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MARCH 2018 | ISSUE 51

MARCH 2018 | ISSUE 51 A CPI Financial Publication

Duba Dub uba bai Techno Tech cchno hno n logy and n Med nd edia ia Freee Zone Z Authority

Africa: the year for investment Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global Group

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Africa: the year for investment Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global Group

05/03/2018 18:11

AFSIC - “One of the most important African investment events held globally”

Investing in Africa 2nd - 4th May 2018 Park Plaza, Riverbank, London


2018 Premier Sponsor

2018 Gold Sponsors

2018 Meet African Dealmakers (MAD) Event Sponsor

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25/01/2018 15:54


MARCH 2018 | ISSUE 51


Essential financial news from around the continent

10 Spotlight: Nigeria HAPPENINGS 12 SBM looks east and west 13 Ellen Johnson Sirleaf wins 2017 Ibrahim Prize

COVER STORY 22 Africa: the year for investment

OPINION 14 Can Kenya and Ethiopia help

COUNTRY FOCUS 28 Standing on the precipice

17 How financial inclusion can beat

Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global Group discusses the growing Gulf-African trade corridor and what the economic landscape for investments looks like in 2018

poverty Financial inclusion is a critical component to development, says Jacqueline Musiitwa is the Executive Director of Financial Sector Deepening Uganda

South Africa is in need of reform to put its economy on the right track

34 Will South Africa’s new leadership usher in a new era of conscious capitalists?

MARKETS 20 US economy takes limelight

| ISSUE 49

Egypt: the investment gateway to Africa Hassan Abdalla, CEO, Arab African International Bank

2017 Sound prospects Morocco to return

pects Sound pros historic to historic return to to return o to


Morocco Morocc

rates growth growth rates

Get the next issue of Banker Africa before it is published. Full details at:


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OPINION frustraons Africa faces fiscal


GOVERNANCE regulatory reform Reducing risk with


TRAILBLAZERS of Africa Building the business

Get the next issue of Banker Africa before it is published. Full details at:

Hassan Abdalla, CEO, Arab African International Bank

A CPI Financial Publication

A CPI Financial


Egypt: the investment gateway to Africa

Zone Authority

to historic growth

Get the next issue of Banker Africa before it is published. Full details at: Follow us on Twitter: @bankerafrica



OCTOBER 2017 www.bankerafric

Dubai Technology and Media Free Zone Authority

build a closer East African neighbourhood? More must be done to build East African regional integration, says Christian Toben, Regional Head, Africa Commerzbank


Until our next issue,


IN THE NEWS 6 News analysis: Zuma leaves office

and Media Free


ello and welcome to the March issue of Banker Africa. I’m happy to say that we are upping the page count of Banker Africa to give you more content in every issue. You will also begin to start seeing slightly longer pieces than before throughout the course of the year. This month has had several interesting events occur on the continent, he most fresh of which as I write this being that of the resignation of Jacob Zuma as the President of South Africa. The now former-president has been embroiled in corruption scandals throughout the course of his tenure and his resignation closes a chapter on what has been a very drawn out affair. We cover this in our News Analysis on page 6. In addition, South Africa is also the subject of this issue’s Country Focus, beginning on page 28. We aimed to look at what the current state of affairs is in the South African economy, and what will need to be done by the country’s new administration, headed by Cyril Ramaphosa, in order to put the country on track for long-term economic prosperity. The West African nation of Liberia saw its first peaceful transition of power since 1944, with George Weah taking up the mantle of President from Ellen Johnson Sirleaf. Following her resignation, she has been awarded the 2017 Ibrahim Prize for Achievement for African Leadership. The award itself had previously been on a two-year hiatus as the judging panel had not seen any leader fit to receive it. We cover this in more detail on page 13. Our Trailblazer piece this month is on the technology start-up CrashDetech. The company was founded on the simple idea of using existing smartphone technology to detect vehicle accidents and dispatch emergency services personnel but has begun to offer an additional range of services. Turn to page 48 to get the full story.


Dubai Technology





OPINION Why the private sector’s hype about the African middle class isn’t helpful


COUNTRY FOCUS Investing in renewable energy in Ethiopia


TRAILBLAZERS Bridging the gap

06/03/2018 10:03


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MARCH 2018 | ISSUE 51




Chief Executive Officer TONY LONG Tel: +971 4 391 468

Sales Director OMER HUSSAIN Tel: +971 4 391 5419



Editor - Banker Africa MATT AMLÔT Tel: +971 4 391 3716

Business Development Managers SIMON MOTWALI Tel: +971 4 433 5321

Editors NABILAH ANNUAR Tel: +971 4 391 3726

GOVERNANCE 36 Francophone Africa to the fore

Dr Cheick Modibo Diarra, former Prime Minister of Mali speaks to the challenges facing francophone Africa and how to attract international corporates to the continent

SUKUK 40 A golden opportunity

Africa should use its natural resources to back new Sukuk, says Prof. Luqman Abdi Ahmed, Senior Adviser & Consultant, Al Amanah Consultancy

44 Sukuk could be the key to

unlocking Africa’s potential

TRAILBLAZER 48 Crashing into the future

TECHNOLOGY 52 Financial services disrupted: open banking and AI

54 ‘Consumerising’ the enterprise

VENTURE CAPITAL 58 Venture forth

Eva Warigia, Executive Director, EAVCA speaks with Banker Africa about what 2018 holds for the venture capital space in East Africa

INVESTMENTS 60 Rocky wealth

Dev Shetty, President and CEO of Fura Gems speaks to company’s expansion plans into the Mozambican precious stone market

62 Egypt parliament passes bankruptcy law

AWARDS 63 Banker Africa – Southern Africa Banking Awards 2018 voting announced

THE LONG VIEW 64 A new horizon THE VIEW 66 Photo and chart of the month

service experience

EVENTS 56 Seamless North Africa Log on to for news, polls, events, analysis, blogs, features, commentary and more.

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the best of the best in East Africa!


STARTS Preparation and research is underway for the Banker Africa Awards. The Awards are grouped in four regional categories: North Africa, Southern Africa, East Africa and West Africa.

APRIL 2018

To learn more about the Awards process, please email

CPI Financial The professional face of financial media CPI Financial is Africa and the Middle East’s leading financial publisher with a portfolio of market-leading products educating and informing readers about the latest trends and developments in banking and finance as it affects them.

CPI Financial FZ LLC • PO Box 502491 Al Shatha Tower, Office 1209 Dubai Media City, Dubai, U.A.E. Tel: 4681 391 4 )0( 971+ • Fax: 9576 390 4 )0( 971+ •

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Zuma leaves office After intense pressure from within his own party, Jacob Zuma resigned his post as President of South Africa


acob Zuma, 75, announced his resignation in a televised address stating that he would quit with immediate effect. “No life should be lost in my name. The ANC should never be divided in my name. I have therefore come to the decision to resign as president of the republic with immediate effect,” said Zuma in his speech. The resignation came at the end of a tumultuous day in South African politics which began with a dawn raid on the Gupta family who have been at the centre of a longstanding corruption scandal involving Zuma. The raid set the stage for an announcement later that day by ANC officials announced that they would support an opposition party’s no-confidence motion the following day. The announcement of Zuma’s resignation came shortly thereafter. Zuma noted in his speech that he disagrees with the decision of the ANC leadership and that he has, “always been a disciplined member of the ANC.” The resignation cleared the way for Cyril Ramaphosa, the deputy president, to be sworn in as president. Ramaphosa won an internal election last December to become the leader of the ANC and is regarded as a head of the reformist wing of the party. “The momentum built by Ramaphosa seems sufficient to avoid the most pressing concern, the spectre of a downgrade of South Africa’s long term local currency debt rating by the rating

President Jacob Zuma addressing the Nation on his resignation (CREDIT: GCIS/GOVERNMENTZA/FLICKR).

agency Moody’s. Such a step would trigger South Africa being excluded from Citi’s World Governance Bond Index. RMB Morgan Stanley projects a potential outflow of $5 billion if this happened,” said Jakkie Cilliers, Chair of the Board of Trustees and Head of African Futures & Innovation at the Institute for Security Studies. Extraordinary Professor in the Centre of Human Rights, University of Pretoria on The Conversation. Zuma’s nine years in office where marred by scandal and have undermined the popularity and legitimacy of the ANC. In the 2016 South African municipal elections the

ANC experienced its worst electoral performance since it was elected to power at the end of apartheid and was defeated by the opposition Democratic Alliance in the capital Pretoria. These losses may indeed have been one of the driving forces behind the final driving force within the ANC that led to the support for a vote of no-confidence. Zuma, himself a former member of the military wing of the ANC, rose through the party’s ranks to become president in 2009 and leaves near the end of his last constitutionallymandated term.

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in the





SWIFT’s annual traffic exceeds seven billion messages in 2017

Capital Intelligence Ratings has affirmed Banque du Caire’s Financial Strength Rating (FSR) at ‘BB-’ with stable outlook. The rating is supported by the recent Tier 2 capital increase and improved capital adequacy ratio (CAR), comfortable liquidity (though still subject to systemic risk) and the strengthened loan-loss reserve (LLR) cover for non-performing loans (NPLs). Fitch Ratings has affirmed Mauritius Commercial Bank’s (MCB) LongTerm Issuer Default Rating (IDR) at ‘BBB-’ and Short-Term IDR at F3. The Outlook on the Long-Term IDR is Stable. MCB’s IDRs are driven by its Viability Rating (VR). The VR reflects MCB’s strong domestic franchise, including market shares of domestic loans and deposits in excess of 40 per cent. Fitch Ratings has affirmed Fidelity Bank’s Long-Term Issuer Default Rating (IDR) at ‘B-’. The Outlook is Stable. The bank’s Viability Rating (VR) has been affirmed at ‘b-’ and Support Rating at ‘5’. Moody’s Investors Service has placed under review for downgrade Banco Angolano de Investimentos ratings, including its B2 long-term local currency deposit rating, B3 long-term foreign currency deposit rating, b3 baseline credit assessment (BCA) and B2(cr) long-term Counterparty Risk (CR) Assessment. Fitch Ratings has affirmed Diamond Bank’s Long-Term Issuer Default Rating (IDR) at ‘B-’. The Outlook is Negative. Capital Intelligence Ratings announced it has affirmed Société Tunisienne de Banque’s Financial Strength Rating (FSR) at ‘B+’. The FSR is supported by the capital position, improved liquidity, and increased revenue. The rating remains constrained by the very high level of non-performing loans (NPLs), low effective coverage against NPLs, accounts qualification and a weak economy.



Following double-digit growth in global payments SWIFT’s FIN traffic rose to an all-time high of 7.1 billion messages in 2017. While SWIFT’s FIN traffic grew by nine per cent over the year, FIN Payment traffic rose by 12 per cent, driven by growth across all regions and the adoption of SWIFT’s gpi service.

AfDB approves ZAR 140 million loan for African Local Currency Bond Fund The Board of the African Development Bank has approved a ZAR 140-million loan (about $10 million) to the African Local Currency Bond Fund (ALCB Fund), to enhance the Fund’s portfolio and promote the development of domestic capital markets across the continent.

Egyptian non-oil private sector stabilises during January Following a deterioration in December, business conditions in the Egyptian non-oil private sector broadly stabilised in January, mainly reflected in both output and new orders, according to the Emirates NBD Egypt Purchasing Managers’ Index (PMI).

TDB raises $332 million equivalent in its first Middle Eastern-focused dual tranche syndication The Eastern and Southern African Trade and Development Bank (TDB) has successfully completed $332 million equivalent Dual Tranche (conventional and Islamic) Dual Currency Syndicated Term Facilities on 20 December 2017. The launch amount of the transaction was $200 million but the commitments received amounted to the equivalent of $332 million.

UAE Exchange partners with Groupe Banque Populaire for remittances to Morocco Global money transfer, foreign exchange and payment solutions brand, UAE Exchange, has partnered with Groupe Banque Populaire in Morocco, to enable remitters to send money from UAE Exchange branch to the bank.

Moody’s Investors Service has downgraded the issuer rating of the Government of Kenya to B2 from B1 and assigned a stable outlook. This concludes the review for downgrade that commenced on 2 October 2017. The drivers of the downgrade relate to an erosion of fiscal metrics and rising liquidity risks that point to overall credit metrics consistent with a B2 rating. The fiscal outlook is weakening with a rise in debt levels and deterioration in debt affordability that Moody’s expects to continue. Moody’s Investors Service has changed the rating outlook for the Government of Zambia to stable from negative and affirmed its B3 long-term issuer rating. The stable outlook reflects reduced government liquidity pressures and a slowdown in government debt accumulation which Moody’s expects to continue.

The agreement also allows for remittances to be sent to thirdparty bank accounts in Morocco.

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in the



Historic demographic changes require us—all of us—to focus on youth and assess the impact of these changes. This is a moment where young people can take their destinies into their own hands. —Christine Lagarde, Managing Director International Monetary Fund at the United Nations Economic Commission for Africa, Addis Ababa, Ethiopia For these stories and more, visit

BTI Bank launches in Morocco

Al Baraka Banking Group (ABG) and the Moroccan Bank for Foreign Commerce of Africa (BMCE Bank) announced the launch of the new participation bank, BTI Bank (Bank al Tamweel wa Inma), with opening its headquarters in Casablanca. Adnan Ahmed Yousif, Board Member and President and Chief Executive of Al Baraka Banking Group, stated, “We are delighted to launch our participation bank, BTI Bank in Morocco, which is the result of a strong partnership with BMCE Bank. We are confident of the large opportunities for the success of our bank, given the Morocco’s significant and promising development potential in the field of participation banks. Our studies have shown the promising opportunities in the area of investment and financing that await the services and products of BTI Bank. Today, we seek to put out our experience and expertise on the Moroccan market through BTI Bank, thus hoping to contribute to the growth and prosperity of this fraternal country.” Mohamed Maarouf, General Manager of BTI Bank, stated, “Al Baraka Banking Group and the BMCE Bank have sought to establish a new model for participation banking in the Moroccan market, which is undergoing a gradual restructuring, coinciding with the development of Shari’ah banking regulations and this will ensure its success. We aspire to quickly become a real and reliable banking partner for individuals, professionals and businesses, through a strong and equal relationship, a relationship that is based on strong values and ​​ mutual benefit to both parties. We also aspire to contribute to the creation of a financial system that rewards the effort and contributes to the development of society.”

From left to right: Brahim Benjalloun, Managing Director, BMCE Bank; Adnan Ahmed Yousif, President & Chief Executive, Al Baraka Banking Group; Mohamed Maarouf, Acting General Manager, BTI Bank.

African Reinsurance Corporation joins Africa Finance Corporation African Reinsurance Corporation (Africa Re) announced its membership of Africa Finance Corporation (AFC), and becomes the first multi-lateral financial institution to invest in AFC. Andrew Alli, President and CEO of AFC commented, “We welcome African Reinsurance Corporation (Africa Re) as a member and shareholder of AFC. As the first multilateral financial institution to become a member of AFC, this is a key milestone for us, as the Corporation seeks to further diversify its shareholding. We are, therefore, pleased to welcome Africa’s premier reinsurance corporation into membership of AFC and look forward to collaborating with Africa Re to provide innovative solutions to the development and financing of infrastructure assets in Africa.” Corneille Karekezi, Group Managing Director & Chief Executive Officer of Africa Re, commented, “As a Corporation with both private and public shareholders, we see many synergies with AFC in the pursuit of African continent development agenda as well as business growth. Indeed, we have long admired AFC, and the transformative impact it has made across many of the geographies in which we operate, whilst delivering competitive returns. We are therefore delighted to become a part of one of Africa’s best success stories.”

