Bex Nwawudu, managing partner and co-founder, CBO investment management, has nearly two decades of experience in private equity, investment banking, proprietary trading, and principal investing with a focus on mezzanine products.
Nwawudu possesses over fifteen years experience in Investment Banking and Trading working for ING Barings, and BGC as a senior principal. As debt and mezzanine finance specialist, he previously headed the Fixed Income Division at First City Monument Bank where he oversaw the development of the FGN Bond trading business, and raised over $500 million of debt and equity for Nigerian Companies.
Nwawudu holds an MA in Economics from St John’s College, Cambridge University, and an MBA from London Business School.
He spoke to peter ugwu on the need to funds to support SMEs growth in the sector.

CBO’s Concerns about Investments in the Nigerian IT SMEs Level
Information communications technology sector is one of the drives of any economy. The technology is one of the most important things you can participate in.
Everything we use around us involves technology. Technology has changed the landscape of so many things in the economy.
That is why we deemed it as an area for the development of Nigeria and where we should invest.
It is an area we are highly confident and truly believe that Nigerians can have real impact; we have a sort of mindset that enable us think differently, be creative, but sometimes have not been under-utilized or misapplied.
However, technology is an avenue for those creative thinkers to apply their thoughts and do so in a productive manner.

Assisting the Unstructured SMEs
The Small and Medium Enterprises (SMEs) provide the uplift for a greater impact on the economy. For instance, WasApp that was bought for $19 billion, but it had about 35 employees, are we to regard that as an SME? To us, there are some that will never be structured, while others gain structure.
Meanwhile, if we take the Nigerian commercial banks as another example, some are structured more than others. And those that are structure that will do well, grow, employ and provide impact for growth.
Such are entrepreneurs we are looking for; they will stand, but currently requiring avenues to get structured, partnership and growth.

CBO’s Investment Models to Avoid Mismanagement of Funds by SMEs
Investment models depend more on your opportunities. In some cases, we like to control the funds. There are cases we might want to occupy a position in the corporate governance such as being in the Board, be the financial director or any other strategic role in the organization.
The essence is to help them decide on best ways to manage the funds. We spend a lot of times developing opportunities, traveling globally to find partners or opportunities for these companies in other emerging markets and the developed markets.
So, they join the platform they are exposed to trends in US, Europe, Middle East, Asia and the rest of Africa.

Assessment of Government’s Policies on Funds for SMEs
We regard the Federal Ministry of Communication Technology initiative to an office on the local content development as instructive and a new dawn.
 It means we are focusing on local content in the sector. We have seen the success of local content development in the oil & gas sector. It is great to see in the ICT that government has started thinking along that path. It may take some time, but we will get to the destination where the sector will make more impact on the economy. In terms of funding, government has set up a number of funds.
Nevertheless, every government has its priorities. For instance, agriculture has over N100billion intervention fund, CBN mapped out N300 billion intervention fund for the aviation sector, the entertainment (Nollywood) industry also received some interventions, likewise the energy sector.
SURE-P is doing some interventions in several sectors; the call today is that, maybe, the government should add ICT to that list and set aside a fund to be managed by professional fund managers or create multiple sub-funds that will be managed by sub-managers to create competition and growth in that sector.
So, government can set aside N50 billion fund which could be broken down into smaller bits. Thus, each fund manager will raise its fund and manages it; investing it in the sector to develop people.

Investing on ICT Education Space
Education is the  key to whatever we are doing. The investments on start-ups, SMEs or interventions should not neglect the importance of the education sector to galvanizing the process.
I have visited few universities in Nigeria, meeting students, deans and other key administrators.
Our universities are generating young people who are excited about life, energetic and intelligent, but they need direction and opportunities so they can understand how their ‘energy’ should be spent during adult life.
You need to work in a firm to understand what work is; you can code or develop software, but if you do not know that somebody can pay you on that ‘little’ code that does a magic, how will you know that you should be working on that code. That is what we are crying to do.
We also want to see that the Office for National Content Development (ONC) brings the Nigerian education-universities, polytechnics and colleges, to now become accredited members, pass through internship that the private sector can give to the candidates. It is important to tie everything together.

CBO’s Assessment of Software Development Community in Nigeria
We are very excited by the commitment, enthusiasms and high-spirited interests shown by these developers. The young coders are building brilliant stuffs. It is a reflection of happening in the Silicon Valley except they do not have the money.
That is what we are driving at. We have seen young graduates who need to pursue their ideas; they need access to the market, mentoring, and those that will show them how it should be done.
Personally, I see it as a commitment that CBO is making; we are not here just to make money. In as much as we want to make profits and make returns to our investors, same time, we want to make major impacts domestically. By creating jobs you are giving peace opportunity to reign.
We cannot have idle Nigerians, watching at others developing their countries. It is high time we created a balance, fair and developed society, intellectually and otherwise.

Other CBO’s Targets in the Market
At the moment, we are assisting in the establishment of infrastructure. We want to support that market. Should investors register, what do they get?
How do we train the students? It means the education establishments have to register before the students can get international grants to get exposed to certain modern trends. Actually, the opportunities are endless, because IT permeates every sector.
What sector does not use technology? In the health, agriculture, manufacturing, aviation, etc., technology does it all. Talking about education, In Brazil today, the internet is used to teach thousands of students.
How about roads and infrastructure? Maybe we still construct roads for the sake of have accessible roads, but modern roads are pathways to several aspects of economic development.
For instance, new roads go with fiber cable dots. Thus, we need to develop our understanding of construction in that way to maximize the roads.

How Young Graduates Can Raise Capitals for Business Development
First of all, the young Nigerian graduates should see themselves bankrolled without applicable ideas. When you are a young person, you need guidance.
Those who have gotten the experiences should be your first chase. Actually, it is a challenge to the society. As time goes on, there should be funds for that class of citizens.
Example, in the UK, there is a Petty Trust. It is a trust you can raise $20,000 to set-up a business. But the key thing for us is, such young person, first goes into the market place, finds a kind of work or labour that enables them to learn.
The truth is that many entrepreneurs first work under successful entrepreneurs to get the out-side school skills. I envisage a time when most of the people working with us would come up with great individual ideas and can raise funds through us to kick-off a business. The whole concept is that the young shall grow.

Plans for Companies in R&D
Research and development (R&D) is very important in Nigeria. It hangs on intellectual property. I know the Office for National Content Development (ONC) is looking at developing a register of national IT property.
For instance, if you look at Facebook, it does not own buildings, it thrives on intellectual property and network. It is protected because of that.
Most of the links between IT companies are patents; they are not even physical. Nigerian banks cannot lend to you on that.
They do not know how to interpret the patent. So, they will be an evolution in the market where we will understand the patents and companies will know where they belong.
The lawyers will have to stand in the law court to protect people. Then, the companies will have room for growth: gain capital in a typical ways through equity and strengthen the case base of the companies.
It will come and this is the first step to it: you need an industry that understands it characteristics.