INTERNATIONAL EDITION
QUARTERLY EDITION • N° 113 • OCTOBER - NOVEMBER - DECEMBER 2020
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THE AFRICA REPORT
JEUNE AFRIQUE MEDIA GROUP
ZIMBABWE Team Mnangagwa circles the wagons GOLD BOOM How smugglers rip off Africa
NIGERIA (REALLY) HEADING?
500 million people and a trillion-dollar economy, or things fall apart
– 35-page special inside –
NIGERIA AT 60
FINANCE AFRICA’S TOP 200 BANKS face the Covid slump
N° 113 • OCTOBER-NOVEMBER-DECEMBER 2020
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WHERE IS
Atiku Abubakar Aliko Dangote Emmanuel Macron Yemi Osinbajo Abdul Samad Rabiu Bola Tinubu
Contributions by
Orange, a multi-service operator committed to Africa and its digital transformation Tunisia
Morocco
Egypt
Jordan
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Guinea Central African Republic
Guinea Bissau
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Ethiopia
Ivory Coast Liberia
Democratic
Cameroon
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Madagascar
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An innovation hub providing free support to young people: ■ ■ ■ ■
Technical training on innovative technologies Digital prototyping workshops Project incubation International acceleration for start-ups
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Brings you closer to what matters
EDITORIAL
TRADING POLITICS
At a high water mark for economic nationalism and global commerce battered by a pandemic, why would anyone want to run the World Trade Organisation (WTO)? That is what we asked the African candidates in the running for the director-general’s job at the WTO. With Kenya’s former foreign minister Amina Mohamed and Nigeria’s former finance minister Ngozi Okonjo-Iweala as front-running candidates, it’s not an academic conjecture. The winner is due to be announced by 7 November. Both Mohamed and Okonjo-Iweala, along with insisting that more women should be running top international organisations, argue that Africa’s position and interests could revitalise the deadlocked organisation, although both stress their international credentials and experience. With multilateralism in crisis, the WTO’s dispute mechanism has been blocked since the US started boycotting it last year, Africa is the only region of the world that is moving towards more inter-state cooperation. On 1 January, the African Continental Free Trade Area secretariat is to start operations in Accra. Although its scheduled launch this year has been delayed by the pandemic, its officials are now working out rules of origin and a schedule for ending most tariff and non-tariff trade barriers for the continent’s 1.1 billion people. Running the WTO for
the next eight years, the winner is eligible for two four-year terms, would be a critical platform for Africa to reposition itself in the world economy. As African markets expand, so will the continent’s economic leverage. Two priorities for reform at the WTO stand out if Africa is to make progress on its shift to building national production and diversifying from colonial trade ties. Both are gargantuan, but smart alliances across continental boundaries could produce positive results. Firstly, it must shame Europe, Japan and the US into cutting their costly agricultural subsidies, which have made Africa’s cotton, maize, rice, sugar and wheat uncompetitive. That was the project that stopped uber-energetic Pascal Lamy when he ran the WTO, but the economic and geopolitical stakes have grown even more urgent since then. As some incremental successes in 2015 show, a new generation of Asian investors in African agriculture are discovering the justice of this cause. At the same time, developed economies should drop escalating tariffs against processed and manufactured goods from Africa. It is a matter of debunking the hypocrisy of those Western capitals singing along with the 'trade not aid' chorus but doing little on the ground. The second area to push is the still more contested issue of the digital economy and intellectual property, dominated by the US’s mega-corporations. Their position is fiercely contested by Europe and China, again opening the possibilities of shrewd new alliances for Africa. That is already evident in a new working group on the matter in the WTO. After failing to agree on a new trade round in the past two decades amid a surge of bilateral trade deals, the WTO is at risk of becoming irrelevant for most of its 164 members. Electing an African head of the WTO would help ensure its survival as well as offer a timely boost to efforts to reset pandemic-hit economies.
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER R 2020
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49 NIGERIA AT 60 Nigeria celebrated six decades of independence on 1 October, and we look at where the country is heading for the next 60. We talked with vice-president Yemi Osinbajo and many other leading lights.
FEATURES 24 INVESTIGATION / The great gold rush While Covid-19 pushes gold sky-high as a safe haven, artisanal miners earn less than ever and smuggling, corruption and geopolitics rob Africa of tax revenue. The Africa Report investigates the deep, dark truth of the precious metal.
34 PROFILE / The Mnangagwa squad Three years after the military coup that propelled him to power, supporters of Zimbabwe’s Mnangagwa are having buyers’ remorse. We map the loyalists, oppositionists and foreign envoys who make up a fragmented landscape.
42 INTERVIEW / James Mwangi The man who raised Kenya’s Equity Bank and its shareholders from the gutter to the stars talks about inclusivity, globalisation and economic morality in the post-Covid era as he contemplates a philanthropic retirement.
Nigeria’s BUA Group signed a refinery deal in September, which will compete with billionaire Aliko Dangote’s mega-project.
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Our exclusive rankings show the calm before Covid-19 hit the financial sector.
116 TELECOMS DOSSIER Vodacom CEO Shameel Joosub talks about the challenges he faces when competing with global tech titans.
A trio of writers calls out presidents Ouattara and Condé for holding on to power.
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
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RISE FROM THE ASHES
It is shocking to learn of the fire that has gutted Makerere University's main administration building overnight. This institution, particularly the main building, is a symbol of Uganda, a landmark embedded in the history of East Africa. The immediate rush to discuss reconstruction rather than first being concerned about the cause of the fire and what has been lost, could be seen as a motive for criminality. Mysterious fires that target official records are nothing new in the last 30 years. That said, Makerere University must indeed rise in due course, and all efforts should be made to modernise its administrative functions. All the corruption infestation and the known sexual abuse practices against female students must also be seen as administrative evils to eliminate from the new Makerere – in God's name. Makerere oyee! Hussein Lumumba Amin Kampala, Uganda
EXAMPLES OF BROTHERHOOD
Nervana Mahmoud’s letter to Ethiopia [TAR web edition, 23 June 2020] was inspiring. I remembered being in Cairo in 1992 when an earthquake struck and Nigeria’s Simbiat Abiola quickly gave huge donations to help those affected. Such was an example of brotherhood between African nations. We should stress issues that unite us rather than those that divide us. I pray and hope Ethiopia will consider the humanity quantum involved in [the Grand Ethiopian Renaissance Dam] and give more concessions to Egypt on this matter. After all, we are all tenants on the surface of the earth. God bless Ethiopia, Sudan, Egypt and largely Africa! AbduLateef Omoniyi Sadiq
HOLD ADVISERS ACCOUNTABLE
I love the World Bank. Honestly, I do. I love my physician, too, as I love the pharmacos that manufacture life-saving drugs and my auto mechanic. But should my physician provide substandard care, I can sue her for malpractice. But what can we do with the vendors of policy advice like the World Bank, the IMF, etc.? We do not hold them to account for foisting empirically untested ideas and policy advice on poor and weak countries
when those policies cause enormous harm and destroy societies. The solution that I propose is a mechanism for holding the World Bank and all vendors of policy advice accountable for the outcomes of their advice. They should be sued should their advice make the country worse off. Kasirim Nwuke Ethiopia
ZIMBABWE'S ECONOMIC MISERY
The world should reflect on suicides in Zimbabwe
caused by poor economic conditions. It is heartbreaking that cases of suicides have reached alarming rates. Poverty has caused many women to resort to prostitution to earn money to look after their children. Some are ashamed of selling sex and commit suicide. Destitution has also caused many people to lose hope and the ZANU-PF government shows no sign of being able to stop the economy from decaying. Tapiwa Muskwe UK
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THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
Experience the Progress.