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in the


Dubai Investments finances $20 million in Africa Crest Education

Dubai Investments PJSC has announced $20 million direct investment into Africa Crest Education Holdings (ACE)—an investment company promoting education across the African continent. The investment will fund development of SABIS-operated schools in Africa, with an initial target pipeline of projects in Kenya, Egypt, South Africa, Uganda and Morocco. Dubai Investments The initial project in Kenya, The SABIS International School—Runda, subsidiary Al Mal Capital advised is currently under construction and now accepting applications for its DIC on its investment in ACE. Al opening in September 2018 (CREDIT: SENSAY/SHUTTERSTOCK). Mal Capital will also continue to manage the investment in ACE on DIC’s behalf. Investbridge Capital arranged and advised on behalf of Africa Crest Education. “Dubai Investments is pleased to partner with ACE and SABIS on this project. This is part of the Company’s continued efforts to boost its investments in the education sector and making a foray into the African continent. SABIS has a long-standing history of offering quality schooling and is a respected name in global education landscape and this partnership will go a long way in opening school doors to millions across Africa,” said Khalid Bin Kalban, Managing Director and CEO of Dubai Investments.


Japan provides $700 million to African Development Fund The Japan International Cooperation Agency (JICA) has signed a loan agreement with the African Development Fund (ADF) designed to provide an Official Development Assistance (ODA) loan to the tune of JPY 73.601 billion (approx. $700.9 million). Signing the Notes of Exchange, The President of the African Development Bank Group, Akinwumi Adesina said, “Thanks to Japan and its Government for keeping a promise. One often hears about many international pledges of development cooperation remaining unfilled. I would like to commend the full accomplishment of Japan’s commitments to Africa’s development. With its $700-million loan, which came on top of $328 million in the form of a grant, Japan has significantly contributed to the ADF commitment capacity for the period 2017-2019.” Adesina added that Japan is the second-largest contributor to the ADF in cumulative terms and its contributions have increased over time.


The Dubai Chamber of Commerce and Industry recently concluded a trade mission to Kenya. The mission provided an opportunity for UAE businessmen to explore new opportunities within the country’s transport, logistics, energy and construction sectors. “As an emerging logistics hub, Kenya is a market of strategic importance to Dubai and Dubai Chamber. Kenya’s Government has taken bold steps to expand the country’s infrastructure and attract foreign investment to the country, and these developments have created a plethora of business opportunities which companies in the UAE can benefit from,” said Omar Khan, Dubai Chamber’s Director of International Offices.

Moody’s: Swaziland’s credit profile reflects its low economic and institutional strength

Swaziland’s (B2 negative) credit profile reflects its low economic strength and institutional capacity, balanced by low debt and relatively strong debt affordability, Moody’s Investors Service said in an annual report. “Swaziland’s credit weaknesses include its relatively small economy and ongoing government liquidity pressures. The sovereign has been experiencing low real GDP growth levels in recent years in line with the regional slowdown in growth,” said Zuzana Brixiova, a Moody’s Vice President—Senior Analyst and the report’s author. While growth has partly recovered recently as the effects of a regional drought have started to subside and construction revived, the country’s growth prospects are subject to risks from the weakened economic picture in South Africa, its main export destination, migration destination and source of investment. Moody’s expects annual real GDP growth to rise to 2.5 per cent in 2018 and remain roughly at this level in the next two to three years.

Japan’s Ambassador to Côte d’Ivoire, Hiroshi Kawamura, said he was glad to sign the accord to bolster Africa’s socio-economic development.

AfDB enables public-private dialogue in Lesotho The African Development Bank (AfDB) and the Lesotho Chamber of Commerce and Industry (LCCI) signed a Fund for African Private Sector Assistance (FAPA) grant agreement of $915,000 to finance the Economic Diversification Support Technical Assistance Project. The agreement was signed by the Bank’s Deputy Director General for the Southern Africa Regional Development and Business Delivery Office (RDGS), Josephine Ngure, and the Lesotho Chamber of Commerce and Industry Chief Executive Officer, Fako Hakane.

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spotlight [NIGERIA]

Nigeria first nation to issue a Climate Bonds Certified Sovereign Green Bond

Nigeria is the first African nation to issue a sovereign green bond (CREDIT: KWEST/SHUTTERSTOCK).

Nigeria has become the first nation to issue a Climate Bonds Certified Sovereign Green Bond, the first African nation to issue a sovereign green bond and only the fourth nation in the world to issue after Poland, France, and COP 23 President, Fiji. The NGN 10.69 billion issuance has been described by the Ministry of the Environment as a ‘pilot sovereign’ of a foreshadowed NGN 150 billion green bond programme and will fund a range of renewable energy, afforestation and environmental projects. The 5-Year Bond settles on 22 December. Chapel Hill Denham is the financial adviser. The Honourable Minister for State for Environment, Ibrahim Usman Jibril, “Climate Change is real and business, government and the capital market need to work together to slow its effects. This pilot green bond, which we expect to be the first of many more, has developed the platform to address the nation’s target of reducing its emissions by 20 per cent unconditionally and 45 per cent conditionally by 2030.”

CBN looks to improve dollar liquidity

The Central Bank of Nigeria (CBN) has announced that it injected $210 million into the currency market as part of a bid to improve liquidity and alleviate the dollar shortages that the country has been experiencing in the past few years. In a statement the bank announced that it had released $100 million for the wholesale market and $55 million for small businesses and individuals. Meanwhile the remaining $55 million has been earmarked for customers that need foreign exchange for specific dollar expenses, such as tuition fees or medical bills. This move is not without precedent and comes on top of a $304.4 million intervention in the forex market by the bank. The CBN has gone on the record as stating that the bank would continue to sustain its interventions into the Nigeria has experienced severe dollar shortages in the past foreign exchange market in few years (CREDIT: RED CONFIDENTIAL/SHUTTERSTOCK). the future.

IMF Staff completes 2018 Article IV Mission to Nigeria

An International Monetary Fund (IMF) staff team led by Amine Mati visited Nigeria to conduct the 2018 Article IV consultation. Following the conclusion of the visit Mati Senior Resident Representative and Mission Chief for Nigeria at the IMF, said, “Overall growth is slowly picking up but recovery remains challenging. Economic activity expanded by 1.4 per cent year-on-year in the third quarter of 2017—the second consecutive quarter of positive growth after five quarters of recession—driven by recovering oil production and agriculture. “However, growth in the non-oil-nonagricultural sector (representing about 65 per cent of the economy), contracted in the first three quarters of 2017 relative to the same period last year. Difficulties in accessing financing and high inflation continued to weigh on companies’ performance and consumer demand. Headline inflation declined to 15.9 per cent by end-November, from 18.5 per cent at end-2016, but remains sticky despite tight liquidity conditions. “The authorities have begun addressing macroeconomic imbalances and structural impediments through the implementation of policies underpinning the Economic Recovery and Growth Plan (ERGP). Supported by recovering oil prices, the new investor and exporter foreign exchange window has increased investor confidence and provided impetus to portfolio inflows, which have helped to increase external buffers to a fouryear high and contributed to reducing the parallel market premium. Important actions under the Power Sector Recovery Program increased power supply generation and ensured government agencies pay their electricity bills. Welcome steps were also taken to improve the business environment and to address longstanding corruption issues, including through the adoption of the National Anti-Corruption Strategy in August 2017. “However, in the absence of new policies, the near-term outlook remains challenging. Growth is expected to continue to pick up in 2018 to 2.1 per cent, helped by the full year impact of greater availability of foreign exchange and higher oil production, but to stay relatively flat in the medium term. Risks to the outlook include lower oil prices, tighter external market conditions, heightened security issues, and delayed policy responses.

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SBM looks east and west

SBM has been making inroads on the African continent over the past year.

SBM Group has recently announced progress in its acquisition of banking assets in Kenya and has become the first foreign bank to be granted the Wholly Owned Subsidiary Licence by the Reserve Bank of India


BM Holdings (SBMH) announced recently that the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC) have agreed to the express terms of a binding offer from SBM Holdings whereby the group will, through its subsidiary, SBM Bank (Kenya), acquire the carved-out assets and liabilities of Chase Bank (Kenya) Limited (in receivership) and most of the operating assets of around 55 branches, employees and IT infrastructure. The move is in line with the recent expansions that SBM has been making into East Africa.

Kee Chong Li Kwong Wing, Chairman of SBM Holdings said, “In May 2017, we started our Africa foray through the acquisition of the Fidelity Commercial Bank. Our first step was to acquire a small Tier 3 bank and then build scale on it over time. Today, with the acquisition of the carved-out assets and liabilities of Chase Bank we have the opportunity to grow inorganically. This confirms our ability to pursue our regional expansion strategy. With this transaction SBM Bank (Kenya) Limited’s ambition is now to become a Tier 1 bank in Kenya. Moreover, the SBM Group’s

determination of increasing its footprint in East Africa grows stronger.” Chase Bank is a commercial bank headquartered in Kenya’s capital, Nairobi. The Bank reported total assets of over $1 billion and staff of around 800 in 2014. “SBM Group vision goes well beyond what we have achieved up to now,” added Li. “With presence in Africa as well as in Asia through India, SBM is looking forward to grow as an important financial institution and act as a bridge in the Asia-Africa corridor by facilitating investments from Asia toward Africa.” Meanwhile, SBM Group has also become the first foreign bank to be granted the Wholly Owned Subsidiary (WOS) Licence by the Reserve Bank of India (RBI). The licence authorises SBM Bank (India) to pursue its operations within India as a WOS of SBM Group and to amalgamate its branches of SBM Bank (Mauritius) into a fully-fledged subsidiary. SBM announced that the objective behind this move is to enhance the bank’s capabilities of supporting capital flows along the India-Africa corridor. “The WOS licence is a step further in our endeavour to emerge as a bridge between the Asian and African continents. Our India strategy goes well beyond this licence,” said Li. “Our objective is to build robust presence in the Indian banking and financial sector that would put us in a better position to attract potential investors into Africa, where there is a significant financing gap. SBM will also have a larger bandwidth to expand its Mauritius based non-banking financial cluster offering with products and services capabilities around stockbroking, wealth management and investment banking among others. Through this WOS licence, SBM has proved that it possesses the right competences, abilities and infrastructure to grow as a significant financial centre in the region.”

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Ellen Johnson Sirleaf wins 2017 Ibrahim Prize The award was presented after a two-year hiatus


llen Johnson Sirleaf left office as President of Liberia in late January of 2018 after overseeing the country’s first democratic transfer of power since 1944. The continent’s first female elected president, she came to power in 2006— two years after the end of a 14-year civil war. During her tenure Sirleaf also tackled the spread of Ebola in Liberia and improved the country’s economic performance and level of governance. The award is named after the Sudanese-British billionaire Mohammed Ibrahim and carries an award of $5 million paid out over 10 years, followed by an additional $200,000 each year for the rest of the winner’s life. The award selects from African heads of state or government that have left office during the last three calendar years, having been democratically elected and served their constitutionally mandated term. The award has been notoriously difficult to win. This announcement brings the total number of winners to five since its inception in 2007— with six occasions where no leader was considered worthy of winning. Previous winners are Hifikepunye Pohamba of Namibia (2014), Pedro Pires of Cabo Verde (2011), Festus Mogae of Botswana (2008) and Joaquim

Ellen Johnson Sirleaf oversaw Liberia’s first democratic transfer of power since 1944 (CREDIT: A KATZ/ SHUTTERSTOCK).

Chissano of Mozambique (2007). Nelson Mandela was made the inaugural Honorary Laureate in 2007. The Prize Committee praises Sirleaf’s ‘exceptional and transformative leadership, in the face of unprecedented and renewed challenges, to lead Liberia’s recovery following many years of devastating civil war,’ and noted that Liberia is the only country out of 54 to have improved in every category and sub-category of the Ibrahim Index of African Governance since 2006. Dr Salim Ahmed Salim, Chair of the Prize Committee said, “Ellen Johnson Sirleaf took the helm of Liberia when it was completely destroyed by civil war and led a process of reconciliation that focused on building a nation and its democratic institutions. Throughout her two terms in office, she worked tirelessly on behalf

of the people of Liberia. Such a journey cannot be without some shortcomings and, today, Liberia continues to face many challenges. Nevertheless, during her twelve years in office, Ellen Johnson Sirleaf laid the foundations on which Liberia can now build.” Upon hearing the decision of the Prize committee Mohammed Ibrahim said, “I’m delighted that the Prize Committee has decided to make Ellen Johnson Sirleaf an Ibrahim Prize Laureate. In very difficult circumstances, she helped guide her nation towards a peaceful and democratic future, paving the way for her successor to follow. I am proud to see the first woman Ibrahim Laureate, and I hope Ellen Johnson Sirleaf will continue to inspire women in Africa and beyond.”

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Can Kenya and Ethiopia help build a closer East African neighbourhood? Kenya and Ethiopia have been at the forefront of East Africa’s economic progress in recent years, but Christian Toben, Regional Head, Africa at Commerzbank, stresses still more must be done to build regional integration


Christian Toben

ontroversy over Kenya’s general elections has made the headlines in recent months. But look behind the headlines, and the economic picture remains one of resilience. While growth is set to slip slightly to 5.3 per cent in 2017, it is expected to rebound from next year onwards at an annual average of six per cent. Over the past decade, in fact, the country has been among the standout economic performers on the African stage. Now recognised by the World Bank as a ‘middle-income country’, Kenya has recorded an average of almost six per cent GDP growth per year since 2010. Kenya is by no means the only wellperforming East African economy (see Chart 1). In the same period, northern neighbour Ethiopia’s average annual growth has been pushing the 10 per cent mark, making this economy one of

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the fastest-expanding in the world—let alone in Africa. Building on such robust progress over the past few years, the East African region as a whole could well post a growth rate of 5.4 per cent of GDP in 2017—distinguishing itself from the other three regions of Sub Saharan Africa. While some countries in other African regions, like Ivory Coast and Ghana, do also show sustainable growth rates, struggling economies elsewhere in Sub Saharan Africa have effectively constrained average growth to a modest 2.6 per cent (see Chart 2). So just why have Kenya, Ethiopia and East Africa bucked broader trends? BUTTRESSING GROWTH A major reason is the diversification of their economies, which has provided some much-needed resilience to volatile commodity revenues. Thanks to a relatively broad export profile and mixed composition of economic sectors—from higher-value manufacturing industries, to services such as telecommunications, finance and tourism—Ethiopia and Kenya have had to rely less on volatile raw material export revenues. The Ethiopian services sector, for example, accounts for nearly 47 per cent of national output; Kenya’s own services sector underpins very nearly half. Another explanation is the healthy investment in infrastructure, which has spurred domestic demand. In Kenya, huge electricity generation, road and port expansion projects have served to boost the economy. Under its Growth and Transformation Plans, Ethiopia has benefitted from massive public sector-led investment in power generation and distribution, rail networks, airports and industrial parks. In 2016, total investment relative to GDP was at a remarkable rate of 35 per cent of GDP.

THE NEED TO GROW CLOSER But there remains more to be done: both countries need to help East Africa integrate more as a region. Southern Africa is already relatively advanced in this respect, utilising common tax rates, for instance, and with local currencies pegged to the South African rand. If the countries of East Africa can follow in these footsteps and improve regionalisation— whether that is by further developing transport, energy, communications or regulatory infrastructure—they could better attract international investment to boost trade flows and support new business. They are certainly well poised to do so. Ethiopia is now East Africa’s prime recipient of FDI (see Chart 3), having opened up sectors such as textiles, pharmaceuticals and medical equipment to foreign investors— attracted by tax incentives in newly established special industrial parks and labour costs that are increasingly more competitive with Asian countries. Kenya’s diversified economy offers foreign investors both the region’s longest-established middle class consumer base and a well-developed financial sector. As such, interest from Asian trading companies is on the rise. East Africa already maintains close business links with India, and could also take advantage of its prime location in China’s “One Belt, One Road” programme as it increases its local presence. Importantly, European FDI flows to both countries are also increasing. Facilitating trade on the ground from our representative office in Addis Ababa (one of Commerzbank’s six bases in Africa), we have seen that these flows are crucial to building on already-strong European commercial links—particularly with Germany, Italy, the Netherlands and the UK.


