a whole lot. For instance, if somebody is covered under the policy and he suffers an accident, he will be compensated according to the damage on his vehicle. If you take a third party policy, you will not be compensated as it covers only the other person whose car has been hit and the insurer will repair it for him. With fire insurance, it is only when your car gets involved in fire that the insurance will take care of it for you. But I think that with the recent development in insurance, they are mainly on the third party fire incident.
Who were your schoolmates?
In my senior primary school, up till teachers’ college, I had a good number of friends; prominent among them include the present managing director of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim and a former clerk of the National Assembly, Alhaji Ibrahim.
How would you describe education in those early days?
After school hours, some of the children who did not have the opportunity to be enrolled in schools would compose songs to make fun of us; but that did not bother us.
Did you know you would go into the financial sector?
When I finished college, I started working as a teacher and rose to the position of headmaster in the Kaduna Education
Authority. That time, people were running from teaching, so it was mandatory to spend five years teaching. After five years I left. As I told you, it was in the process of assisting my brother with his insurance license that I switched over to insurance.
In those days, headmasters were highly respected; can you share your experience with us?
Before I became headmaster I was an assistant headmaster at Tamburawa Primary School at the outskirt of Kano State. It happened that the most recognised people in that village were village heads, imams and headmasters. We were just like councillors; anything the village head or district head wanted, he would call us to discuss and share advice.
How do you feel now, seeing how headmasters are being treated?
We were earning about 20pounds monthly. It was a big money. That salary made me to eat better food, as well as save and buy a motorcycle. But now, you find out that the money they are given cannot take them through a month.
How would you describe your first time in the NDIC?
I can call it accidental, in the sense that when I rose to an executive position in the conventional insurance, I was transferred to Lagos. When I considered my large family, I said I could not move to Lagos because then, life was very hectic there for a northerner. While I was in Lagos, I met the then governor of the Central Bank of Nigeria (CBN) who happened to be a close friend of our family. So I complained to him and he said they would soon set up an insurance company and he would recommend me. So when they set up the NDIC I joined them. When I went for the interview I thought it was a conventional insurance, but went they asked questions, I realised we were going into another form of insurance.
The interviewer asked what I would say as I was going into financial insurance. I said he should allow me to try. Thank God that I tried.
First, they put me in administration but I later moved to another section that dealt with bank liquidation. I happened to be the first set to liquidate banks, such as National Bank, Continental Bank, Merchant Bank and so on.
Whenever they decided to liquidate a bank, our managing director would call us to say we were going to do a hectic exercise, to surprise bank staff. We would use a whole week to carry out the exercise. He gave us enough money to take care of ourselves and usually told us we shouldn’t tell our families where we were going.
That means you really enjoyed yourself at the NDIC.
I truly enjoyed myself because when I left the conventional insurance I didn’t know that I would make what I made there. In fact, I even became the principal manager before I took leave of absence to do my postgraduate diploma (PGD).
Before I left, they gave me a condition that they would only allow me to go without salaries. I took the leave, and thank God that I completed my study successfully. Apart from furthering my education, another thing that made me to go for PGD was to show my children that with age one could still go back to school. I was about 60 years old when I went back to school, and all my family members were surprised that I could do that, even without salaries. By the time I finished my study, the NDIC had moved to Abuja.
The very year I finished my final exam I became the head of the unit in charge of insurance and security. When I completed the PGD, my managing director congratulated me and said he would compensate me. At that time, the Kaduna Universal Bank was having a problem and they were about to be taken over. So he sent me to be one of the executive directors because at that time, the CBN provided one executive director, so the NDIC provided one too. That was before it was sold to a man who happened to be a managing director, I think of Union Bank. It was a general circle, so we sold it. We also sold another bank, Cooperative, but they later gave it another name, Universal Bank. After that, we sold it to a new shareholder and went back to our work. When I went back to the NDIC I was sent to London, where I spent two weeks on administration work before I returned to Nigeria.
What was responsible for the failure of banks, and how did the NDIC cope with the pressure?
The NDIC was established to pay when a bank is in liquidation. We insured whatever you had. You would find out that after we took over all the processes, we started paying something, and later, when we sold the assets, we started sharing. That is why, from time to time, you see the NDIC calling on people to come and get their money.
Initially, people were hostile to us because the station wagon cars we were using had the NDIC inscription on them. When we saw people trying to attack us, we stopped writing on the cars. But when people later realised that we were helping them, they stopped attacking us. They realised that without us they may not get anything if a bank failed.
We started paying N50,000, and when we shared the assets of the bank we shared with them. When politics came, we increased the amount from N50,000 to N200,000.
Bank owners alleged that some banks were closed as a result of political vendetta. What is you take on that?
There was no such thing. It was during the military regime, so there was no issue of politics, but reality.
We don’t see much of failed banks these days, why?
We hardly find banks going into liquidation these days because liquidating a bank is very expensive. We feel that instead of liquidation, assisting the banks to survive would be better. That is why we formed the bailout. The NDIC injected billions of naira in banks in order to ensure that they survive. That is the innovation, and I prefer it to liquidating a bank.
Why did you retire from the NDIC?
I retired at the age of 58. That was two years before my retirement age, which is 60 years. The CBN introduced what they called early retirement incentives. The early retirement incentives would enhance your pocket and position; and they would overlook your debt ýto encourage you to go.
What they wanted to do was to make those who were ageing to go so as to recruit new people. I took that advantage because I knew that even if I stayed back to complete the two years, what I would have gotten would not be up to what I got now. So, to me, it was a blessing.
How would you describe the then CBN governor, Abdulkadir?
He was actually an innovator. He was the person who introduced the NDIC due to his wide experience. He performed very well. I am not saying this because I was close to him, he actually did very well.
Would you like any of your children to
go into the insurance business?
I can’t dictate for my children what profession to do, but if they want to do insurance business I will have no objection. Right now, I have two of my children already in the insurance business. One is in the NDIC while the other is in conventional insurance. And they are moving fast.
So my children can decide what to become. The one in the NDIC got there because when I was about to retire, I jokingly I told the managing director, who happened to be my classmate, that since I was going, he should let me bring a replacement. He laughed, but that’s how my son got it.
What are your hobbies?
I like travelling, reading and writing. I have written books about NICON Management, myself and my late son, who I love so much. It pained me when he died, but God knows best. He was at the Usmanu Danfodio University during his final year when had an accident and died. That was why I wrote a book about him.
How many books have you written so far?
The ones I printed are three, but all in all, I will say I have written five books.
Among them are NICON Management, Agricultural Insurance and three others.
Did you launch the books?
I planned to launch them, but I later felt it was not necessary. But I distributed to friends and family members.
What is your favourite food?
I like fura, being somebody from the Sokoto, Kebbi and Zamfara axis. We all like fura.
One of your hobbies is travelling; can you tell us some of the countries you have visited so far?
When I was in Maiduguri in 1977 I travelled to Makkah. That was my first pilgrimage. I was in London, America and so many other countries.
How is life after retirement?
I thank God. Before I retired I made investment in property. Right now, I earn from rents, I get my pension. I also bought lots of shares and that really helped me a lot.
When I got my retirement benefits I bought some houses and invested in shares.
What advice do you have for young people who want to go into the insurance business?
Honestly, due to the economic situation in the country, some people are struggling to survive, and that is making insurance business a big challenge.
Actually, our people in the North were skeptical about insurance, maybe because of our religious and cultural background. People here believe that whatever happens to them, Allah made it to happen, so there’s no need to insure risks.