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SADIKOU OUKEDJO/COURTESY GALERIE CÉCILE FAKHOURY
Quarter
The Africa Report’s exclusive guide to the quarter ahead features key events from the worlds of politics, business and culture. Find out more about how to plan your October, November & December with our round-up of elections, conflict resolution efforts, key appointments in the world of business and international organisations, cultural highlights, and figures on how the continent is facing up to the Covid-19 health crisis and its effects. THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
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LUC GNAGO/REUTERS; ERICKY BONIPHACE/AFP; CELLOU BINANI/AFP
/ OCTOBER
ELECTIONS
Pandemic polls October’s Covid-era elections have something in common: strong incumbents using the pandemic and their power to limit the opposition’s ability to operate. In Tanzania, John ‘Bulldozer’ Magufuli is running for a second term, while in Côte d’Ivoire and Guinea Alassane Ouattara and Alpha Condé, respectively, are aiming for their third consecutive terms. In Côte d’Ivoire, while an exiled Guillaume Soro calls for a unified opposition, Henri Konan Bédié and Pascal Affi N’Guessan have the strongest chances in the first round but will split the vote
opposed to Ouattara. In Guinea, Condé again faces off against Celou Dalein Diallo, an effective mobiliser who has made the past two terms difficult for him. Meanwhile, in Tanzania, Chadema leader Tundu Lissu returned home after recovering from an assassination attempt and faced further intimidation from the government. Political transitions in all three countries have been fraught: Côte d’Ivoire experienced a civil war in 2010-2011 and Guinea’s most recent coup was in 2008, while Tanzania has never elected an opposition government since
SUDAN
Peace pacts The Sudanese transitional government under Prime Minister Abdalla Hamdok has a huge agenda for changes to implement after the downfall of Omar al-Bashir, who was deposed in a coup in April 2019. These include making peace with rebel factions, helping the reeling economy and reducing the impact of the military in politics and the economy (see page 24). The latter is extremely complicated, but the government is making progress negotiating peace deals with rebels, which are due to be signed in October. The Sudan Revolutionary Front, which represents armed groups from Darfur, South Kordofan and Blue Nile, is taking part in the talks, which are being brokered by the government of South Sudan. These peace efforts are part of the government’s drive to be removed from the United States’ list of sponsors of terrorism. The rebels distrust miltary leaders like Lieutenant General Mohamed Hamdan Dagalo, and military leaders would like to see the government have more international legitimacy, so there may be enough incentives all around to get a deal that works.
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the implementation of multi-party democratic elections. The three governments want to hold polls despite the Covid-19 crisis and are using public health measures to prohibit protests. In Guinea and Côte d’Ivoire, civil society actors are incensed by attempts to circumvent the two-term limits in the constitution (see Last Word). Magufuli is outspoken about his belief that the coronavirus is not a threat to Tanzania; Guinea and Côte d’Ivoire have so far avoided major outbreaks. But the economic growth of all three economies have slowed due to measures to fight Covid-19 and the disease’s impact on global economic activity.
APPOINTMENT
MITFORD MUNDELL Mundell brings his years of experience working with Harmony Gold, De Beers and Anglo American to the Africa team at Australia-based Theta Gold Mines. He will be CEO for Africa, with Theta’s flagship and other mines located in South Africa.
ALL RIGHTS RESERVED
Q4
Clockwise from left: Ouattara, Magufuli and Condé all want elections to go ahead
Q4
/ OCTOBER
$4.3bn
The IMF bailed out South Africa – home to the continent’s worse Covid-19 outbreak – in July. It is expecting to see major commitments to reform in the October mid-term budget.
EVENTS Most of the Africa-focused events that are still taking place are now doing so in the virtual realm, while others have been cancelled or postponed.
BOOK Commonwealth Short Story Prize and Kwame? Manuscrupt Prize winner Jennifer Nansubuga Makumbi’s new novel is a gripping and imaginative tale of a young girl, Kirabo, finding her voice under the dictatorship of Idi Amin. Incorporating folklore in her fiction, the Ugandan author told media that she was inspired for this feminist coming-of-age tale by the idea that “stories have such power you cannot imagine” – both the stories that define us and the stories we tell to redefine ourselves.
FOOD SECURITY
Africa Fintech Summit
Warnings for East Africa
Nigeria Mining Week
East Africa’s Intergovernmental Authority on Development (IGAD) warns that, while the world is focused on the Covid-19 pandemic, the region is heading for a potentially devastating period of low food production amidst already high levels of malnutrition. Poor rains are predicted for October to December, which adds to the impact of 2020’s floods, locust invasions and Covid-19. Last year, the region had about 28 million severely food-insecure people, and IGAD estimates that at least $3.4bn is needed to support nutrition and livelihood programmes.
The summit was originally planned for 16-17 October in Washington DC but now will be held virtually on 9, 10 and 12 November to talk about financial innovation on the continent. From 12-16 October, those interested in Nigeria’s non-oil natural resources will convene on the internet to discuss the prospects for gold, iron and other key raw materials in Africa’s most populous economy.
European Union-African Union Summit
North Darfur
Those looking to reshape the relationship between the continent and Brussels will have to wait until next year, as the October conference has now been pushed back to 2021 due to the Covid-19 crisis.