As East Africa’s financial and transport hub, Kenya especially would do well to pursue regional integration. The continued growth of its middle class depends on reducing the high unemployment rate: the World Bank has estimated youth unemployment alone at over 22 per cent. Greater trade flows with established regional partners such as Uganda, Tanzania and South Africa, and investment from abroad in the services and industrial sectors – facilitated by further improved infrastructure—would therefore support badly needed new jobs and reduce dependence on the agriculture sector. Ethiopia, too, increasingly needs greater ties with its neighbours: the landlocked country depends on roads to Djibouti’s Red Sea port facilities for more than 90 per cent of its exports and imports to and from other parts of Africa, Asia and Europe. (Djibouti’s economy, for its part, remains heavily dependent on Ethiopia’s own trade flows.) Despite having posted considerable economic growth, Africa’s second-most populous country does remain one of the world’s poorest—so would do well to pursue regionalisation as a way of boosting its trade-led growth. POSITIVE REGIONALISING SIGNS Encouraging developments are underway. January 2017 saw the milestone completion of a new fasttrack 752km-long railway line linking Addis Ababa with Djibouti’s container port. Ethiopia and Djibouti have also now agreed to streamline customs procedures, align tariffs and use n ew technologies to enhance crossborder payments. Kenya, too, seems to be taking advantage of its regional position as a ‘transit country’ in order to enable the flow of goods from its landlocked neighbours. Under its Vision 2030 strategy,

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originally launched in 2008, it has pledged to complete 7,000 km of new roads, which are now in development. July 2017 saw the start of a major new 472km high-speed railway from Nairobi to Mombasa. The landmark project—Kenya’s largest since independence—is intended to be a regional artery, connecting landlocked South Sudan, the Democratic Republic of the Congo, Rwanda, Burundi and Ethiopia to the Indian Ocean. A 120km extension is planned to connect the horticultural hub of Naivasha, and, in a later phase, another will link to the capitals of Uganda, Rwanda and Burundi. Yet another project, known as the Lamu Port-South Sudan-EthiopiaTransport (LAPSSET) corridor, has been envisaged to connect South Sudan and Ethiopia with the port of Lamu. This small town on the Kenyan coast is set to be developed into East Africa’s largest seaport. Meanwhile, progress within the East African Community (EAC)— Kenya’s trade bloc with Burundi, Rwanda, South Sudan, Tanzania and Uganda—remains promising. Covering a total market of 178 million people, the EAC has seen trade increased by 35 per cent, from $1.5 billion to $2 billion, since the launch of a common market in 2010. Not only are costly and time-consuming crossborder formalities being removed, but more trade is being cleared electronically. Now the mid-term goals are a multi-currency payment settlement system and a common convertible currency. East Africa—driven substantially, though not only, by Ethiopia and Kenya—has been the regional economic powerhouse of sub-Saharan Africa. But these countries cannot rest on their laurels. As elsewhere in the continent, embracing regionalisation will be a major priority.












2017 (f)


f = forecast Source: IMF, Commerzbank










Western Africa Southern Africa Sub-Saharan Africa on average

2017 (f)

Central Africa Eastern Africa

f = forecast Source: IMF, Commerzbank









2017 (f)

Source: UNCTAD, Commerzbank

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How financial inclusion can beat poverty There are three key strategies to enabling financial inclusion, says Jacqueline Musiitwa is the Executive Director of Financial Sector Deepening Uganda


riving on the road from the area around Kyaka II refugee camp in Kyegegwa District in Western Uganda to Kampala, I was struck by how small towns in Uganda have similar traits. The red dirt used to make bricks, sometimes combined with cement blocks, are used to create fairly similarly sized compact reddish looking structures that line much of Uganda’s rural roadways. Often the walls are painted with advertising from paint companies, mobile networks, beverages and other corporates eager to entice a growing spending class. This makes for an interesting contrast with the intense greenery surrounding such structures. Another similarity among the small towns is the lack of services the residents have, including access to formal Jacqueline Musiitwa financial services.

Changing this is important since financial inclusion can reduce poverty and improve economic growth. How can financial inclusion be achieved? Through these three strategies: adopt a national financial inclusion strategy, improve technology and encourage behaviour change.

NATIONAL FINANCIAL INCLUSION STRATEGY (2017-2022) About 19.7 per cent of Ugandans live in poverty, even after a concerted government effort to reduce it. According to the World Bank, Uganda ranked as one of the fastest countries in Africa to reduce the share of its population living on $1.90 PPP per day or less, from 53.2 per cent in 2006 to 34.6 per cent in 2013. As such, the government has devised several action plans to ensure that poverty is reduced. For instance, the government is

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committed to achieving the Sustainable Development Goals, Vision 2040, EAC Vision 2050, the Africa Vision 2063. Specifically, with respect to financial inclusion, Uganda is now committed to the National Financial Inclusion Strategy (NFIS) 2017-2022. Enactment of a NFIS is a promising trend across many developing countries. The main goal of the NFIS is universal financial inclusion to a broad range of quality and affordable services. The NFIS prioritises the following: 1. Reduce financial exclusion and barriers to access financial services; 2. Develop the credit infrastructure; 3. Build the digital infrastructure; 4. Deepen and broaden formal savings, investment and insurance usage; and 5. Protect and empower individuals with enhanced financial capability. Financial inclusion is a critical component of development for several reasons. First and foremost, it reduces a person’s vulnerability to economic shocks. Secondly, increasing domestic savings rates is good for domestic financial markets. Thirdly, a robust financial services sector improves the economy writ large. In 2017, Financial Inclusion Insights found that 46 per cent of Ugandan adults are registered users of a formal financial institution, but only 38 per cent are active users. In the same year, the Uganda Bureau of Statistics notes that 33 per cent of Ugandans still prefer to hide their money in their homes or other secret places. Of the 33 per cent, 36 per cent are in rural areas and 26 per cent in urban areas. Perhaps it is in part because 78.5 per cent of rural Ugandans are required to travel more than five kilometres to access a bank branch. Whilst 81 per cent of Ugandans have access to mobile phones and

61 per cent of those access mobile money, connectivity to mobile networks is weak to non-existent in remote areas. Due to most rural population’s income generation based on subsistence agriculture, their earnings are infrequent and fluctuate, making it hard to move from living hand to mouth to purchasing financial services. This seeming contradiction lies in the reality that although formal financial services provide an option for people, many people, especially in rural areas, still prefer age old ways. It begs the question of what do financial institutions need to do to increase their reach and usage?

TECHNOLOGY With respect to the race to stay abreast of technological developments, the financial services sector is no exception. The sector continues to grow its reliance on technology and innovative technological solutions to industrywide problems. From improved core banking systems to online banking to alternative credit scoring, the sector is quickly finding ways to improve the user experience and increase usage. Beyond technological adaptations is the growth of digital financial services. Digital financial services are not only speeding up the pace at which poor people access financial services, but it also improves the ease with which people can transact. The 2016 Financial Inclusion Insights show that there are more active users of digital financial services than the traditional forms of financial services. The data showed that 62 per cent of Ugandans have access to a digital account versus 46 per cent. The year before, the Uganda Communications Commission found that about 70 per cent of people in rural areas use mobile money to receive money, presumably from family in urban areas. Otherwise, people are

now able to pay school fees, use pay as you go systems for power, water and other conveniences, and buy financial services. The opportunities will only increase with new innovations. What does that mean for the financially excluded? All the correct measures are in place so there is hope. Agency banking is now a reality in Uganda and so the distance people travel to financial services providers is being reduced. The decreasing price of mobile phones, improved product development and affordable services will encourage more people to access and use financial services. In 2015, 72 per cent of people asked by the Uganda Communications Commission about why they do not have a phone responded that it is because they do not have access to electricity at home to recharge a phone. With increased access to pay as you go solar electricity, which enables phone recharging, phone ownership will grow. Besides increasing access to electricity, there are efforts as the ‘internet 4 all’ initiative by the World Economic Forum that are aiming to ensure universal access to the internet, which are helping rural populations increase their access to the internet as well. Both electricity and the internet will increase access to formal financial services.

BEHAVIOUR CHANGE Although the correct measures are in place, the critical element for financial inclusion are the people. People need to understand how financial inclusion can improve their lives. Behavioural change is critical to people’s adoption of formal financial services. This means that product developers must understand their target market and conduct continuous financial and technology literacy. For rural populations, trainings can be linked to agriculture training as well. Besides tools such as

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Technology can play a crucial role in speeding up access to financial services (CREDIT: FSD UGANDA).

financial diaries and other surveys, human centred design and financial and technology literacy are important. It is important to increase people’s confidence in their own ability to use financial services, especially digital financial services. Additionally, service providers need to improve customer confidence by abiding by consumer protection laws and protecting customer privacy and data. Using financial inclusion as a means to financial health is a continuum.

The graduation, for instance, from not saving to saving in the home, to joining a village and loans association, to using mobile money and financially to creating a bank account allows the customer to also graduate their dreams. As a person accesses better financial services, their opportunities to reduce vulnerability also decrease. Once people are able to see the benefits, their trust in the system will also increase.

Financial inclusion is a means by which poor people can reduce their vulnerability. Uganda has taken the right steps to ensure universal access in the coming years. It is now up to a coordinated cross sector effort to ensure the goals in the NFIS are met. If not, Uganda’s population of 77 per cent under the age of 30 is at risk of spending the decades to come continuously graduating and sliding into poverty.

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US economy takes limelight Tightening monetary policy may slow down financial market growth, says Vijay Valecha, Chief Market Analyst at Century Financial Brokers


ne month into 2018, and investors have already started fearing the rollercoaster ride in global markets. They say morning shows the day, and with January starting off at a spectacular note, hopes shot high and investors expected the bull to continue its run. But little did anyone anticipate that a sort of ‘Black Monday’ was around the corner. fifth February witnessed the greatest slide in the history of Dow. Dow Jones Industrial Average, a forerunner amongst all US indices, lost a whopping 1700 points in 24 hours. The frantic February saw the US stock lose $1 trillion in the first week itself. Even though this correction was long overdue, it caught investors unaware as they were busy basking profits in the shiny Bull Run. The recent correction in equities has thrown markets off guard despite a sound global economy and everyone is contemplating what’s next. Before we divulge into that, let’s sum up what has brought markets to where it stands today. After a strong start to 2018, major indexes pulled back this week as strong wage figures in the monthly US jobs report added to concerns about

Vijay Valecha

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a pickup in inflation and subsequent tightening of monetary policy. January 2018 has been terrific in terms of employment in the US, which saw 200,000 jobs being added in the economy and a growth of 2.9 per cent in wages. The unemployment rate now stands at the levels of 4.1 per cent against 10 per cent in 2009. Post 2008 recession, this has been the most meaningful progress in the economy. In a tight job market, there were more jobs available than there were workers to fill them. This forced employers to offer higher pay to attract and keep workers. The uptick in the wages has been a clear indicator of improving economic status which, in turn, has pumped up inflation expectations. This was reflected in a massive surge in the US Treasury Bond yields. For the first time since 2014, the benchmark 10-year bond yields rose above the 2.7 per cent mark. Markets have now become very certain of not only the impending rate hikes but also expect the Fed to raise rates at a faster pace. The rising interest rates along higher yields lead to higher borrowing costs for the corporates, and thus, lower the relative attractiveness for stocks. While the limelight was focused on the robust US economy, growth in the European Union reached 2.5 per cent in 2017, the best since 2007, which saw a growth of 3.4 per cent. The European economy is at the cusp of a broad cyclical expansion, after years of economic stagnation and rolling crises, boosted by regaining confidence and monetary stimulus from the Draghi-led European Central Bank. The German bund mirrored this optimism as the five-year bund yield breached 0.01 per cent breaking above the zero per cent levels, for the first time since 2015. The 10-year German bund yield climbed close to 0.7 per cent. The Asian markets displayed the same sentiment.

China has held on to the baton of leadership in many segments of the economy. Now, the word on the street is that China is passing along its inflation to the rest of the world. Its Producer Price Index (PPI), which is a measure of inflation, turned positive for the first time in five years. The PPI rose to 6.3 per cent for the full year of 2017, the highest in nine years. The GDP also grew for the first time since 2010 to 6.9 per cent. The attractive economic data buoyed on Chinese government’s campaign to reduce excess capacity in industries such as coal, steel and aluminium and improve international trade. The Chinese bond yields have been growing since late last year and can be regarded as the leading indicator of growth globally. The Chinese 10-year RMB bonds trade at 3.9 per cent, which remain unperturbed amidst havocs elsewhere. Another major factor that can be considered for the sudden US debts sell-off was the surge in oil prices, which rose to three-year highs in January. This oil price surge led markets to markets expecting higher headline inflation. Rising inflation and a crash in the bond market can be considered as the greatest tail risk for markets in general. Tighter monetary policies can crimp economic growth in the long term. This has underpinned much of the climb in stock prices over the past year. Despite the recent dip across Wall Street, the Dow Jones Industrial Average rose three per cent in 2018 already. Strong corporate earnings and improving investors’ sentiments lend a bright picture for the stock market. With both the US and Euro zone growing in tandem and with Asian economies on a roll, 2018 is expected to deliver continued growth and economic stability for the first time in a decade.


FOREX MARKET With Trump tax plan and US Fed’s intention to raise interest rates at least three times, the dollar could be a favourite in the trading community. Also, one should not forget that Fed is reducing the balance sheet size by $30 billion a month. This is going to be the first time in many years that Fed policies are going to contribute to rising bond yields. Counter intuitively, this could be termed as ‘Quantitative Tightening’. Well, if purchasing bonds is ‘Quantitative Easing’, reducing purchases is certainly the opposite. To put things into perspective, it seems that US dollar has some strong tailwinds behind its back in 2018.

OIL: BRIGHT OUTLOOK Major forecasts indicate that the positive sentiments in global economy will spill over to energy markets also. Oil demand could grow faster as the global economic growth is broad based and surprises to the upside. This could push the oil markets to deficit as demand for OPEC crude is expected to rise to 33.42 million barrels per day while OPEC compliance of more than 100 per cent means OPEC production growth will be stagnant. Rising US oil production might not be sufficient to tip the balance. OECD oil inventories fell 4.6 per cent between January 2017 and December 2017 due to rise in global oil demand and strict OPEC compliance with production cuts. OECD oil inventories which touched a record high of 3093 million barrels in July 2016 has since then fell by six per cent. US Energy Information Administration (EIA) forecasts suggest that oil inventories could further decline 1.4 per cent and average 2952 million barrels in 2018. Overall it, looks like this could be a good year for crude oil.

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Africa: the year for investment Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global Group

Banker Africa sat down with Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global Group, to discuss the growing Gulf-African trade corridor and what the economic landscape for investments looks like in 2018


hich industries have you focused on at Quantum Global for private equity investment?

With a net equity of $3 billion, Quantum Global Group has established seven dedicated private equity funds that

target high growth industries in the areas of agriculture, healthcare, hospitality, infrastructure, mining, structured equity and timber. Let me elaborate. Agriculture—this sector continues to be a key driver of economic transformation across Africa. In

the midst of fluctuating commodity prices, several African economies are encouraging investments in agriculture to diversify and stabilise their economies. Further, sustained growth in global demand for food, biofuel, forest, and horticultural products continues to lead more international

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investors to invest in agricultural land in developing countries. These trends are likely to continue to result in some upward pressure on agricultural assets, especially in countries with acceptable land ownership and tenure frameworks and developed supply chains. Our Group has allocated $250 million to the sector. Healthcare—the role of private investment towards improving healthcare delivery in Angola and across Sub Saharan Africa will become increasingly important over the longterm. A combination of economic growth, a growing urban middle class and an under-developed healthcare sector will boost the demand for healthcare services, creating revenue earning opportunities for companies that provide primary and secondary care healthcare services. As part of our focus on the healthcare sector, we will aim to invest USD $400 million of unleveraged equity, or when fully leveraged up to four times this ticket across Africa. Hospitality—the growth in Sub Saharan Africa is currently attracting investment and talent from more mature economies. Hotel facilities are a low-risk investment compared to other real estate assets due to the dynamics of supply and demand for their services, and the pressing capital investment needs of our continent. In addition to generating financial returns, the hotel sector creates immediate employment opportunities in construction and maintenance and hotel management, which contributes to the development of the domestic supply chain and drives demand for new goods and services. The Group established a dedicated $500 million hotel fund which aims to fulfil the significant undersupply of international standard hotel management capacity in the continent. As part of this vehicle, the Group

acquired a 100 per cent interest in the InterContinental Hotel Lusaka in 2016. We also acquired a 100 per cent ownership of the Movenpick Ambassador Hotel in Accra which was the biggest open-market hotel transaction in Sub Saharan Africa to date. Infrastructure—to date, infrastructure has been and continues to be one of the most attractive segments. Right


shipment port based on storage capacity, a tax-free trading zone that is also being developed, the ability to accommodate deep draught ships as well as smaller general cargo vessels and efficient traffic capacity. Mining—there is high growth potential for the mining sector in the years to come. However, there is a lack of funds to unlock the sector’s potential.

Infrastructure has been and continues to be one of the most attractive segments. Right across Africa, roads, airports, dams, ports, railways and telecommunications networks have been coming to life and adding significant logistical capabilities to African economies. – Jean-Claude Bastos De Morais

across Africa, roads, airports, dams, ports, railways and telecommunications networks have been coming to life and adding significant logistical capabilities to African economies. With a dedicated $1.1 billion infrastructure fund, the Group is a long-term direct equity investor in greenfield and brownfield infrastructure and industrial base assets across Sub Saharan Africa. Our key investments in the sector include a multipurpose deep-water port situated in Cabinda, a northern province of Angola, named Porto de Caio (PoC). We have invested $180 million in the management company and the concession holder to make PoC a competitive alternative to the regional shipping constraints that currently exist. PoC aims to be a preferred

The Group will invest $250 million of unleveraged equity, or when fully leveraged up to four times this ticket, in mining over the next three to five years in Angola and across the continent. It is also important to understand that mining can be a transformational industry and play a part in bringing down indirectly the cost of electricity, benefitting Africans and the cost of mining itself. This and other developments in logistics are crucial in increasing project viability. Structured Equity—the relative scarcity of traditional financing in Africa requires increased equity and equity-like capital, particularly for small to medium sized enterprises. We conduct investments in structured equity that seek to bridge this financing

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gap. With a dedicated $250 million private equity fund, we target a broad range of sectors along with providing expertise through knowledge-sharing and best practises to companies in our portfolio to support their development. Timber—this sector represents one of the greatest African resources, offering huge development potential. African governments recognise the importance of a developed timber sector. We are aiming to invest $250 million in timber investments over the next three to five years, with an investment horizon of more than 10 years. The Group has established a partnership with the Angolan Government to develop 80,000 hectares of large-scale wood fibre plantations in the Planalto region of Angola. As part of this concessional agreement, Quantum Global aims to invest approximately $50 million to the new plantation establishment, infrastructure and wood processing industries over the next five years We believe timber investment is core to promoting rural economic development, employment and socioeconomic development. Furthermore, investments in the sector will bring much needed long-term stability and jobs into underserved rural communities. Consequently, investing in this sector contributes to some of the most important economic and social goals across the region. This will also significantly contribute towards maintaining adequate forest levels and prevent illegal logging which is a serious problem in Africa.

emphasis on diversifying away from hydrocarbons and natural resources. Improvements in commodity prices and Africa’s expected economic recovery will drive further investments into the continent, particularly in the Western African region. Nigeria and Angola will benefit from The Organisation for Economic Co-operation and Development (OECD’s) forecasts of around $58$60 per barrel in 2018, easing public

expenditure pressures. Private Equity investors and other State players such as China will also benefit from a potential uptick in public sector spending on important infrastructure works and we may see greater appetite for PPP’s and general private capital in government-led projects. There is also significant deal appetite and interest in quality assets in countries such as Zimbabwe and South Africa.

Where are we likely to see an expansion of private equity investment? Despite the current global volatility, Africa remains one of the most exciting markets to invest in due to its growth potential and young population. We have also seen African Governments putting a special

Jean-Claude Bastos De Morais

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What impact has working in a wide variety of different business cultures across the continent had on your investment strategy? Working across the continent, with different business realities, varied social economic life cycles, multiple languages and vastly different cultures has enabled us to get to grips with what stakeholders on the ground need. Investing in Africa is significantly more complex because of the challenges brought about by political pressures, differing levels of infrastructure quality and legal investment frameworks, and young capital markets. Socio-economic issues are also ever-present and the work that we do makes an immediate impact. These are important considerations, which have led us to build a strategy that supports socioeconomic growth through sustainable investments over the long-term. Our strategy also involves building strong local connections with a wide range of stakeholders, including local and national governments so that the work we do meets different regulatory requirements across borders.

What is your outlook on GulfAfrican trade for 2018? With rapid urbanisation and a population boom, Africa is a fertile ground for Gulf economic growth and many Gulf investors are actively investing in the continent. According to the Dubai Chamber of Commerce, total nonoil trade between the two regions is currently valued at around $24 billion—a 700 per cent increase over the last decade. Examples include an investment from the Investment Corporation of Dubai, which has placed $300 million


the developed markets and the impact of the fall in crude oil prices have all turned investors towards opportunities in emerging markets. Africa represents a growing number of opportunities in key developmental sectors for Gulf businesses—and it is geographically close. Gulf investors should also be looking at opportunities in the region’s biggest single employer—agriculture—which can be greatly enhanced through investment and the implementation of modern farming techniques.

Banks are reluctant to offer capital to young businesses which is hampering the growth of the SME sector across the continent but Africa remains a resilient region that continues to attract investors towards it. – Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global Group

How have you mitigated the risk of doing business in Africa? By focusing on long-term projects that are part and parcel of overall socio-economic development, across seven high-growth sectors, we have invested in areas that are inherently more sustainable. Simply put, they deliver, jobs growth and businesscritical infrastructure that benefit all of society and receive strong support from local communities, business leaders and government. Some sectors, such as agriculture and timber are also designed to bolster domestic production and reduce reliance on imports, which in the long term will help them to weather global economic shocks.

in Dangote Cement of Nigeria, one of Africa’s fastest growing companies; and Etihad Airways’ acquisition of a 40 per cent stake in Air Seychelles. With the growing political relations between the Gulf and Africa, we are likely to witness significant economic cooperation based on mutual benefit and common goals with investments in key areas such as agriculture and infrastructure.

Why should Gulf investors explore the opportunities available on the African continent? The slowdown in global economic activity, a sluggish recovery in

Successful agribusiness investments stimulate agricultural growth through the provision of new markets and the development of a vibrant input supply sector. It is a high-growth industry that should be attractive to Gulf investors.

How competitive is the GulfAfrican private equity space? Private capital is more important in Africa than it was 10 or even five years ago. The realignment of national budgets in response to oil and commodity price shocks is propelling further economic diversification in many African countries. We are witnessing an increased effort by

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Jean-Claude Bastos De Morais

many regional Governments to attract more FDI and thus they are offering significant opportunities for foreign investments which is opening new opportunities for private equity investors from around the world.

the private equity funds. We will support new projects in the targeted high growth industry sectors taking advantage of the emerging economic trends and attractive regional demographics.

Have you got any new projects launching in 2018?

What needs to be done to foster innovative solutions and start-ups in Africa?

We expect 2018 to be an extremely busy year in terms of investments across all

The lack of availability of capital for small-and medium-sized businesses

is a challenge in Africa. Banks are reluctant to offer capital to young businesses which is hampering the growth of the SME sector across the continent but Africa remains a resilient region that continues to attract investors towards it. I believe we all have a role to play in terms of raising the profile of African innovation, spreading the African innovation spirit, in galvanising

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support for African innovators and creating opportunities for them to attract the right investments at a Pan-African and international level. Doing so will kick-start a chain reaction that will ultimately drive economic diversification, job creation and prosperity for Africans. This is why I set up the African Innovation Foundation, which rewards innovators with $185,000 every year to foster the African innovation spirit and the Fabrica de Sabao, a warehouse in a Luanda slum which is today a thriving community centre. Africa has the fastest growing youth population in the world. Sixty per cent of its population is under the age of 24. This youth bulge creates an important opportunity for sustainable development in Africa. These youth segments will have specific needs different from developed or first world nations. Therefore, there is an urgent need to invest in local innovation ecosystems which respond to these real needs.

of a region that is determined to build robust, diverse national economies.

What are your general thoughts on the trends we will likely see for Africa’s economy in 2018?

A) Economic recovery In West Africa Improvements in commodity prices and the region’s expected economic recovery will drive further investments into the Western African region. Nigeria and Angola will benefit from the OECD’s forecasts of around $58-$60 PB in 2018, easing public expenditure pressures. PE investors and other State players such as China will also benefit from a potential uptick in public sector spending on important infrastructure works and we may see greater appetite for PPP’s and general private capital in government-led projects. According to the Quantum Global Research Lab, GDP figures have recovered across most of west Africa in 2017 and are in some cases forecast to surge in 2018. The IMF’s most recent World Economic Outlook (released in Q3 of 2017) has projected growth of almost nine per cent for Ghana in 2018 with an overall rise of around 3.4 per cent for SSA.

Seeking investment opportunities in a stable political system with a stable economy is always a priority but perhaps more so in 2018 after a year of political surprises around the world— including the unexpected change of leadership in Zimbabwe. Political changes in Africa as seen over the past year have, however been moderate in comparison to those that have taken place in the USA and EU. Countries such as Angola have enjoyed a smooth, peaceful change of power in a fully democratic election—the first Party Political change since peacetime in 2002. Likewise, neighbouring countries are noteworthy for their commitment to political stability, economic growth and economic reform—this is indicative

B) Improved global liquidity conditions With projected higher oil production, OECD forecasts of a steady rise to near $60 PB throughout 2018 and improved foreign exchange liquidity rates globally, private equity in Africa will offer much higher rate of returns compared to cash and fixed income assets. Around the world, borrowing rates and inflation remained stable throughout 2017, which has also been the case in many parts of Africa—even in countries that have struggled with low FX reserves and the slump in oil prices. Some of the region’s biggest economies such as


Angola and Nigeria have reigned in spending and demonstrated fiscal restraint, including currency controls. These measures have contributed to greater liquidity. C) Nigeria to attract more investments With Nigeria’s economy projected to grow to over $650 billion by 2022, medium to long term prospects look optimistic, with solid fundamentals underpinning growth expectations particularly in the non-oil sectors of the economy. However, the country is facing an infrastructure investment gap between now and 2040 in the region of $878 billion. This figure (which pertains only to infrastructure) is based on forecasts of an annual GDP rise of 4.1 per cent and a population that is rising by 2.4 per cent per year at current trends.

What is your personal management style? Coming from an entrepreneurial background and growing up in a multicultural environment, my mind and intuition had to be constantly adaptable and flexible. Having financed my studies myself and becoming an independent financial advisor whilst studying at University, I have built a set of principles over the years: Be confident and believe in what you do, listen to your intuition and rationalise the ways to implement Be creative and adapt a solutionoriented approach by trying different routes Face challenges and never give up; set back with a positive attitude and learn from it Have fun in what you do Be expressive; show your feelings when you are happy or frustrated and be genuine Involve others by sharing.

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Standing on the precipice


South Africa is in need of reform to put its economy on the right track

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We consequently agreed that bold and timely reforms are needed to create an environment conducive to job creation and less inequality. —Christine Lagarde, Managing Director, IMF

Cyril Ramaphosa has taken the reigns as the President of South Africa (CREDIT: GOVERNMENTZA/FLICKR).


e turn to South Africa for our Country Focus this month. This comes as a perhaps timely update following the resignation of Jacob Zuma and the swearing in of Deputy President Cyril Ramaphosa as President. Zuma’s reign as leader of South Africa has been marred by corruption scandals and a flagging economy, with the country’s downgrade to junk status late last year by ratings agencies still fresh. The resignation itself was covered in more detail in our News Analysis section on page 6 this month, here we will focus more on the economic situation that South Africa finds itself in, and what the country’s new leadership will need to do to secure long-term economic prosperity. Economic growth stagnated in 2017, with IMF (International Monetary Fund) estimates placing overall GDP growth at 0.7 per cent. Early estimates suggested that growth in 2018 would

not improve significantly. “IMF staff anticipates that the subdued economic growth of 0.7 percent, projected by the authorities for 2017, is not likely to improve much in 2018,” said Ana Lucía Coronel, the leader of an IMF mission in late 2017. “Growth would recover only gradually in the medium term, unless the pace of implementation of structural reforms accelerates quickly enough to prompt a clear recovery in business and consumer confidence.” However, more recent analysis throughout early 2018 suggests an improvement in GDP growth figures. The victory of Cyril Ramaphosa as party president in the ANC National Congress in December 2017 caused a revision of figures upwards, with the South African Reserve Bank (SARB) forecasting the economy growing 1.4 per cent in 2018 (up from 1.2 per cent). It is important to note the overall encouraging financial market reaction to Ramaphosa taking the reigns as the interim President of South

Africa, and likely favourite for in the 2019 general election. “The market reaction to Zuma stepping down from position as President of South Africa has been a positive one. There have been months of ongoing speculation over his future, and confirmation of Jacob Zuma resigning has basically provided a climax to persistent political uncertainty,” said Jameel Ahmad, Global Head of Currency Strategy and Market Research at FXTM. “The rand has strengthened to its highest level since March 2015, with the currency having strengthened by nearly 2.4 per cent against the dollar this week [12-16 February]. The currency has also strengthened against all of the G10 currencies, suggesting that the confirmation of Zuma vacating his position has benefited investor sentiment,” Ahmad added.


The Standard Bank Purchasing Mangers’ Index (PMI) registered at 49.0 cont. overleaf

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by the numbers





million EXPORTS

4 2 0

Source: IMF World Economic Outlook Database (Update January 2018)—estimated

LONG-TERM TRENDS I 3-year averages Population (million) GDP (USD bn) GDP per capita (USD)
















GDP growth (%) Fiscal Balance (% of GDP)




Public Debt (% of GDP):







Inflation (%): Current Account (% of GDP):




External Debt (% of GDP):




Source: FocusEconomics Consensus Forecast Sub-Saharan Africa—November 2017

USA 7.6% Other EU-28 14.2% Germany 6.5% Other Asia ex-Japan 16.2%

China 9.2% Other SSA 11.0% Other MENA 8.2% Other 35.2%


120 Agriculture



Ranked 51 out of 189 USA 7.1% Other EU-27 18.2% Germany 11.4% Other Asia ex-Japan 16.2%

China 18.4% MENA 6.7% Sub-Saharan Africa 6.7% Other 15.3%

Source: FocusEconomics Consensus Forecast SubSaharan Africa—February 2018

% 28.8 total tax rate


2008-10 2011-13 2014-16

Net Exports






Other Industry


Government Consumption




Private Consumption



in 2018

GDP by Expenditure I share in %

2008-10 2011-13 2014-16


in 2017

Source: IMF World Economic Outlook Database (Update January 2018)

ECONOMIC STRUCTURE GDP by Sector I share in %

% 0.9% 0.7 Projected Projected

Source: FocusEconomics Consensus Forecast Sub-Saharan Africa—February 2018

Source: PwC Paying Taxes 2017 analysis

COMPETITIVENESS Ranked 47 overall

Ranked 11 for financial market development

out of 138 Source: Global Competitiveness Report 2016-2017/ World Economic Forum

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cont. from page 29

in January this year, a small gain from 48.4 at the end of 2017. The indicator uses the 50-point threshold to indicate business expansion from contraction. The overall figure is derived from new orders, output, employment, suppliers’ delivery times and stocks of purchases.