South Darfur
Africa Energy Forum
Khartoum
YEMEN
SUDAN
Gulf of Aden Addis Ababa
SOUTH SUDAN
It will take place digitally from 20 October to 13 November to discuss the ‘fifth industrial revolution’ and its implications in the energy sector for African economies.
ETHIOPIA Juba
PRESIDENT CYRIL RAMAPHOSA announced that international travel to and from South Africa would resume on 1 October as the country’s lockdown moved down to Level 1.
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Kampala
Mogadishu
KENYA
UGANDA
‘This move recognises that there is sufficient capacity in our health system to manage the current need’
SOMALIA
Indian Ocean
Nairobi
RWANDA Bujumbura 1000 km
ACUTE FOOD INSECURITY PHASE Presence countries Remote monitoring countries
minimal minimal
stressed stressed
crisis crisis
Would likely be at least one phase worse without current or programmed humanitarian assistance Concentrations of displaced people.
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
emergency
Not mapped
/ NOVEMBER Mohamed Hussein Roble (L) was sworn in as prime minister in September
SADAK MOHAMED/ANADOLU AGENCY/AFP
Q4 SOMALIA
Progress derailed and delayed In 2017, President Mohamed ‘Farmaajo’ Abdullahi Mohamed swept into power on a wave of ‘Make Somalia Great Again’ fervour that crashed into the continuing Al-Shabaab rebellion, chronic food insecurity, the reliance of the government on external powers, political infighting and now the Covid-19 crisis. The big milestone for this year was due to be Somalia’s first one-person, one-vote election. That will not now be possible this year or the next. Long-serving prime minister Hassan Ali Khaire was sacked in a July vote of no confidence. In September he was replaced by political neophyte Mohamed Hussein Roble because the government had not yet formulated plans for elections now due to be held in February 2021. Parliament’s term will normally expire in November and Farmaajo’s first term will end in February. Next year’s elections are set to be like the previous ones: 27,775 delegates – made up of politicians and clan elders – will choose representatives who will then cast a vote for the country’s leader. Security remains a major concern, as the government has not been able to put an end to the rebellion led by the Islamist fighters of Al-Shabaab – even with the support of regional governments, the African Union (AU) and the United States. The departure of the AU’s peacekeeping mission has again been delayed, this time until elections can be held in February. Its goal is to hand over to local security forces, but a comprehensive security strategy needs the buy-in of both the federal and regional governments, which continue to be at odds on many matters. Some voices in Washington are calling for peace talks with the rebel forces, but others point out that talks with the Taliban to resolve a similarly grinding conflict in Afghanistan have yet to show that they will deliver lasting peace.
‘About 50% of the institutions are on a trajectory towards reopening’ GEORGE MAGOHA
FOOTBALL African football fans can rejoice as qualifiers for the 2021 African Nations Championship will begin in November. Cameroon is due to host after failing to deliver for the 2018 tournament.
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In September, Kenya’s education cabinet secretary announced the phased reopening of schools beginning in November to allow students in exam years to return to class. But he said he was not impressed by the readiness of most vocational education schools.
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
54m
Egypt’s House of Representatives election in November could add to the number of Egyptians who face prosecution for not voting – casting a ballot is required by law. The country broke a record for the number of defendants in a single case in August by seeking to punish the 54 million people of voting age who did not vote in the upper house polls held that month. The government of President Abdel Fattah al-Sisi has also been cracking down on the opposition and civil society.
Africa’s Global Bank With operations in 20 African countries, the United Kingdom, the United States and France, United Bank for Africa (UBA) is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.
Q4
/ NOVEMBER
REFERENDUM
‘New Algeria’, yay or nay? One of the first big political tests of the Abdelmadjid Tebboune presidency in Algeria is the 1 November national vote on a new constitution for ‘La Nouvelle Algérie’ that turns a page on the corruption, nepotism and public alienation of former president Abdelaziz Bouteflika’s regime. It does not have many of the measures that the Hirak protesters, who got Bouteflika deposed, would like, but it is still likely to pass. Some of those critical of the new fundamental law point out the irony in Tebboune’s plans to inaugurate the Great Algiers Mosque on the same day – a $1.5bn example of wasteful spending pushed through by his predecessor. The recent trial of former parliamentarian Baha Eddine Tliba has highlighted the rot that set in under decades of the former regime, and so turning a page will not be quite as simple as a vote for change.
The South Africa-focused airline, which declared bankruptcy amidst the pandemic, will not meet its target of restarting operations by November. It is implementing restructuring and fundraising to cut staff and aircraft in order to be on a more sustainable footing next year.
HAJRA KARRIM
SADIKOU OUKEDJO/COURTESY GALERIE CÉCILE FAKHOURY
On 1 November, Karrim will start as fishing company Oceana Group’s new chief financial officer. Her previous experience includes stints in the same position at TransUnion Africa Group and M-Net.
ART
Stasis and reflection With a striking use of colour and works that question humanity’s place in the world, Togo-born and Abidjan-based artist Sadikou Oukpedjo has his solo exhibition ‘Stasis’ at Dakar’s Galérie Cécile Fakhoury from 26 September to 20 November. Common themes in his art – which is also displayed at the state-backed Palais de Lomé cultural centre that opened in the Togolese capital late last year – include man’s animal nature and his use of violence.
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‘Rural food insecurity is expected to peak between November 2020 and January 2021’ SADC REPORT The Southern Africa regional organisation warns that more than 45 million people could be food insecure during the upcoming lean season.
20m
The Africa Centres for Disease Control and Prevention has announced a target of 20 million lab tests for Covid-19 by November as part of the African Union’s Africa Against Covid-19 campaign. Africa CDC director John Nkengasong said the organisation would also provide 2m antigen tests with results back in 30 minutes, enabling track and trace.
ALL RIGHTS RESERVED
APPOINTMENT
E2 PROFIT HUNTER A different animal for a different world • Rightsize your fleet • Match capacity with demand • Rebuild business profitability • Achieve true sustainability #E2ProfitHunter E2ProfitHunter.com
/ DECEMBER
BOOK Harvard sociologist Danilo Mandic’s new book comes at a crucial time, as organised crime networks adapt to the Covid-19 era and also get in on corrupt supply deals with governments. Criminal networks are key to Somali rebels’ ability to make improvised explosive devices and for Sahelian groups to smuggle goods. Mandic takes examples from around the globe to demonstrate how this is a governance challenge that will continue to influence politics and security in the years ahead.