The market reaction to Zuma stepping down from position as President of South Africa has been a positive one.










4.5 Month-on-month (left scale) Year-on-year (right scale)

-0.5 Nov-15






Note: Year-on-year and month-on-month variation of consumer price index in %.

—Jameel Ahmad, Global Head of Currency Strategy and Market Research, FXTM

Source: Markit/Standard Bank/FocusEconomics


January’s figure of 49.0 makes the sixth successive month that headline PMI has been recorded below the 50-point mark. This suggests a continued deterioration in business conditions in South Africa, with business activity contracting in the wake of decreased client demand and firms struggling to win new business. The exception to this overall negative trend were reported employment figures, rising for the first time in three months. Commenting on January’s survey findings, Thanda Sithole, Economist at Standard Bank, said, “The private sector PMI for January 2018 indicated that domestic business conditions continued to deteriorate albeit at a slower rate posting a reading of 49.0



46 Dec-15









Note: Standard Bank Purchasing Manager’s Index. Readings above 50 indicate an expansion in business conditions while readings below 50 point to a contraction. Source: Statistics South Africa and FocusEconomics calculations.

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from 48.4 in December. This is still lower than both the 51.3 posted in January 2017 (which was a fall from an expansionary territory whereas the latest print is an uptick from a contractionary territory) and the 49.8 average for 2017. “In our view, the uptick in the private sector PMI toward the 50-point mark is in itself a positive signal and we expect continued uptick over the coming months premised on improved economic optimism following the improving domestic political backdrop

For 2018 the Central Bank forecasts inflation at 4.9 per cent and 5.4 per cent in 2019. FocusEconomics’ panellists in its Consensus Forecast expect inflation to average five per cent in 2018, and 5.2 per cent in 2019.


Despite the removal of Jacob Zuma as the President of South Africa, the legacy left behind is one of corruption and state capture. The incoming administration will need to work hard on fixing these issues. Ramaphosa

The key point from a credit perspective will be the new leadership’s response to the country’s economic and fiscal challenges and progress in implementing reforms addressing them. —Zuzana Brixiova, Vice President, Moody’s

and some government intervention to restoring good governance in State Owned Entities (SOEs). This combined with pent-up demand should underpin a reasonable economic recovery, although the upside is constrained by structural impediments.”


Inflation decreased to 4.6 per cent in November, within the Central Bank’s target range of between three and six per cent, from 4.8 per cent in October. Annual average inflation also decreased slightly to 5.4 per cent in November, from 5.6 per cent in October. Since April 2017 inflation has stayed within the Central Bank’s target range.

has already pledged to address South Africa’s endemic corruption problem and promote a more business-friendly environment. Doubts remain as to how effective these economic policies may be, however. “The new leadership could bring confidence and faster implementation of key reforms already undertaken. However, Mr. Ramaphosa and his administration will require time to design and implement measures to improve economic growth and stabilise public finances, given the structural and institutional challenges that South Africa faces,” said Standard & Poor’s following the resignation of Zuma and formal

IMFC SELECTS SOUTH AFRICAN RESERVE BANK GOVERNOR LESETJA KGANYAGO AS NEW CHAIRMAN The members of the International Monetary and Financial Committee (IMFC), the policy advisory committee of the Board of Governors of the International Monetary Fund (IMF), selected Lesetja Kganyago, Governor of the South African Reserve Bank, as Chairman of the Committee for a term of three years. Kganyago will replace Agustín Carstens, the former Governor of the Banco de México, who himself resigned in December 2017 to assume the position of General Manager of the Bank for International Settlements (BIS). “I congratulated him both on his election as President of the African National Congress (ANC) and on the nomination of Lesetja Kganyago, Governor of the South African Reserve Bank, as Chairman of the International Monetary and Financial Committee,” said Christine Lagarde, Managing Director, IMF in the follow-up to a meeting held with Cyril Ramaphosa in late January. The IMFC, comprising finance ministers and central bank governors, is the primary advisory body of the IMF Board of Governors and deliberates on the principal policy issues facing the IMF. The Committee has 24 members, reflecting the composition of the IMF Executive Board. Each member country or group of countries that elects an Executive Director also appoints a member of the Committee. A full-length interview with Lesetja Kganyago can be found in Banker Africa #41.

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Real GDP growth





Real GDP per capita growth





CPI inflation





Budget balance % GDP





Current account % GDP





Source: Data from domestic authorities/African Economic Outlook 2017/estimates (e) and projections (p) based on authors’ calculations.

swearing in of Ramaphosa as president. “Economic growth remains low, impeding the path to fiscal consolidation. We think the government will attempt to introduce offsetting measures in an effort to improve budgetary outcomes, but these may not be sufficient to stabilize public finances in the near term. We have determined, based solely on the developments described herein, that no rating actions are currently warranted,” the agency continued. Moody’s made similar statements with Zuzana Brixiova, Vice President, commenting, “Moody’s is closely monitoring developments in South Africa and is focused on the policy implications of ongoing changes in leadership. The key point from a credit perspective will be the new leadership’s response to the country’s economic and fiscal challenges and progress in implementing reforms addressing them.” Christine Lagarde, Managing Director of the IMF met with Ramaphosa in late January, prior to the Zuma resignation, and said that, “We concurred that long-standing structural challenges continue to weigh on growth in South Africa. We consequently agreed that bold and timely reforms are needed to create an environment conducive to job creation and less inequality.

CAPITEC TARGET OF SCATHING REPORT Viceroy Research, a US-based short seller and research firm released a report on Capitec Bank in early February accusing Capitec of poor loan practices and refinancing loans that customers would be unable to pay. The publication of the report caused shares in the Stellenbosch, South Africa-based bank to drop by the most on record. However, the manner in which the report was released has been criticised by observers as reckless. It has further been revealed that Viceroy had taken up significant short positions on Capitec in the lead-up to the report’s release. The National Treasury called for a probe into the bank after the allegations were made, whilst Capitec has reported that its customer numbers are stable. Capitec’s shares rebounded after the initial drop before falling again as Viceroy doubled down its claim that the bank’s lending practices exploit customers and the organisation should be placed under curatorship. Viceroy has cited anecdotal evidence that the bank issues new loans to clients in arrears, whilst Capitec has stated that it does not do so. Parallels have been drawn by Viceroy between Capitec and failed lender African Bank Investments, which collapsed in 2014 as bad debts soared. However, unlike African Bank, Capitec relies on other forms of funding beyond the bond market, such as deposits. In a statement, Capitec said that Viceroy’s latest report, “Is again filled with factual inaccuracies, misleading half-truths and sensationalist statements.” “Capitec operates in one of the best regulated financial industries in the world. Various regulators and government institutions have confirmed their support of Capitec since the release of the Viceroy Report. In addition, international independent rating agency, Standard & Poor’s, said that the report had no bearing on its rating of the bank,” the statement added. Capitec has grown from a small Stellenbosch based bank, to the country’s second largest retail bank. The bank has made huge growth from providing unsecured loans to the low- and middle-income market. “Recent initiatives to improve governance and strengthen public institutions are steps in the right direction. These efforts need to be sustained and be complemented both

by fiscal policies that stabilize debt at manageable and sustainable levels, and by the reestablishment of business confidence to make the economy more productive and competitive.”

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Will South Africa’s new leadership usher in a new era of conscious capitalists? By Neill Hobbs,

 Co-Founder and Director, Anuva Investments


he public, media, business sector and indeed the markets have been eagerly awaiting the resignation or removal (whichever was to come first) of Jacob Zuma as president of South Africa. Faced with the option of voluntarily stepping down or being voted out in Parliament, Zuma begrudgingly chose the former. As the rand strengthens, the country, continent and indeed the world are now looking to his successor Cyril Ramaphosa to fill the vacuum of ethical leadership. Many are hoping to see leadership that focuses on integrity and transparency in both the public and private sectors. Hopefully the era of corruption at the highest level and the resulting fall-out for ordinary South Africans is quickly coming to an end. Corruption in government and public-sector entities is an obstacle to economic growth and prosperity because it steals from the taxpayer— with the poor always being hardest hit. Neill Hobbs

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It is an affront to the social contract that binds a nation, but it isn’t the only obstacle to a shared value system. While many businesses operate within a regulated environment and are expected to comply with corporate governance codes, their single-minded focus on the bottom line is not always in synergy with the social contract. Such businesses are solely focused on creating value for shareholders, perhaps because they don’t believe strong financial returns are possible any other way. Contrary to this, businesses that have purposefully moved from a shareholder-only focus to a corporate philosophy known as conscious capitalism have performed 10 times better than those that have not made the transition, according to Harvard Business Review. Such companies and brands are particularly sought out by socially conscious millennials—with a significant 40 per cent more likely to base purchasing decisions on their ability to help certain causes. A recent report by Deloitte found that a corporate focus on social impact not only aids in attracting and retaining millennial talent, it can also boost both corporate growth and the bottom line. “A conscious approach to business sets in motion a self-perpetuating cycle that aims to benefit everyone along the value chain,” said Neill Hobbs, co-founder and director for Anuva Investments, a section 12J Venture Capital Company (VCC) that invests in South African small, medium and micro-sized enterprises (SMMEs).

CONSCIOUS CAPITALISM AND SMES As a critical component of the SA economy, SMMEs provide employment to about 60 per cent of the labour force. Total economic output from SMMEs accounts for roughly 34 per cent of GDP so the value in nurturing sustainable

businesses that are conscious about creating value for all stakeholders can have a remarkable knock-on effect. Historically however, this hasn’t been a focus. In a world where consumerism trumps altruism, Hobbs believes that individuals are trapped in a vacuum of self-interest and a lack of mindfulness. “People are subconsciously plugged into the rat race and have lost the curiosity to investigate why they do certain actions in both business and leisure. If we could add purpose, create a conscious culture and mindful leadership, we would be living a life with more meaning and purpose.” Conscious capitalism is puncturing the vacuum and allowing the valiant spirit of business to break free, he said.

AFRICAN CITIZENS ON THE RIGHT TRACK From an individual perspective, the African continent appears to be more socially oriented than the rest of the world. According to the World Giving Index 2017 released in September, despite a global downward trend in terms of generosity and the capacity to give back to civil society, Africa appears to be bucking this trend and is the only continent in the index to show an increase in helping strangers, donating money to a charity and volunteering time to an organisation. So, what about business? Is social impact increasingly becoming part of a company’s growth strategy and are executives intentional about their choices? From an investment perspective, The South African Revenue Service (SARS) has helped steer taxpayers in a ‘conscious’ direction in terms of Section 12J of the Tax Act, says Hobbs. Section 12J gives taxpayers a 100 per cent tax deduction in the year of investment if they invest in SMMEs. This is done by way of subscription of shares in a Section 12J Venture Capital Company (VCC).


Hobbs explained, “Anuva Investments contributes to the SMME by way of equity funding and in addition strategically guides the company in business principles that are absent in their day-to-day operations.” As a key growth engine within the local economy, giving SMMEs this boost has far-reaching effects.

SECTION 12J OF THE TAX ACT IS A ‘CONSCIOUS’ PROVISION What SMMEs have in energy and appetite for success they lack in working capital and possibly key skills and network. With Section 12J, these businesses are able to use tax-deductible equity funding to realise goals and fund growth. In this way, Section 12J has created an extraordinary opportunity to aid SMMEs while simultaneously creating Rand value for the individual investor due to the tax saving on entry into the investment, in addition to dividends and capital growth. “Section 12J advocates investment into manufacturing, which acts as a catalyst to a positive shift in the economy. SMMEs provide a platform of job opportunities for a large range of individuals in the base of the pyramid in addition to those individuals with more specialised skills and qualifications,” said Hobbs. For many, conscious decisions are guided by how an individual or corporate can generate value for society. “The gist of Anuva is to be financially successful by making a constructive difference in society through investments in manufacturing and SMMEs,” Hobbs said. Looking ahead, and with hopes for renewed business confidence in South Africa thanks to a new leadership, consciousness should be top of mind for businesses looking to drive innovation, growth, and social good, Hobbs added.

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Francophone Africa to the fore Dr Cheick Modibo Diarra, former Prime Minister of Mali, sat with Banker Africa to discuss the challenges facing francophone Africa and how to attract international corporates to the continent


hat does the future hold for the African francophone market?

The francophone market is burgeoning. The 31 francophone countries in Africa have traditionally been overshadowed by their anglophone counterparts. However, this is beginning to change because the IMF has stated that the economic growth in francophone West Africa for 2017 will average about six per cent, with growth attributed primarily to good governance and a general improvement in the business environment, that is a very bold statement. Good governance and general improvement in the business environment means that laws are being put into place to make doing business easier into those countries in West Africa. It’s likely that in terms of investment these jurisdictions will be placed higher than all the more advanced African countries like Kenya, Nigeria or South Africa—a change has also been helped by ongoing economic and political integration. I think that francophone Africa in the next

few years is going to be a really big destination for investors.

How do we improve that regional cooperation in francophone Africa, what more needs to be done? What needs to be done is to apply the laws that have already been put into place. For example, under the laws in UEMOA (West African Economic and Monetary Union), it is a custom for anybody that does business with a union of eight countries, regardless of the point of entry, to not be bothered by customs authorities in the entire zone. Meaning, for example, that if I bring a product through Côte d’Ivoire then every product can go from there to Mali, to Senegal, to Niger, to Togo, to Benin. Once I clear all customs in Côte d’Ivoire, that’s it, nobody should ask me anymore questions I should be moving freely with my goods and so forth. This takes something that is honourable, and it does work to a degree but sometimes the authority and the administrations themselves are

kind of lagging behind in information. This slows down the flow of goods and makes it difficult to do business, whilst on the other the end, if for instance I built a factory in Mali, any goods that are made should have the ability to be sold into any of the other seven countries in UEMOA without having to clear any customs. However, sometimes the people who are working at the borders between those countries themselves are lagging behind in knowledge of the law. The law is already in place, but we need to make sure now that it is implemented to a tee, if we can do that then the improvement will be felt immediately.

How can we bring about this regional rule of law and good governance? What we will see is that the countries which are sitting at the top in terms of governance, transparency and business improvement are going to contaminate others and pull them toward the higher grounds instead of pulling downwards. This is valuable because we are starting to see standards that

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Countries of Africa by percentage of French speakers in 2014. Source: La langue franรงaise dans le monde 2014. (CREDIT: WIKIMEDIA COMMONS/ UNDERLYING IK).

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are coming out and being adopted automatically by all countries that are a member of this grouping. It is like an unspoken peer review process that is not necessarily in a book but an understanding that if you want to be part of this group there are some things that are expected of you in terms of governance and the rule of law, such as passing new legislation to be able to join the community and take advantage of belonging to the community as a whole.

What risks do international corporates face when trying to expand into the African continent? The thing is, Africa is a big continent with over 50 countries, and each of those separate countries has its own risks and associated risk factors, but the core denominator that investors looking at Africa recognise as a common risk is political. However, even now we have seen that this has begun to change: in Kenya the Supreme Court annulled an election, a first on the continent, and we have seen ECOWAS (Economic Community of West African States) in the Gambia making sure an incumbent who lost an election was removed peacefully visibly with the assistance of the economic community. The landscape is changing, many political issues can now be resolved by internal judicial means.

Do we need to change the perception of international corporates that haven’t worked in the African continent before to become aware to the different risks associated with different countries? The problem is that when you want to actually change the perception of the international community to Africa it makes it look like it is lagging behind.

You may remember a time where people used to think that Africa was the hopeless continent, now we are at a moment where Africa is ‘rising’ or Africa is ‘open for business’, etc. However, if you look at it somewhere between the two there is a middle that is very positive but is it not as deliberate as some of the big titles would lead to think. I think the first way we can address this is in the way the media communicates the risk level of Africa. It is important for the community to look at the GDP growth, in addition to looking at many other factors. The price of commodities going down for example—falling oil and commodities prices has shown a slowdown in development and growth of Africa GDP, these kinds of things will be overcome by the resilience of Africa itself.

Dr Cheick Modibo Diarra, former Prime Minister of Mali

What can be done to improve the international appeal of doing business in Africa, as well as improve the perception of the continent? What must be done for Africa is to really start speaking for itself for it to be heard—for Africa to start telling African stories. For so long the story of Africa continues to be told by others who have sometimes meant well but have very little understanding of the complexities of Africa’s systems and how these systems interact, and not only at the country level,

but at the sub-regional level with economic organisations, and at the continent level, with the African Union and others. Until someone starts understanding all of that we will not get a good picture of what’s going on. That’s what I think that Africa needs. Right now, in the last few years, I’ve seen an increase in the number of TV channels being put to work in Africa where Africa is telling its own story and when people start coming based on that story and validating the story that is being told through those channels, I think that will help a great deal.

Dr Cheick Modibo Diarra is the former Prime Minster of Mali and Chairman of ALN (Africa Legal Network). He was the Prime Minister of Mali from April to December 2012 and the Chairman of Microsoft Africa from 2006 until 2011. He is a goodwill ambassador for UNESCO and also served as the CEO of the African Virtual University, based in Kenya, in 2002—2003.

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A golden opportunity

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Once a mining company has found proven gold and made an estimation at its worth, that’s when Sukuk issuance should begin, says Ahmed (CREDIT: CORLAFFRA/SHUTTERSTOCK).

Africa should use its natural resources to back new Sukuk, says Prof. Luqman Abdi Ahmed, Senior Adviser & Consultant, Al Amanah Consultancy


here is a challenge of a lot of African countries of a cycle of poverty. This has a lot to do with development, and development is very much connected to governance and transparency. The question is where to start? You’re not going to fix corruption unless there is business. The continent of Africa has many natural resources. What I propose is to utilise the natural resources and, before you get them out of the ground, to get an in-grown asset certificate. There are some organisations that will issue a bankable document to say that you own these resources, whether it’s gold, platinum, iron or whatever it may be. It goes through a lot of verification through geological companies. They can even say the volume, saying you

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Satellite imaging can greatly pinpoint a mine deposit with a 90 per cent accuracy (CREDIT: HARVEPINO/SHUTTERSTOCK).

have however-many tonnes of this metal, with a certain market value. There are mining companies that are looking for proven gold. They will invest. You can say where it is, how much there is, and how much it is worth. I then propose Sukuk issuance at that stage. The Sukuk’s purpose is to either get the resources out, or to partner with the mining company in

a public-private partnership. The end result is to get continuous sales out of the mine. This producing mine can have a 20-year lifespan in which every year they will produce a set number of tonnes which will meet the conditions of the fixed income of every year. Once we structure that, you would be able to pay back the investors, and

the majority of the money will go to infrastructure development. The whole idea of this is to finance the mining, get paid, and to give money to two areas that normally do not get funding.

WHO BENEFITS? One area in dire need of funding is SMEs. They are a high-risk group, not a good place to invest money, but they

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the government says they have, for example, 300 tonnes of gold in one site with a market cost to go along with it, this conversation will get easier. Sukuk means an ownership of the underlying asset, so the owner of the Sukuk owns a share of the product. Many investors will be attracted to a gold-backed Sukuk. That is why we’re going to pitch this. Once you unlock the in-grown asset, then you unlock a lot. The overhead to get this process started is so high that many people are scared off. No one wants to look for gold and not find it. That is where we found a solution. But there is a novel technology—a breakthrough—that is satellite imaging. This will make it possible to pinpoint the deposit, to an accuracy of 90 per cent. This study hasn’t been accepted because it is new, but in correlation with the hard science, I expect it to be accepted. The cost of doing this is less than five per cent the real cost of doing it, and timewise, instead of three years, it can be done in three months. You can go to the area now, and because it is so arid, you can dig holes in these areas with real knowledge. This time, you will not go to the wrong place and mess with the environment. This can make the process so much more streamlined. Instead of digging thousands of holes, you can dig maybe 100 holes. It reduces spending, reduces risk, and is something that any government can afford to do.

HOW TO SET UP THE SUKUK are 70 per cent of the economy. The entire economy rests on the SMEs but they do not qualify for any kind of loans from the banks—everybody doesn’t like them. This government-supported funding will aid the SMEs and aid the infrastructure that is a made up of huge projects that are very difficult to get funding for because of the credibility of the governments themselves. But once

Instead of granting loans to a country to pay for something, part of Shari’ah compliance is governance. The Islamic Development Bank (IDB), for example, can come in and oversee the whole process. This would make the entire process transparent. At the moment, money to do projects is disappearing. This would make all involved comply. The World Bank has also gotten very


good at checking for these sorts of things.

GLOBAL COLLABORATION The good thing about Sukuk is that the arranger of the Sukuk can be in Arab countries, the deposit can be in the Congo, and the buyers can be in London, for example. You do not have to have the asset, buyer and issuer in the same place. The IDB can issue it on behalf of the Somali Government. The IDB, then, has lots of channels to sell. People will then buy all of the world, but the assets are in Ethiopia, Somalia, or other countries that really need to raise funds for the projects. Once the gold is out, buyers in other countries are going to generate sales as well. The assets can be sold anywhere. In terms of the Sukuk, when buyers looking for a long-term secure vision hear that it is gold-backed, they will buy it.

WHERE TO BEGIN… In most countries, if this model kicks in, the central banks and the mining department of the companies will be the first ones interested. Once this asset becomes a guarantee then it becomes something in their coffers. Having $20 billion in assets is like having $20 billion in their safe. Next it will be the ministries of infrastructure. I have talked to many countries. The country that is the closest to adopting it is Ethiopia. I just spoke to the ambassador. Ethiopia would love to be a part of this, but Ethiopia is not a member of the IDB. IDB would be very good for this, but this can be intermediated by the African Development Bank or the World Bank. Ethiopia is the closest to this because they are the most transparent country in East Africa, they have the fastestgrowing economy and they need to raise capital to fund the world’s largest dam for hydropower. Ethiopia would be ideal in East Africa.

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Sukuk rising Sukuk could be the key to unlocking Africa’s potential


any African countries have been on the brink of an Islamic banking boom for almost a decade, however development has been somewhat stunted. This is not through lack of demand. Islam first spread its prayer mats in Africa in the early 7th century, and today it is thought that a third of the world’s Muslim population call the continent home. Still, Islamic finance remains at an embryonic stage.

THE RIGHT RULES However, recent developments suggest that Islamic finance is coming of age on the continent. In 2017, Kenya’s government unveiled a raft of measures to boost the country’s decade-old Islamic banking sector. The new laws promise to create a framework for Islamic funds and banking, and cradle a Sukuk sector. While Kenya was relatively quick to cotton onto Islamic banking, it has lagged behind its African peers in the development of a Sukuk market. No Sukuk has been issued in the East African region, despite the government teasing the market with its intentions to do so. In November, Nasdaq Dubai and The Nairobi Securities Exchange signed a Memorandum of Understanding (MoU) to help nurture a Sukuk sector in Kenya.

Under the MoU, the two exchanges will collaborate on the issuance and listing of Sukuk by the Kenyan Government, government-related entities and private businesses. The exchanges also hope to promote Islamic capital markets products together. Hamed Ali, Chief Executive of Nasdaq Dubai, said, “As the region’s international exchange with growing links to African countries, Nasdaq Dubai looks forward to supporting the Nairobi Securities Exchange, the Kenyan Government and the country’s capital markets community as they develop a thriving Sukuk sector. “By cooperating and sharing our respective expertise, the two exchanges will provide powerful support for the growth of Islamic finance in Kenya.” Geoffrey Odundo, Chief Executive of the Nairobi Securities Exchange, added, “We look forward to benefiting from Nasdaq Dubai’s extensive experience as a global leader in Islamic finance, as we build our own Sukuk sector in Kenya by promoting issuance and listing as well as attracting local and international investors. “The development of the Islamic capital markets can provide significant support for funding national development and growth while strengthening our international relationships.”

SUKUK SUCCESS Kenya’s decision to position itself as a hub for Islamic finance is timely; as the pace of development quickens in Africa, Kenya can’t afford to be left behind. Already, Senegal is two Sukuk

issuances ahead of Kenya. It issued its debut offering in 2014, with the ICD acting as one of the lead arrangers. Its second Sukuk in June 2016 was valued at $350 million, the proceeds from which will be used to finance Senegal’s economic and social development projects, including the urban centre of Diamniadio, a drinking water supply programme, and a road and street lighting programme. Not wanting to be outdone, South Africa became the third non-Muslim country after Hong Kong and the UK to issue sovereign Sukuk in September 2014. Looking to emulate Senegal and South Africa’s success, Cote d’Ivoire has since made inaugural debuts in 2015 of $260 million. Togo issued its maiden Sukuk worth $277 million in July 2016, becoming the third state in the West African Economic and Monetary Union (WAEMU) to issue a Sukuk after Senegal and Cote d’Ivoire. Following its five-year Sukuk programme with the ICD, Cote d’Ivoire issued its second sovereign Sukuk valued at $263 million in August 2016.

SUSTAINING SUKUK Sukuk may provide new answers to Africa’s age-old problems. Africa has been billed as the next new powerhouse of the world, by virtue of its strong macroeconomic growth, a rising middle class and the world’s youngest population. And yet the seemingly intractable nature of Africa’s poverty continues to blight its potential. As an alternative

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Islamic finance could play a role in Africa’s infrastructure story (CREDIT: TAKE PHOTO/SHUTTERSTOCK).

type of funding, Islamic finance and its inherent characteristics lend themselves well to facilitating and promoting sustainable development in the continent. “In particular, Sukuk as an alternative means to mobilise medium to long-term savings and investments from a huge investor base continues to be an important source of much-needed capital to meet the ever-increasing demand for sustainable infrastructure development across the globe,” said a recent report from the International Islamic Financial Market (IIFM). Sukuk has long been the posterchild for Islamic finance across the globe. While consumers struggle to understand banking on faith, the corporate world

While Kenya may be late to the game when it comes to issuing Sukuk, it is among the first of its African peers to introduce regulations.

has been quick to comprehend the benefits of a Shari’ah-compliant bond. “Sukuk has proven its viability and dynamism as a global product for fundraising and investment activities in the international financial markets and this has been a key driver behind the interest in Islamic finance,” explained the IIFM.

BUILDING BETTER LIVES Africa’s lack of infrastructure is one of its biggest barriers to sustainable economic growth. Infrastructure investments contributed to more than half of Africa’s improved growth performance between 1990 and 2005, according to research by the Overseas Development Institute.

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As countless studies have shown, when developing countries focus on upgrading their infrastructure, economies and people’s lives will inherently transform for the better. The returns on investment in infrastructure are very significant, with on average 30–40 per cent returns for telecommunications (ICT) investments, over 40 per cent for electricity generation, and 80 per cent for roads. Therefore, bridging Africa’s infrastructure gap as a means of addressing the continent’s numerous developmental challenges cannot be understated. “Ultimately, the burden of financing Africa’s infrastructure projects can shift away from banks towards the Sukuk market,” the IIFM said. The IIFM believes that the recent sovereign issues in Africa will not only serve as an impetus for other African governments to follow suit and diversify financing instruments via Sukuk, but it will help the Islamic finance industry to mature and expand outside of the industry’s core centres in the Middle East and Southeast Asia. It has been reported that several African countries are in the midst of preparing legislation to facilitate further Sukuk issuances. In fact, the BCEAO (the central Bank of eight countries in the West African Economic Monetary Union) have already pledged to implement Islamic finance regulations; Uganda and Tanzania are working towards building Islamic finance sectors in their respective markets. In 2016, the WAEMU’s regional stock exchange, the BRVM, became the first stock market for Islamic finance in Africa with five Sukuk listings from Côte d’Ivoire, Senegal and Togo amounting to $1.3 billion. While it is hoped that the listings will beef up the regional Sukuk market by attracting new entrants and boosting liquidity, the sector is not without challenges.

“Moving forward, it is crucial for entrants of the newly minted sector in Africa to recognise the multidimensional challenges that will need to be confronted,” the IIFM said. “Increasing awareness and the acute understanding of Shari‘ah-compliant products as well as employing a comprehensive marketing strategy is important to educate and engage new customers in order to increase penetration levels.”

REWRITING THE RULES While Kenya may be late to the game when it comes to issuing Sukuk, it is among the first of its African peers to introduce regulations—and these still require fine tuning. The International Monetary Fund (IMF) has warned that Kenya is yet to refine its regulations for Islamic banks. “The legal framework exhibits some gaps, prudential frameworks have not been adapted to the specificities of Islamic banking and there are also remaining gaps in the Shari’ah governance framework, consumer protection framework, liquidity management, resolution and safety nets,” the IMF report said. The IIFM said that while a nationwide strategy would be welcomed, it is crucial that any regulations are tailored to the specific characteristics of each country, paying close attention to the size of the economy and its conventional financial system. As the Islamic finance sector is set to swell over the next few years, regulators will need to move quickly to ensure sustainable growth. According to the fifth edition of the Islamic Finance Development Report and Indicator, Sub-Saharan Africa is a fastgrowing region in Islamic finance. The report studied key trends across five indicators used to measure the development of the Islamic finance industry, namely: quantitative


development (QD); knowledge; governance; corporate social responsibility; and awareness. The overall Islamic Finance Development Indicator (IFDI) acts as a barometer of the overall industry’s development. According to the findings, the average IFDI value of Sub Saharan Africa rose strongly for 2017 as new regulations introduced in countries including Kenya and Uganda boosted its governance indicator. The Shari’ah governance subindicator value also rose with the addition of Shari’ah scholars at newly established Islamic financial institutions in Kenya and other countries, as well as a new, centralised Shari’ah board in Djibouti. Another indicator that has been active for the region is awareness. News concerning the potential growth of Islamic finance and Sukuk in West Africa increased in 2016. Events such as conferences and seminars were also contributing factors in countries such as Nigeria, Tanzania, Djibouti and Zambia. For the QD indicator, Sukuk was another gainer as there was increased issuance in 2016, whether sovereign or quasi-sovereign. Khaled Al Aboodi, CEO of ICD, said, “Incorporating Islamic finance in different strategies can be seen in the many steps taken by governments across different IFDI indicators. This was noticed when some authorities intervened in Islamic social funds management, raised literacy in the industry among potential market players through formal education systems, organised roadshows targeting potential market players, or built a roadmap to plot development of the overall industry.” If Africa puts the right measures in place in time, Sukuk can be channelled towards sustainable and inclusive economic growth.

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Crashing into the future The app is meant to be setup once and then runs in the background.