‘The Nairobi CBD is undergoing a face lift […]. By December this will be a new town’ MOHAMMED BADI Nairobi Metropolitan Services director said that ongoing water, sanitation and streetcleaning operations will have a major impact on quality of life in the Kenyan capital. The clean-up has included collecting 250 tonnes of rubbish from Burma Market and Muthurwa and sinking 93 boreholes in 100 days.
2.3m
South African land reform – one of President Ramaphosa’s key commitments – should take a step forward in December when the national assembly produces a new report on issues including expropriation. In the most recent data, from 2016, 2.3m households were involved in agriculture, down from 2.9m in 2011.
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CHRIS WILLIAMSON/GETTY IMAGES; FRANCIS KOKOROKO FOR TAR
Q4
Nana Akufo-Addo (L) and John Mahama (R) go head to head again in December
ELECTIONS
Ghana votes The December 2020 election is a rematch of the 2016 vote, with the New Patriotic Party (NPP)’s Nana Akufo-Addo now the incumbent and the National Democratic Congress (NDC)’s John Mahama as the challenger. Management of the economy, corruption, education and the Covid-19 crisis will be big themes as the candidates canvass for votes. Akufo-Addo remains the frontrunner, as, despite big promises for his campaign, Mahama has not scored many major victories in opposition.
Education The NPP has rolled out its free secondary high school education programme, and the NDC is promising to go a step further, extending it to private schools. Both parties are promising to reform student aid and loan programmes for university students.
Economy Headline projects with big numbers are commonplace in Ghanaian campaigning. The NDC manifesto says it will create 1m new and sustainable jobs within the next four years. The NPP’s focus is creating and supporting economic hubs and clusters in digital and other domains.
Health Covid-19 has put healthcare in the spotlight. The NDC is pushing for free primary healthcare, but it is not yet clear where the funding would come from. Meanwhile, the NPP says it will stengthen the national health insurance programme and make huge investments including the construction of at least 101 new 100-bed hospitals.
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
ADVERTORIAL
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The year 2019 was one of a clear recovery for the African banking sector, with Nigerian, Moroccan and South African banks reaping the benefits of a favourable economic context. A momentum that has been broken by the Covid-19 pandemic, whose effects will only be seen next year
ADOBESTOCK
The calm before Covid
By PIERRE-OLIVIER ROUAUD
Continental vulnerability
Angola in 2019 remained mired in a deep crisis borne of the oil-price shock of 2015 and governance problems. Assets declined for all 11 financial institutions in the ranking, starting with the national leader Banco Angolano de Investimentos (#48), which dropped nine places. The global trade war, however, has caused fragility. In December 2019, before the health crisis, the ratings agency Moody’s said it was concerned about the vulnerability of the sector and downgraded its rating from stable to negative.
96
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
$1.49trn
$1.46trn
$1.74trn
$1.61trn
$1.76trn
2015
2016
2017
2018
2019
TOP FIVE FOR ASSET GROWTH %
2019 assets ($bn)
+102 +70
4.84 NIC BANK Kenya
+59
1.30
17.29
DEVELOPMENT ACCESS BANK OF BANK NIGERIA NIGERIA Nigeria Nigeria
+47
+46
1.41
1.96
BANQUE NATIONALE D’INVEST. Côte d’Ivoire
WEMA BANK Nigeria
TOP FIVE FOR ASSET DECLINE %
SOURCE: THE AFRICA REPORT
The year 2019 brought consolidation, or even a real recovery, for the African banking sector – a trend that initially looked set to continue this year. The favourable economic context had made many forget the strong financial and monetary turbulence of the past years, particularly in Egypt, Nigeria and South Africa. The Covid-19 global health crisis has upended all of that. It has dashed hopes for a revival of the sector, as shown by the first half-year results of 2020, which fell sharply for many financial institutions. Our exclusive ranking of the Top 200 African banks for the year 2019 does not show any signs of this historic crisis, whose effects promise to be both painful and long-lasting. Last year, Africa as a whole experienced a 3.9% increase in its gross domestic product, according to the African Development Bank. This growth is reflected in our ranking. The Top 200 banks on the continent recorded an 8.8% increase in their balance sheets in 2019. In addition, their net banking income rose by a spectacular 16.7% to more than $81.6bn – an unprecedented level. This was a significant recovery, which, in addition to monetary factors, also reflected an increase in business activity and credit in many parts of the continent. In 2019, in the Union Economique et Monétaire Ouest Africaine, credit to customers of the 150 institutions in the zone grew by 10.1%, according to the regional central bank. The increase was 22.4% for medium-term loans, a sign of the dynamism of business and household investment in West Africa. In South Africa, the continent’s most financialised economy (and home to six players in the top 10 of our ranking), total banking sector assets grew by 8.6% in 2019 and outstanding loans rose by 7.8%, according to data from the South African Reserve Bank. In Morocco, loans were also up 5.3% at the end of 2019, according to Bank AlMaghrib, despite a still rather sluggish real-estate sector. The Communauté Economique et Monétaire de l’Afrique Centrale zone remained on the sidelines of this recovery, with total credit to the economy down 3.6% last year to 7.8trn CFA francs ($13.9bn), according to the regional central bank. Gabon’s BGFIBank (#54), the leader in the zone, saw its balance sheet fall slightly.
TOTAL ASSETS BREAKDOWN
North Africa West Africa Central Africa East Africa Southern Africa
2019 assets ($bn)
BANCO BANCO DE BANCO DE BANCO POUPANÇA MILLENNIUM FOMENTO ANGOLANO DE BANCO E CRÉDITO ATLÂNTICO ANGOLA INVESTIMENTOS BIC Angola Angola Angola Angola Angola
4.15 -33
3.28
4.50
6.06
3.57
-25
-18
-17
-15
In our ranking, as in previous years, five countries dominate: South Africa, Egypt, Algeria, Morocco and Nigeria. Taken together, the banks of these countries account for 72 of the Top 200 and represent nearly 79% of the balance sheet total. The undisputed continental leader remains the South African Standard Bank Group (#1), despite setbacks with its London subsidiary. In the top 20, the Nigerian leader Access Bank Group (#19) reported a 44% increase in its balance sheet. This leap, which translates into a six-place jump in the ranking, follows the acquisition of Diamond Bank last year. The country’s 17 banks in the ranking all experienced an increase in their balance sheets. The same was true of the nine Moroccan banks, with the heavyweight Attijariwafa Bank (#7) in the lead. From its base in Togo, Ecobank Transnational (#17), whose balance sheet increased by 5%, remains the leading operator in the CFA franc zone.