Jaco Gerrits, the CEO of South Africanbased start up CrashDetech, spoke with Banker Africa about what the company is trying to achieve and what the future holds


he Automobile Association of South Africa released figures late last year depicting a significant increase in the number of road traffic fatalities year-on-year, recording the highest number of road traffic deaths in the past 10 years. Furthermore, the World Health Organisation has

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noted in its report on road safety that the African continent has among the world’s most dangerous. CrashDetech, the focus of our Trailblazer this month, is aimed squarely at the issue of traffic fatalities on the streets of South Africa. The company was born out of an idea by its founder and CEO Jaco Gerrits around three years ago when he began looking at what additional uses the accelerometer within a smart phone could be used for, beyond its typical application to detect which direction the screen is oriented to. “I was thinking about the different applications that the sensor could be used for and the idea of detecting vehicle crashes came to me. We then started an investigation around the realities on the roads, not only in South Africa but globally, and we found out that there’s actually a massive social and economic impact,” said Gerrits. “The big idea for this application is to detect a car crash and within seconds dispatch the nearest emergency response vehicle as soon as possible. We’re trying to address two things: first we’re trying to cut down the emergency response time, and secondly also ensure that the person receives the correct medical treatment at the accident scene,” added Gerrits. The app is meant to work by a simple install and forget process with users setting up their account on their smartphone once and the app automatically monitoring trips. Once it has detected a car crash it will send the location and additional information to CrashDetech’s emergency medical services (EMS) environment. If the operator is unable to contact the user via a phone call a dispatch vehicle is sent immediately. From the inception the app posed some serious technical and engineering challenges. Notably the app would need to not only be able to detect

crashes but also crucially eliminate false positives—one of the challenges of working within the sensitivity range limitations of smart phone technology. “Being a technology solution there will always be some limitations. There’s a 100 per cent detection rate for serious vehicle crashes, so vehicle crashes that generate a lot of force where you are typically unable to call the emergency call centre yourself. We aren’t positioning the technology as one that’s able to detect smaller

The big idea for this application is to detect a car crash and within seconds dispatch the nearest emergency response vehicle as soon as possible. – Jaco Gerrits, CEO, CrashDetech

vehicle crashes but with bigger vehicle crashes we will have a 100 per cent success rate,” said Gerrits. In addition, the app also requires that data and location services are enabled on the user’s device, so that the emergency call centre can be notified of the scene of the accident. CrashDetech has partnered with some 110 emergency medical service companies located across South Africa. Gerrits notes that this means that the company provides access to the largest independent national network of emergency personnel and at any given time in South Africa CrashDetech has access to more than 5000 paramedics


and a 24/7 emergency call centre to connect with a medically trained agent to give advice during an emergency prior to the arrival of EMS. These partnerships are key to the company in its quest to cut down response times. As a subscription-based model the company offers several tiers aimed at different price points. Ranging from the free tier, which provides crash alerts for up to 30 trips a month up to Elite at ZAR 99 a month. Additional services that are packaged in include ‘Medical ID’ which allows paramedics to have automatic access to your personal medical information, ‘Lawyer SOS’ a service wherein a criminal lawyer will be dispatched to represent you in person at the scene of the accident and post bail, and ‘Road Secure’ which in the case of a breakdown means an armed security guard will be sent to the user’s location anywhere in South Africa in under 30 minutes. The company also offers several different insurance products ranging from ZAR 50,000 to ZAR 100,000 aimed at giving access to hospitals, as well as covering death, disability and evacuation cover. “The reason we launched the insurance component was because the majority of South Africans don’t have access to medical aid and the state care is really not up to scratch. We saw a gap in the market for an accidental cover product that’s complemented by our technology element, so we developed it to now ensure that [our users] can get access to private care,” added Gerrits. The future of the company could lie in the detailed acquisition of telematic data on driver behaviour statistics and use that to create additional products. “Using perpetual awareness we would be able to have a better understanding of our underwriting risk. We are working on it at the moment but currently we are not collecting data on

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Jaco Gerrits, CEO, CrashDetech

our users beyond around crash events specifically,” said Gerrits. “I think the key focus of the company is definitely going to be in the big data space and understanding the behaviour of our customers. I think there’s a huge opportunity and, in partnership with other entities, commercialise that data in new and exciting ways!” As to expansion plans, Gerrits outlined two broad strategies that the company is pursuing. For its B2C (business-to-consumer) model, CrashDetech sells and markets its own subscriptions, an area which still has expansion in South Africa. Outside of South Africa, the model will likely need to be adapted to

each individual market’s needs. For instance, crime may not be as big an issue so roadside security might not be as big a value proposition, meaning that CrashDetech will be looking to refine its subscriptions based on which territory it is operating in. However, the company’s B2B (business-to-business) model is where a significant part of the company’s expansion will take place. “We are actually in negotiation with a number of [other countries]. It’s definitely the plan to licence this technology to insurers, banks, telecommunications companies, etc. We will be looking for key partnerships where we can roll this technology out as far out as possible.”

The reason we launched the insurance component was because the majority of South Africans don’t have access to medical aid. – Jaco Gerrits, CEO, CrashDetech

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12/06/2017 14:27 11:36 07/03/2018



Financial services disrupted: open banking and AI There are two key technological developments that stand out as major disruptors in the banking and finance space, says Wissam Khoury, Managing Director, MEA, Finastra


he banking industry is undergoing a major transformation. Banks and financial institutions are continuously exploring new ways to leverage technology to reduce the cost of operations, improve customer experience and speed time to market. Among these challenges, two technology developments stand out in terms of their potential for disruptive innovation.


Data sharing between banks and authorised third party applications (such as personal finance managers or payment aggregators) has been tried with some success in parts of Europe and the US. The real push has been driven by two recent regulatory developments: the EU Payment Services Directive (PSD2) and The UK Competition and Markets Authority (CMA) initiative on open banking. However, when it comes to the Middle East, things are a little different. Fintechs have undeniably disrupted the traditional banking model. The regulatory burden is escalating and the regional correspondent banking relationships are witnessing a dynamic shift. Amidst all this, the industry is

Wissam Khoury

also expected to make a transition to open banking—which raises issues of its own. Concerns around data sharing and cybersecurity are prevelant and must be taken seriously, but the industry must also find solutions to

enable it to put this discomfort aside and realise the benefits on offer. The PSD2 mandate and the UK open banking initiative are27 going to create a level playing field for incumbent large banks and new entrants alike.

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Both these initiatives, which are expected to be implemented in 2018, will unleash fierce competition for market share and see the launch of many innovative services using secure open APIs which banks will have to provide. This will enable european banks to continue vying for a bigger share in the global banking and financial services industry. The open banking model encourages sharing data through open APIs and works towards developing an open banking standard. This data exchange between banks and thirdparty application service providers will enable consumers to:  Get a 360-degree view of all their banking accounts and cards  Manage finances using a single signon app  Find trustworthy and objective information on products and services of different providers in one place for comparison  Initiate payments from various accounts using a single app Quite a few fintech companies are witnessing renewed attention from industry stalwarts on public facing APIs, partner focused APIs, and internal APIs. Banking and nonbanking entities need to gear their processes towards an open banking paradigm as it gains momentum.


Banks and financial institutions sit on a treasure trove of data. Many have analytical tools in place to extract value from this data, but it is here that artificial intelligence (AI) can bring real value. Machine learning, cognitive computing and natural language processing capabilities can maximise the insight banks can extract from this wide availability of data. The first, and arguably the most critical, aspect that AI can cater to is fraud identification. Fraud impacts

both the bottom line and the reputation of the bank. Although banks, of course, have detection solutions implemented, they are not foolproof yet. AI can help identify fraud for intervention, using a combination of:  rules and reputation lists, where a human encoded logic is used  supervised machine learning, where the machine is fed historical data of fraudulent behaviour to flag suspicious activity today  unsupervised machine learning, where hierarchical clustering or principal component analysis are used AI can also help to catch human error, for example to prevent fat finger trades. Another major aspect where AI can make a real difference is the customer experience. An AI solution can help delve deeper into both structured and unstructured data to bring out meaningful insights. This can uncover hidden patterns, subtle buying preferences and triggers for dissonance of customers. Once you know your customers better, you can personalise your engagement with them. You can be proactive rather than reactive. These insights and customer knowledge will further help the industry create more intelligent and customised products and services for customers. In fact, a few Middle Eastern banking groups are already piloting an AI driven virtual assistant with a limited set of customers. There are also a few banks that are currently using beta versions of chatbots to improve customer service and loyalty. Perhaps this is where the most significant opportunity lies—in AI’s ability to automate the frontline. Chatbots are already being implemented and tested across several organisations globally. The financial sector can also use them to reduce human managed processing


and automate customer engagement, freeing up bank employees for more value-added tasks.


One of the biggest concerns when it comes to technology in the financial sector is the protection of data. Integrating new technology into the architecture has its upsides. However, it cannot be done at the expense of data security. In the open banking system, there are still lingering questions around custody of data and its protection. There are audit trails and regulatory requirements that need to be taken into consideration. Sharing of sensitive data also requires a certain type of infrastructure laced with security protocols, technical connections and governance rules in place. For Middle Eastern banks, the downsizing of correspondent banking relationships is another strategic challenge that needs to be addressed. Lack of data transparency may cause a few international banks to exit regional relationships which could threaten business. Another limitation that the industry faces today is the knowledge available. It is important now to look for AI experts—who can take up leadership positions for AI in organisations? The industry must encourage the right skillsets and may need to consider training employees to handle new technology.


Although there are a few challenges that can be envisaged around AI and open banking right now, the cost of not embracing these innovative technologies is going to be exceptionally high in the near future. Banks must combine technology with human intuition at this point. Once they achieve it, they will be better positioned to meet the demands of today’s digital customers.

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‘Consumerising’ the enterprise service experience Businesses need to truly digitise their backend, says Mark Ackerman, Regional Director, MESAT & EE, ServiceNow


or online retailers and consumer services companies, delivering a great customer experience is a matter of survival. Companies such as Amazon, eBay, Airbnb, and Uber spend untold millions, so customers can find exactly what they want—and order it in seconds. These companies have also invested heavily in automated backend processes, delivering high-quality products and services both quickly and economically. This has driven a consumer service revolution. Unfortunately, the same can’t be said for internal company processes. Most workers don’t find their enterprise services as easy to use as consumer services. They also complain about long waits for deliveries, and they say that manual processes lower their productivity and prevent them from focusing on more important work. This is unlike the consumer world where they can switch to a competing site when they’re dissatisfied—at work they have little recourse. If they don’t like working with the HR department, there’s no alternative.

Yet, many of these workplace services deliver the equivalent of consumer services. In principle, there is no difference between opening a purchase order and buying a concert ticket online—except that enterprise services are still delivered using decades-old technology and unstructured processes.

CLOSING THE GAP If your company wants its enterprise services to be more like consumer services, you need to transform the way you deliver those enterprise services. Simply putting a list of services on a webpage is not enough—your company can only reap the benefits by truly digitising work and replicating the consumer experience. Target all of your company’s manual, ad hoc services that are driven by email and other unstructured tools, and replace them with automated, efficient, and repeatable processes and platforms. Mark Ackerman

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As soon as you automate your workplace services, you will begin to see the consumer services gap diminish. IT teams and shared services teams can take the lead on this effort. By working with the line of business, these teams can identify the company’s key—but informal, manual, and email-based—workplace services and automate them.

SERVICE PORTALS Service portals provide a single, consistent way for users to access the services they need. Using a web interface or mobile app, you can find and order the products and services you want, check out with the click of a button, find out when your order will arrive, get support, and even chat with an online agent. If you’ve ever made a purchase on Amazon, you’ve used a service portal. Service portals dramatically simplify the frontend user experience, making online consumer services fast and easy to use. Modern enterprise selfservice portals deliver a similarly ‘consumerised’ experience by giving your internal users one consistent way to work with IT, HR, finance, and other groups that provide enterprise services. Think of an enterprise service portal as your company’s own internal storefront. Similar to consumer service portals, users can see all of the products and services they can request, search for products using keywords, compare different products, receive product recommendations, personalise

products according to their needs (like business cards), fill their shopping baskets, place and track their orders, and get online support when they need it.

WORKFLOW AUTOMATION Workflows automate back-end fulfilment processes—like processing orders, getting approvals, sending status updates, etc.—to make them efficient, repeatable, and reliable. Workflow automation closes the gap between consumer and enterprise services by driving structured processes and by providing visibility at every stage of service request fulfilment. Service fulfillers can offer fast, committed delivery times, and users can see their request status at any point. This precisely parallels the consumer service experience. For example, when onboarding an employee, the workflow platform automatically alerts the security department to issue a new badge, the IT team to issue a new laptop and the finance department to issue a new credit card and then tracks whether the activities are completed. If there is any delay, the workflow platform automatically escalates the activity to resolve the reason for the delay. Workflow platforms also handle approvals and send regular status updates to the requesting managers.

KNOWLEDGE BASES AND COLLABORATION TOOLS Enterprise knowledge bases and collaboration tools empower


employees. With a knowledge base, employees can share information by creating, editing, and viewing knowledge articles on a wealth of information from HR policies to solutions for common IT issues. By creating a comprehensive knowledge base, companies give employees instant access to the information they need, which simplifies their lives and reduces the time they spend on help requests. Collaboration tools complement this by allowing employees to work together to answer unique questions or resolve complex issues. Today, enterprises still rely mainly on manual, ad hoc methods to deliver workplace services. They depend heavily on unstructured emails, phone calls, and even personal visits to request and fulfil these services, creating a major drag on organisational efficiency. Compared to consumer services, enterprise services are far behind—they are much more difficult to request, and they take much longer to deliver. To change this experience and to prosper in the digital economy, companies need to digitise their work processes, so they become as easy and fast as consumer services like Amazon and Uber. By offering a consumer-like front-end experience and by automating their back-end fulfilment processes, companies can radically improve productivity and create an agile, efficient organisation that responds effectively to the needs of external and internal customers.

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HE Tarek Amer, Governor, Central Bank of Egypt

The future of fintech Enabling and developing a fintech ecosystem and financial inclusion were prominent discussion points at Seamless North Africa


rom 6-7 February 2018 members and stakeholders from across the financial ecosystem came together to discuss the future of finance at Seamless North Africa 2018, held in Cairo at The Nile Ritz-Carlton. This was the first year that the North African version of Seamless had been held. Day one of the conference saw the discussion centred around how fintech can help enable financial

and digital inclusion. Held under the host of the Central Bank of Egypt (CBE), HE Tarek Amer, Governor of CBE, gave a keynote regarding how Egypt can adapt and become an international innovation hub for fintech. He added that, “The most precious capital we have in our country, minds and brains, hasn’t got the support it should have, if we focus on this it will provide the financial stability that we need.”

During his keynote the Governor announced that the Central Bank is considering launching a digital bank to support SMEs and financial inclusion. The rise of the digital bank has already been noted in other African markets. As consumers become more digitally savvy and mobile phone penetration increases banks will need to move in line with consumer demand. The Governor added to this and said, “The application of technology

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in banking is important for the development of society.” The Monetary Authority of Singapore (MAS) and CBE announced an agreement to boost fintech innovation between the two countries at Seamless North Africa with the signing of a memorandum of understanding. It is understood that the agreement will allow both parties to collaborate on further innovation projects and share knowledge on individual fintech companies. Brett King, the founder of Movenbank and author of Bank 2.0 and Bank 3.0, also gave a keynote looking at how institutions can adapt to the digital age. King stressed that banking is moving away from the Bank 3.0 model, the mobile banking model, towards banking 4.0 which will feature embedded technology in our everyday lives.

The application of technology in banking is important for the development of society. – HE Tarek Amer, Governor, Central Bank of Egypt


Day two of the conference focused on how to develop a fintech ecosystem. Morning discussions centred on how a country can grow to become an innovation and fintech power hub and what role regulators play in this development. A keynote by Aleesandro Hatami, Managing Partner, Forestreet began the day. Hatami spoke to how to foster entrepreneurship in the fintech ecosystem and what role banks need to play. “Customers do not trust and are dissatisfied with their banks in general,” Hatami said when talking to how banks need to adapt to the new digital age. The final event of the day was the Seamless North Africa Pitch-off which featured five start-ups and fintechs from the African continent pitching to an expert panel. Each start-up was given five minutes to pitch their product or solution with a potential cash prize of $15,000 available.

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Venture forth Eva Warigia, Executive Director, EAVCA speaks with about what 2018 holds for the venture capital space in East Africa

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hat is your outlook for venture capital and private equity throughout 2018?

While 2017 was considered a difficult year for business in general in East Africa for various macro-economic and political reasons, we anticipate that deal activity for both VC (venture capital) and PE (private equity) will rise in 2018.