TOTAL LOANS ($bn) North Africa West Africa Central Africa East Africa Southern Africa
500
TOP 10 MOST PROFITABLE BANKS Standard Bank Group
400
FirstRand Banking Group $2.09bn
300
South Africa
200
National Bank of Egypt
100
$1.26bn
Egypt
0
2015
2016
2017
2018
2019
AFRICA’S DEPOSITS ($bn)
500
Standard Bank of South Africa $1.2bn South Africa
Nedbank Group $889m South Africa
400
Commercial International Bank $735m
300
Egypt
200
Attijariwafa Bank
$716m
Morocco
100 0
50
$2.17bn
South Africa
2015
2016
2017
2018
2019
TOTAL NET INTEREST INCOME BREAKDOWN ($bn)
Zenith Bank
Nigeria
$572m
ABSA Bank
$561m
South Africa
40
Guaranty Trust Bank $539m
30
Nigeria
20 10
30
0
2015
2016
2017
2018
2019
NUMBER OF BANKS
25
9 51
50
33
TOTAL PROFITS ($bn)
57
22.4
21.6
2015
2016
24.9
25.2
2017
2018
2019
20 2014
From a strategic standpoint, in addition to the strengthening of capital ratios (Basel I, II and even III for the most advanced countries), 2019 was marked by continued digitalisation. According to a European Investment Bank survey published in February 2020, more than 82% of African banks have deployed or are in the process of deploying e-banking or mobile-banking solutions. Another trend is that international banks are continuing their gradual or targeted disengagement from the continent, albeit with fewer huge operations like the continental withdrawal of Barclay’s, which was completed in 2018. In this context, one of our heavyweights, the Moroccan group Banque Centrale Populaire (#9), finalised the purchase of the Banque de Madagascar et de l’Océan Indien from France’s BPCE in October 2019. But the 2020s and beyond in a post-Covid world could lead to a recomposition of the African financial sector on a completely different scale.
21.5
25.2
Methodology We compiled our ranking of Africa’s Top 200 banks by sending out detailed questionnaires to more than 1,300 financial institutions spread across the continent. Their replies were used to create a systematic ranking of Africa’s top banks based on total asset size. Our list features only the top 200 banks. All data is communicated to us by the banks or their parent companies. These figures relate to the 2019 financial year. Where that information was unavailable we used 2018 figures, indicated in the rankings by italics. Banks are removed from the list if they do not supply data during two consecutive years. The data was converted to US$ using the exchange rates applicable on 31 December 2019. Numbers in the ‘Rank 2019’ column refer to a bank’s position in The Africa Report’s ranking of September 2019.
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
97
‘SMEs are […] among the reasons Ecobank Transnational was formed.’ ADE AYEYEMI Group CEO, Ecobank Transnational Inc.(#17)
Rank 2020
Rank 2019
Diff.
1
1
2
2
3 4
Total assets
Net interest income
Loans
Deposits
South Africa
161 839 890
7 855 986
83 997 485
94 231 226
South Africa
118 702 054
6 692 890
81 279 136
99 077 556
Bank
Country
0
Standard Bank Group
0
Firstrand Banking Group
3
0
Standard Bank of South Africa
South Africa
105 310 656
5 085 293
72 986 331
84 259 278
4
0
National Bank of Egypt
Egypt
100 439 780
11 448 951
31 996 986
72 845 940
5
5
0
Absa Bank
South Africa
82 486 754
3 323 082
56 496 448
48 205 776
6
6
0
Nedbank Group
South Africa
81 314 981
3 558 489
56 670 763
64 319 648
7
7
0
Attijariwafa Bank
Morocco
54 889 933
2 419 105
3 336 941
34 584 534
8
8
0
Banque Misr*
Egypt
49 313 264
339 156
12 326 957
37 349 872
9
9
0
Banque Centrale Populaire
Morocco
44 462 996
1 836 122
26 685 286
31 904 492
10
10
0
Investec Group Ltd
South Africa
38 118 186
636 026
19 682 744
26 737 422
11
12
+1
Rand Merchant Bank
South Africa
37 265 173
ND
ND
ND
12
11
-1
BMCE Bank of Africa
Morocco
32 541 113
1 428 474
19 235 695
20 902 285
13
14
+1
First National Bank of South Africa
South Africa
29 805 112
ND
ND
ND
14
15
+1
Banque Nationale d’Algérie
Algeria
29 192 978
786 484
17 092 087
17 774 748
15
13
-2
Banque Extérieure d’Algérie
Algeria
27 273 407
1 038 423
18 291 908
17 979 805
16
18
+2
Commercial International Bank
Egypt
24 064 133
1 342 806
7 425 352
18 948 018
17
16
-1
Ecobank Transnational Inc.
Togo
23 641 184
1 622 259
9 276 608
16 246 120
18
17
-1
Commercial Bank of Ethiopia
Ethiopia
22 086 240
ND
2 134 176
16 788 024
19
25
+6
Access Bank Group
Nigeria
19 581 712
759 607
7 977 728
11 660 994
20
19
-1
Crédit Populaire d’Algérie*
Algeria
18 904 011
644 455
11 466 904
13 042 690
21
20
-1
Zenith Bank
Nigeria
17 390 448
731 665
11 678 672
6 317 248
22
32
+10
Access Bank Nigeria
Nigeria
17 292 253
637 763
6 799 649
10 051 251
23
22
-1
First Bank of Nigeria
Nigeria
16 997 661
795 186
5 075 606
11 014 351
24
23
-1
Qatar National Bank Alahli
Egypt
16 734 951
844 335
9 632 209
13 010 138
25
24
-1
Zenith Bank Nigeria
Nigeria
14 892 100
583 820
6 136 153
9 554 070
26
27
+1
United Bank for Africa Group
Nigeria
13 716 643
948 862
5 647 543
10 502 102
27
31
+4
28
28
0
29
30
30
33
31 32 33
36
+3
34
21
-13
35
37
36 37 38
38
0
39
48
+9
40
44
+4
MCB Group
Mauritius
12 514 044
537 213
6 030 193
8 702 371
Arab African International Bank
Egypt
12 017 451
378 151
4 330 042
9 083 651
+1
Crédit Agricole du Maroc
Morocco
11 956 282
419 789
8 651 568
8 152 975
+3
Soc. Gén. Marocaine de Banques
Morocco
11 486 942
511 178
9 007 390
6 735 181
34
+3
MCB
Mauritius
11 374 878
467 004
5 881 606
8 349 853
35
+3
United Bank for Africa Nigeria
Nigeria
11 333 991
413 337
4 119 261
7 574 423
Guaranty Trust Bank
Nigeria
10 299 437
633 935
4 111 567
6 939 161
WesBank
South Africa
9 832 624
ND
ND
ND
+2
Bank of Africa Group
Senegal
9 615 375
549 474
4 878 000
6 620 625
43
+7
Capitec Bank
South Africa
9 570 482
1 184 661
4 412 503
7 087 044
42
+5
KCB Group
Kenya
8 788 034
824 464
5 232 300
6 714 782
Banque de Développement Local*
Algeria
8 779 142
397 064
6 918 675
7 316 041
Kenya Commercial Bank
Kenya
8 609 950
500 756
4 819 799
6 064 823
CIH Bank
Morocco
7 743 339
257 842
5 472 209
4 594 341
2019 results in thousands of US dollars; *in italics 2018 results; ND: no data
100 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
EMMANUEL BOBBIE/ECOBANK
1-40
Atlantic Business International (#43) donated 200m CFA francs ($361,900) to Côte d’Ivoire’s Covid-19 Solidarity Fund.
41-80 Rank 2020
Rank 2019
Diff.
Bank
Country
Total assets
Net interest income
Loans
Deposits
41
40
-1
BMCI
Morocco
7 338 190
315 285
5 654 750
4 641 393
42
45
+3
SBM Bank Mauritius
Mauritius
6 918 242
250 815
2 905 575
5 295 989
43
46
+3
Atlantic Business International
Côte d'Ivoire
6 816 200
303 166
3 568 944
3 953 381
44
52
+8
Equity Bank Group
Kenya
6 588 610
439 934
3 583 783
4 721 315
45
59
+14
Bank of Alexandria
Egypt
6 482 972
374 093
2 601 320
5 442 127
46
50
+4
Al Barid Bank
Morocco
6 450 296
203 368
742 417
5 665 116
47
57
+10
Faisal Islamic Bank of Egypt
Egypt
6 220 137
ND
ND
ND
48
39
-9
Banco Angolano de Investimentos
Angola
6 063 584
441 276
1 408 265
4 684 274
49
58
+9
Ecobank Nigeria
Nigeria
5 932 641
455 021
ND
ND
50
49
-1
Crédit du Maroc
Morocco
5 851 596
240 802
4 288 319
5 353 890
51
60
+9
Banque Int. Arabe de Tunisie
Tunisia
5 829 473
341 556
3 708 285
4 639 078
52
64
+12
Fidelity Bank
Nigeria
5 792 461
227 571
3 087 909
3 357 084
53
51
-2
HSBC Bank Egypt*
Egypt
5 632 330
378 073
1 868 252
4 475 315
54
56
+2
BGFIBank Holding Corp.
Gabon
5 358 317
299 312
3 586 068
3 788 536
55
66
+11
Stanbic IBTC Chartered Bank
Nigeria
5 141 489
213 257
1 458 020
1 747 682
56
74
+18
Union Bank of Nigeria
Nigeria
5 129 913
143 905
1 508 680
2 428 361
57
70
+13
Equity Bank Kenya
Kenya
4 963 595
58 181
ND
3 722 307
58
127
+69
NIC Bank
Kenya
4 839 568
130 445
2 438 696
3 699 158
59
62
+3
Arab International Bank*
Egypt
4 729 576
99 613
961 472
3 317 048
60
80
+20
Banque Nationale Agricole
Tunisia
4 645 643
233 544
3 728 799
3 047 182
61
77
+16
Banque de l’Habitat de Tunisie
Tunisia
4 595 751
187 322
3 546 907
2 435 139
62
78
+16
First City Monument Bank
Nigeria
4 571 706
(208 175)
1 961 513
2 584 054
63
84
+21
Al Baraka Bank Egypt
Egypt
4 524 060
116 964
1 045 059
4 005 629
64
81
+17
Oragroup SA
Togo
4 504 718
251 117
2 336 212
3 116 530
65
55
-10
Banco de Fomento Angola
Angola
4 499 869
263 102
672 270
3 326 940
66
73
+7
Co-operative Bank of Kenya
Kenya
4 470 369
471 754
2 608 450
3 256 749
67
54
-13
Banco Economico*
Angola
4 367 166
ND
401 012
3 400 967
68
86
+18
Egyptian Gulf Bank
Egypt
4 255 836
121 318
1 451 082
3 487 733
69
47
-22
Banco de Poupança e Crédito
Angola
4 149 383
(31 469)
85 536
2 952 747
70
83
+13
Société Tunisienne de Banque
Tunisia
4 071 559
212 933
2 846 300
2 617 061
71
72
+1
National Bank of Kuwait – Egypt
Egypt
4 002 889
192 339
1 963 396
3 209 361
72
76
+4
Bank Audi Egypt*
Egypt
3 969 078
125 633
740 033
1 782 506
73
92
+19
Absa Bank Mauritius (ex-Barclays)
Mauritius
3 888 809
132 056
1 735 112
2 904 389
74
89
+15
Société Générale Côte d’Ivoire
Côte d’Ivoire
3 681 030
257 040
2 658 104
2 894 392
75
82
+7
Diamond Trust Bank Kenya
Kenya
3 777 331
249 882
1 947 094
2 740 228
AfrAsia Bank
Mauritius
3 715 040
98 099
588 309
3 484 894
Land Bank*
South Africa
3 624 923
83 494
3 078 344
ND
76
88
+12
77
75
-2
78
102
+24
Abu Dhabi Islamic Bank – Egypt
Egypt
3 716 305
193 545
ND
3 191 437
79
90
+11
Absa Bank Kenya (ex-Barclays)
Kenya
3 667 793
283 082
1 906 073
2 330 486
80
97
+17
Attijari Bank
Tunisia
3 571 709
192 315
2 232 582
2 520 985
2019 results in thousands of US dollars; *in italics 2018 results; ND: no data
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
101
Namibia’s Bank Windhoek (#98) reduced its primary lending rate by 0.25% – from 8% to 7.75% – in June 2020.
81-120 Rank 2020
Rank 2019
Diff.