Last time we spoke you mentioned a shift from agribusiness to financial services as the focus for private equity from 2015 to 2017. Is this a trend that we can expect to continue? The recent introduction of interest rate caps in the banking sector in Kenya, along with the introduction of IFRS 9 reporting standards can affect the earnings potential of banks. The previous ROE (return on equity) expectations were some of the incentives that attracted investors in the industry. Investors are monitoring the sector before placing long term commitments however there is no doubt there has been an impact. For investors still keen on the financial services sector, the focus is on the insurance market which while underpenetrated, presents opportunities for growth capital investors. In 2018, for instance, we saw an AfricInvest-led consortium, acquire 14.3 per cent stake in listed insurer Britam through a PIPE deal. There are of course opportunities in the nascent fintech sector including applying components of digitalisation to the banking sector. With East African economies still agri-dependent, we anticipate that PE will continue to deploy investments in the sector. PE is looking at creating value upon pre-existing agri-businesses where opportunities abound across the entire agricultural chain. Moreover, we see the push by regional governments

towards on finished goods for exports as complementary to the strategy adopted by private capital on enhancing value in agribusinesses.

What challenges need to be addressed to further the advancement of venture capital? The region’s venture capital sector is still very nascent with few players supporting the regional ecosystem and local funds still relatively preferring the less-risky SME and mid-space. Even with the growth of entrepreneurship in the region, there appears to be a disconnect between opportunities and funding, and particularly relative to the PE space where funding is more abundant. Creating awareness on early stage investing is one of the steps EAVCA is undertaking; to build the profile of the venture capital sector in the region and increase access for local businesses to venture capital financing. We see this as ultimately benefitting the entire sector as VCs investing in small-scale enterprises will hopefully exit to PE funds, generating further deal opportunities.

Are there any sectors that represent a unique opportunity for 2018? East Africa’s leading position in mobile money penetration has cast a spotlight on the emerging fintech sector, and the opportunities in that space. With the region’s largely unbanked and lowincome population, fintech has created opportunities for mobile based on lending to both businesses and retail customers. It has also advanced the payments industry, where, in countries such as Kenya, mobile payments surpass use of cards.

What is the primary source of capital for private equity funds and how has this changed in recent years? Based on EAVCA’s last survey, DFIs


and other bilateral agencies remain the top contributors in private equity for East Africa. Still, the local pension funds market has been proactive in investing in private equity with uptake by the local market increasing in 2018. Currently about $30 million is invested by the East African pension schemes with PE funds.

SMEs have traditionally had difficulty in accessing finance, what role does venture capital play in filling this financing gap? As an early-stage financier, venture capital creates the foundation for building a sound business, by providing the patient capital that enables the SME to grow their business operations and input the relevant structures needed to scale. Today, we see venture capital that goes beyond the business financing, to include credit financing, LPO financing, and even providing working capital. This de-risks the SMEs significantly, while providing financial track record for starts, which will be necessary in future fundraising.

Are there any specific problems that SMEs need to address, such as improving governance, to enhance their viability for venture capital and private equity? I would not call them problems. SMEs and those seeking funding should see VC and PE as an opportunity to adopt the sound practices that these financiers will only seek to enhance where necessary. Governance is one area given many SMEs in East Africa are family owned; another area is books and records where typically these are not appropriately maintained. Generally, if there is a strong motivation to partner with a VC/ PE fund, these challenges can be overcome.

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Prior to its investment in Mozambique, Fura Gems has had previous experience operating an emerald mine in Colombia.

Rocky wealth Banker Africa sat down with Dev Shetty, President and CEO of Fura Gems, about the company’s expansion plans into the Mozambican precious stone market


escribe Fura Gems production process.

As we are an earlystage mining company in Mozambique we have not got into full-fledged production yet. We are in the early stages of exploration. In July 2017, a systematic exploration method was employed over the whole area to get a better understanding of its primary and secondary ruby occurrences/potential. This work includes satellite image interpretation, lineament analysis, detailed lithological and structural mapping, and soil geochemical sampling. Based on the above studies and geological/geophysical and geomorphological interpretation, A series of potential exploration blocks (21) were identified and an Auger Drilling programme was initiated in these four licences in large grid pattern. The main idea of auger drilling is to get data on the depth and thickness of the gravel bed, the thickness of the over

burden and the basement geology. This will be followed by core drilling in areas where we encounter amphibolites rocks with primary mineralisation. This data will also help in identifying the areas for mining by bulk sampling which will determine the actual potential of the area.

What is the state of the regulatory landscape in the African countries in which you operate? We currently operate our exploration activities in Mozambique under the Mining Law 20/2014 of 18 August 2014 (the New Mining Law) that came into force in Mozambique on 22 August 2014. This replaced the previous mining regime under Mining Law 14/2002 that was put into place into 26 June 2002.

How important are mining activities to the African economy? I have seen first-hand just how important the mining sector can be to any host economy. At my previous role at

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Gemfields plc, we had an emerald asset that became the highest tax contributor to Zambia, a country with an established and large mineral economy. In terms of rubies, according to the Gemological Institute of America (GIA), Mozambican rubies currently account for approximately 50 per cent of the world’s ruby production. The ruby industry in Mozambique is a relatively young sector but it is already making significant contributions to the country via tax revenues, local job creation and direct and indirect financial revenues. The ruby deposits in Mozambique are also considered to be the largest gemstone deposits found on the globe in recent decades. Mozambican ruby deposits are much older than Burmese ruby deposits (approximately 60 million years) which, prior to the discovery of Mozambican ruby deposits, had been the major supplier of rubies for centuries. Mining within the country will continue to


see a positive impact on the country’s economy, as Mozambique continues to be explored and mined for rubies.

Have you faced any supply chain issues in doing business in Africa? As we are still in the exploration phase of our activities in Mozambique, we have had no supply chain issues in the country.

What needs to be done to improve the image of the African mining sector? In order to improve the image of the mining sector in Africa global businesses need to see a stable fiscal and regulatory regime within the country of operation, in order to make long-term investment decisions.

What are your expansion plans?

Dev Shetty, President and CEO of Fura Gems

We only entered Mozambique in 2017 so our expansion plans are dependent on the exploration phase of our activities which are currently underway.

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Out-of-court company restructuring is permissible under the new law (CREDIT: XTOCK/ SHUTTERSTOCK).

Egypt parliament passes bankruptcy law The law is meant to complement Egypt’s new investment law


n late January, the Egyptian parliament approved the country’s first-ever bankruptcy law in a bid to encourage both local and foreign investment in Egypt. The new law aims to tackle the outdated bankruptcy procedures that the country had relied upon. Previously bankruptcy cases were decided on a caseby-case basis with no specific law, which could lead to long and difficult judicial proceedings. Furthermore, the new law limits punishments to a monetary fine— previously debtors had faced jail time. In a sector comment, Moody’s Investors Service said, “The new law is credit positive for banks because it will provide them with more options to deal with viable troubled companies, making loan workouts more flexible and faster. Additionally, the new bankruptcy law will speed up the liquidation of nonviable companies, which will increase recovery amounts.” The law allows for out-of-court company restructuring and permits

a standstill on creditors that allows a viable company to reorganise in a comparable manner to US Chapter 11 bankruptcy protection. “The new law will allow borrowers and creditors to reach restructuring solutions more swiftly, increasing recovery amounts and improving banks’ ability to deal with problem loans,” added Moody’s. “Egypt’s weak insolvency framework has been a drag on banks’ asset quality. Indeed, the country’s two largest banks, National Bank of Egypt SAE and Banque Misr SAE, have taken more than 10 years to recover from legacy problem loans and reduce their aggregate ratio of nonperforming loans to gross loans to around two per cent as of June 2017 from more than 25 per cent a decade ago.” Egypt has struggled in many global indices, such as the Doing Business Report (dropping 18 places in the 2018 edition to 128 of 190) and Global Competitiveness Index. This new law should help improve this situation,

especially in rankings related to resolving insolvency—Egypt ranked 115 in this category in the World Bank’s 2018 Doing Business report. Moody’s noted that creditors in Egypt have on average recovered 26 cents for every dollar lent, in comparison to 71.2 cents in countries that are members of the Organisation for Economic Co-operation and Development (OECD). Furthermore, bankruptcy proceedings have been known to take an average of 2.5 years, although there is some evidence to suggest that time period may be longer, in comparison the bankruptcy duration is 1.7 years on average in OECD countries. The bankruptcy law was passed as a complement to the investment law, passed by Parliament late last year, in order to attract foreign investors and reduce bureaucracy. Both laws are part of a reform process to drive investment, something Egypt’s economy has been struggling with in recent years.

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Banker Africa – Southern Africa Banking Awards 2018 voting announced Voting has begun in the annual Banker Africa—Southern Africa Banking Awards


he annual Banker Africa—Southern Africa Awards is a programme open to all banks and financial institutions in the region. The aim of the Awards is to recognise outstanding performance and excellence in the financial services industry. Shortlists have been compiled by our group of experts. The Southern Africa Awards are designed to reward innovation and the ability to gain market share. As always the winners will be selected by the registered readers of CPI Financial products and services—in other words, your peers in the financial services industry.

POLLS HAVE OPENED Voting has opened for the Banker Africa—Southern Africa Banking Awards 2018 on Each shortlisted entry will be automatically linked to the institution’s own homepage online. In addition you may wish to read supporting material for the specific Award, where provided by the shortlisted institutions before casting your votes. Once voting closes, the results will be tallied and revealed in the subsequent edition of Banker Africa.

of their customers. They will, truly, be winners. In each of four regions, North Africa, East Africa, West Africa and Southern Africa, we hold separate Awards competitions. With this issue of Banker Africa we are launching the fourth Southern Africa Banking Awards, highlighting dozens of institutions across several key categories:

REWARDING EXCELLENCE The core philosophy of CPI Financial, the publisher of Banker Africa, is transparency, ensuring accurate reporting of economics and financial matters, the factors determining the future of the banking and finance community and the business deals driving the industry forward. Our Awards programmes are designed to reward and promote excellence and competition in the drive to set new standards in the industry in quality of service, best practice and financial performance. The financial institutions that win one or more of the Banker Africa Awards in 2018 and in future years will be those offering best-in-class services that meet the needs and exceed the expectations

Southern Africa Regional Awards Best Retail Bank Best Corporate Bank Best Commercial Bank Best Investment Bank Best Emerging Bank Best Islamic Offering Best Microfinance Bank South Africa Country Awards Best Retail Bank Best Corporate Bank Best Commercial Bank Best Investment Bank Mozambique Country Awards Most Improved Bank Technology Awards Best Mobile Security Technology

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long view

A new horizon Tony Long, CEO of CPI Financial, shares his thoughts on the future of banking


he future. It’s always interesting to imagine new possibilities and how things might change tomorrow, or many years ahead. Amidst considerable political, social and economic challenges, Africa has always been regarded as a continent with huge potential and the changes taking place currently are the foundations on which future prosperity depends. Change is a given throughout the world today, but nowhere is it more vital and necessary than where growing young populations require instant access to the digital resources that established markets take for granted. The challenges facing the banking industry globally, and particularly throughout Africa, where some of the youngest populations in the world are shaping the digital economy are hugely exciting, if not a little daunting for some.

Tony Long

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long view 65

As the disruption of technology continues to disintermediate traditional banking services across the world, the evolution of new products and services will depend as much on the visionary leadership of our most progressive banks, as the demands of clients and consumers. Innovation is completely our responsibility and our sole means of survival. There are two people in particular who have done more to drive true innovation than almost any others in the post-industrial age. As Henry Ford allegedly said, “If I had asked my customers what they wanted they would have said a faster horse”, and Steve Jobs went further in his belief that “It’s not the consumers job to know what they want”, when asked, “How much market research went into the iPad?” So, as we enter the fourth industrial revolution, it is encouraging that as banking systems across emerging and developing markets leapfrog the legacy infrastructures of established economies, new products, services and routes to market are continually being created as vast swathes of unbanked populations move into the new digital economy. Yet within all this frenetic development and disruption there is an even greater need to regulate a technology driven industry faced with all the challenges that rapidly advancing digital economies present. Fintech meet regtech. AI, robotics, blockchain, cryptocurrencies and cashless societies are simply the beginning of what will be an unrecognisable future much sooner than we think. These are the biggest challenges in the history, and to the future, of banking. Traditional banks are being threatened from all quarters in ways that have not been possible for the last 500 years and the agility with which

the industry is able to develop and respond to these opportunities and challenges will have a profound and lasting impact of the future of banking as we know it today. The media industry was one of the first to feel the full impact of the democratisation that the internet and digital technology has brought to people on a global scale, and publishers faced similar challenges to those which banks are facing today; how to stay relevant and add value in a market where barriers to access have got so low that everyone believes they can compete and new entrants are appearing from every direction.

Traditional banks are being threatened from all quarters in ways that have not been possible for the last 500 years. – Tony Long –

Needless to say, we’ve seen a lot of these businesses find out just how challenging it is to build new brands and establish trust with new customers and many have disappeared as quickly as they arrived. But some will survive and flourish as they find the right products and approach to consumers who are looking for a new relationship with their bank, and the future most certainly belong to those who are most able to adapt best (not necessarily fastest) to the changing dynamics of the

global economy and the local markets they serve. Our vision for CPI Financial is very straight forward. We have a singleminded approach to be the most respected financial media company in the region by adding tangible, unique value to the relationships we have with our clients and customers. We will develop our media brands in whichever way best serves our customers’ needs to become a more valued strategic partner as we seek to expand our reach and influence into new markets throughout Africa. There’s no doubt that we are all living truly digital lives these days and whilst we will continue to invest in developing the platforms and channels that our readers are using and moving towards, we also believe that print is far from dead. The question is, ‘what is the role for paper?’ There is certainly a new-found interest in print media, as witnessed by the recent resurgence in book publishing and the number of new authors that continue to launch their work in print as the lead medium, albeit often purchased online. For magazines, quality journalism, authority and integrity (along with the simple tactile pleasure of reading a magazine) will always attract readers who wish to reflect on what they are reading in a way in which the consumption of digital media is not always best suited. There is much to be excited about in the future for banking in Africa and the opportunities are there for all. As media-owners we have learned one simple truth; that we have to develop products that serve our customers in the way in which they wish to be served, when they want to be served, and where they want to be served. It’s not exactly rocket-science, but then once upon a time, neither was banking.

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World Bank Group President Jim Yong Kim and Penny Mordaunt, United Kingdom Secretary of State for the Department for International Development, visit primary school HLM 4C in the greater Dakar area in Senegal. Photo: World Bank / Marcia Juzga.


M&A in Sub Saharan Africa M&A in Sub Saharan Africa for 2017 dropped to its lowest in five years $60 billion



0 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Mergers and acquisitions in Sub Saharan Africa for 2017 dropped to its lowest level in five years. (CREDIT: THOMSON REUTERS/ATLAS/QUARTZ)

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12 Hawkamah Annual Conference th

April 30, 2018 - Dubai

Navigating Transformation and Disruptions: Overcoming Governance Challenges

Enabled by government support, technological innovations are disrupting traditional business models pushing boards and executives to re-think and transform their approaches to cope with such a dynamic landscape. Hawkamah’s 2018 conference will explore the impact that these transformations and disruptions will have on how companies are governed. How can organizations align their decision making to match the increasing speed of change? How can Boards of Directors drive transformation and foster innovation within their businesses? How can transformation and innovation be encouraged and monitored? Join us. Debate the future. Now.

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A scalable, world-class solution bringing ultimate efficiency to community banking enabling financial inclusion around the world. • Take advantage of a new technology to reach the unbanked populations. • Increase profitability through efficiency and growth. • Offer quality products and services to surpass community and conventional banking solutions


STP customer benefit from rapid growth


customers report commercial viability in less than half the time initially forecast


back office productivity increase reported by customers

To learn more visit our website to download the brochure

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#51 - March 2018  

This issue of Banker Africa features Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global. He discusses the growing Gulf-Afri...

#51 - March 2018  

This issue of Banker Africa features Jean-Claude Bastos De Morais, Founder and Group CEO, Quantum Global. He discusses the growing Gulf-Afri...