Bank
Country
Total assets
Net interest income
Loans
Deposits
81
71
-10
Banco BIC
Angola
3 568 909
559 092
1 581 762
2 465 709
82
99
+17
Housing and Development Bank
Egypt
3 374 061
200 428
1 070 092
2 545 932
83
69
-14
Banco Millennium Atlântico
Angola
3 283 032
136 034
907 537
2 531 720
84
93
+9
Sterling Bank
Nigeria
3 240 557
240 032
1 695 326
2 445 888
85
104
+19
Suez Canal Bank
Egypt
3 236 978
77 519
956 637
2 749 436
86
95
+9
Amen Bank
Tunisia
3 216 504
140 325
2 044 872
1 980 075
HSBC Mauritius
Mauritius
3 200 309
58 034
1 352 000
1 952 300
Export Development Bank of Egypt
Egypt
3 163 305
112 214
1 561 949
2 493 717
87
87
0
88
109
+21
89
91
+2
Société Générale Algérie*
Algeria
3 150 388
184 085
2 155 653
2 452 034
90
94
+4
Crédit Agricole Egypt
Egypt
3 142 699
195 098
1 463 211
2 466 481
91
103
+12
First National Bank of Namibia
Namibia
3 139 221
115 897
2 154 789
2 552 223
92
98
+6
Stanbic Holdings
Kenya
2 969 449
130 541
1 494 546
1 899 494
93
101
+8
Standard Chartered Bank Kenya
Kenya
2 954 920
280 685
1 258 592
2 234 080
94
96
+2
Ahli United Bank Egypt
Egypt
2 941 374
ND
1 634 258
ND
95
105
+10
Banque Atlantique – Côte d’Ivoire
Côte d’Ivoire
2 881 126
123 197
1 487 404
1 865 672
96
106
+10
CRDB Bank
Tanzania
2 836 817
224 544
1 454 270
2 214 534
97
112
+15
National Microfinance Bank
Tanzania
2 819 086
222 586
1 546 146
2 116 580
98
107
+9
Bank Windhoek
Namibia
2 811 892
179 598
2 225 383
2 138 849
99
124
+25
Arab Tunisian Bank
Tunisia
2 776 671
96 639
1 919 483
1 868 154
100
114
+14
I&M Bank
Kenya
2 679 991
198 371
1 533 198
2 044 266
101
110
+9
Banco Comercial e de Investimentos Mozambique
2 629 841
236 996
997 693
2 019 850
102
100
-2
African Banking Corp. Holdings
Botswana
2 627 400
231 400
644 100
723 700
103
113
+10
Banco Int. de Moçambique
Mozambique
2 581 772
266 347
713 560
1 947 683
104
108
+4
Ecobank Côte d’Ivoire
Côte d’Ivoire
2 555 521
142 614
1 129 853
1 372 037
105
121
+16
Standard Bank Namibia
Namibia
2 504 273
184 578
1 621 436
1 816 263
106
118
+12
First National Bank of Botswana
Botswana
2 439 057
256 216
1 479 781
1 818 866
107
115
+8
Commercial Bank of Africa*
Kenya
2 392 243
206 918
1 185 873
1 918 111
108
116
+8
Standard Chartered Bank Mauritius
Mauritius
2 359 343
74 651
736 768
1 342 238
109
133
+24
Awash International Bank
Ethiopia
2 315 189
120 026
1 453 445
1 849 290
110
126
+16
Banque de Tunisie
Tunisia
2 282 615
131 292
1 611 522
1 351 289
111
119
+8
112
122
+10
113
120
114
123
115
144
+29
116
128
+12
117
117
0
118
129
119
135
120
125
+5
Gulf Bank Algeria
Algeria
2 201 434
140 669
1 284 635
1 542 884
BNP Paribas El Djazair*
Algeria
2 193 007
144 759
1 366 361
1 718 746
+7
GCB Bank
Ghana
2 191 339
204 444
627 732
1 630 874
+9
Ecobank Ghana*
Ghana
2 152 897
104 000
854 756
1 609 009
Rawbank
DRC
2 133 168
203 289
773 193
1 500 857
Union Internationale de Banques
Tunisia
2 250 150
149 558
1 962 813
1 774 706
Banque Al Baraka d’Algérie
Algeria
2 150 000
79 600
1 800 000
ND
+11
Coris Bank International
Burkina Faso
2 072 157
99 710
1 132 288
1 212 884
+16
Absa Ghana (ex-Barclays)
Ghana
2 059 842
137 005
714 279
899 854
African Bank
South Africa
2 054 301
ND
ND
ND
2019 results in thousands of US dollars; *in italics 2018 results; ND: no data
102 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
THE MIDDLE EAST’S BEST BANK FOR
CORPORATE RESPONSIBILITY
‘Over 60% of the loans restructured [in the context of the pandemic] have been to SMEs.’ ANNE JUUKO MD/CEO, Stanbic Bank Uganda (#133)
Rank 2020
Rank 2019
Diff.
Bank
Country
NSIA Banque Côte d’Ivoire
Côte d’Ivoire
2 041 386
Citibank Nigeria*
Nigeria
1 995 800
Total assets
Net interest income
Loans
Deposits
116 750
1 384 939
1 288 976
52 530
296 621
1 053 401
121
142
+21
122
130
+8
123
137
+14
Afriland First Bank
Cameroon
1 986 143
110 399
868 789
1 502 290
124
140
+16
Attijariwafa Bank Egypt
Egypt
1 969 082
ND
1 096 990
1 331 286
125
165
+40
Wema Bank
Nigeria
1 961 483
120 733
792 517
1 581 757
126
131
+5
BGFIBank Gabon
Gabon
1 934 436
108 942
1 268 921
1 578 465
127
146
+19
Standard Bank Mozambique
Mozambique
1 921 923
139 850
458 284
1 425 401
128
134
+6
Société Ivoirienne de Banque
Côte d’Ivoire
1 879 971
122 927
1 325 982
1 431 297
129
136
+7
CBAO Groupe Attijariwafa Bank
Senegal
1 879 251
143 568
1 317 635
1 575 050
130
138
+8
Union National Bank Egypt
Egypt
1 840 826
65 428
781 128
1 591 647
131
159
+28
Fidelity Bank Ghana
Ghana
1 838 581
161 028
438 123
913 805
132
61
-71
Bank of Khartoum*
Sudan
1 835 860
ND
ND
ND
133
158
+25
Stanbic Bank Uganda
Uganda
1 795 723
121 214
770 215
1 274 995
134
151
+17
Absa Bank Botswana (ex-Barclays)
Botswana
1 747 431
148 344
1 240 568
1 334 811
135
148
+13
Dashen Bank
Ethiopia
1 743 882
ND
1 003 993
1 387 276
136
143
+7
137
169
+32
138
145
+7
139
139
0
Banco Sol*
Angola
1 713 881
213 887
ND
1 307 399
Misr Iran Development Bank
Egypt
1 692 660
39 234
317 104
1 488 546
Société Générale Sénégal
Senegal
1 667 919
130 071
1 151 435
1 371 064
Investec Bank Mauritius
Mauritius
1 636 991
50 564
892 566
944 650
140
172
+32
Stanbic Bank Ghana
Ghana
1 621 216
93 064
690 535
1 181 977
141
154
+13
Bank of Africa – Benin
Benin
1 574 582
70 773
747 320
1 062 416
142
149
+7
Ecobank Burkina Faso*
Burkina Faso
1 558 669
73 776
696 780
1 220 641
143
150
+7
Société Générale Cameroun*
Cameroon
1 556 079
119 799
1 123 360
1 218 350
144
166
+22
Stanbic Bank Botswana
Botswana
1 522 958
63 286
799 267
1 278 144
145
171
+26
Banque de Dévelop. du Mali
Mali
1 519 932
63 357
702 273
973 453
146
153
+7
Banco de Desenvolv. de Angola*
Angola
1 506 084
267 720
309 253
15 583
147
161
+14
Bank of Africa – Burkina Faso
Burkina Faso
1 482 934
73 065
902 401
1 068 174
148
181
+33
Bank One
Mauritius
1 477 347
40 079
739 457
1 278 545
149
156
+7
BNP Paribas South Africa*
South Africa
1 473 206
3 974
129 515
908 096
150
152
+2
Standard Chartered Bank Botswana
Botswana
1 456 418
40 692
735 221
1 195 390
151
163
+12
Nedbank Namibia
Namibia
1 450 764
60 956
858 514
807 479
152
147
-5
Standard Bank Mauritius
Mauritius
1 446 356
46 797
227 004
1 211 097
153
195
+42
Banque Nat. d’Investissement
Côte d’Ivoire
1 409 818
60 746
656 035
1 319 024
154
187
+33
Banque Zitouna
Tunisia
1 404 166
60 835
1 119 542
1 202 066
155
176
+21
Bank of Baroda Kenya
Kenya
1 401 585
65 876
459 093
1 145 956
156
162
+6
Natixis Algérie
Algeria
1 371 784
81 736
637 065
1 036 247
157
174
+17
Standard Chartered Bank Ghana
Ghana
1 333 030
104 060
309 813
948 216
158
168
+10
BICEC*
Cameroon
1 306 489
90 283
775 301
1 051 773
159
-
-
Development Bank of Nigeria
Nigeria
1 299 755
102 927
279 205
ND
160
191
+31
Cooperative Bank of Oromia
Ethiopia
1 296 351
55 161
663 968
1 111 921
2019 results in thousands of US dollars; *in italics 2018 results; ND: no data
104 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
STAMBIC BANK
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Absa Bank Uganda (#193)’s assets in 2019 reached UGX3.4trn ($921m), making it the third-largest bank in the country.
161-200 Rank 2020
Rank 2019
Diff.
Bank
Country
Total assets
Net interest income
Loans
Deposits
161
170
+9
UBCI
Tunisia
1 275 163
91 466
917 490
869 227
162
160
-2
Standard Bank de Angola
Angola
1 242 786
80 708
187 584
885 976
163
183
+20
Calbank
Ghana
1 233 276
104 351
510 917
675 206
164
175
+11
Ecobank Sénégal*
Senegal
1 220 488
73 860
551 493
823 246
165
185
+20
Bank of Abyssinia
Ethiopia
1 215 984
102 366
558 360
806 520
166
-
-
Banque Commerciale du Congo
DRC
1 209 796
93 052
455 281
969 900
167
179
+12
Zenith Bank Ghana
Ghana
1 181 535
171 562
114 502
888 116
168
177
+9
BICICI*
Côte d’Ivoire
1 179 348
84 889
860 428
1 026 499
169
-
-
170
178
+8
Banco de Negocios Internacional
Angola
1 175 303
72 682
179 218
636 826
Banco Caixa Geral Totta de Angola
Angola
1 121 555
49 968
230 373
937 296
171
182
+11
National Bank of Kenya
Kenya
1 095 641
61 731
448 625
851 753
172 173
198
+26
United Bank
Ethiopia
1 102 329
ND
673 860
902 057
180
+7
Grindrod Bank
South Africa
1 091 092
9 284
527 458
850 390
174
192
+18
Mercantile Bank
South Africa
1 086 197
66 428
658 603
864 664
175
173
-2
Stanbic Bank Zambia
Zambia
1 085 929
123 791
390 347
753 726
176
197
+21
Prime Bank
Kenya
1 082 412
42 926
361 922
792 010
177
188
+11
SCB Cameroun*
Cameroon
1 078 081
84 696
568 809
923 881
178
196
+18
Bank of Kigali
Rwanda
1 059 839
106 695
705 126
668 407
179
189
+10
Ecobank Mali*
Mali
1 054 437
63 444
332 954
613 689
180
200
+20
FMB Capital Holdings
Malawi
1 052 252
105 117
394 978
681 391
181
190
+9
Ecobank Zimbabwe*
Zimbabwe
1 050 300
80 400
206 200
913 700
182
-
-
Trust Merchant Bank
DRC
1 048 000
68 000
361 000
868 000
183
-
-
NIB International Bank
Ethiopia
1 045 374
49 632
ND
ND
184
194
+10
Bank of Africa – Côte d’Ivoire
Côte d'Ivoire
1 040 533
60 491
548 091
658 177
185
-
-
Bank of Africa – Mali
Mali
987 265
54 814
479 552
605 944
186
-
-
Ecobank Bénin
Benin
987 146
47 879
431 870
674 753
187
-
-
Oromia International Bank
Ethiopia
985 794
74 277
475 345
695 908
188
-
-
Centenary Rural Development Bank
Uganda
963 096
181 761
468 801
683 269
189
-
-
Standard Chartered Bank Zimbabwe* Zimbabwe
948 050
69 637
139 235
806 644
190
-
-
Citibank NA Kenya
Kenya
944 457
51 685
258 035
610 829
191
-
-
Steward Bank*
Zimbabwe
940 866
24 852
55 046
751 330
192
-
-
Sasfin Bank*
South Africa
939 594
17 266
487 011
310 941
193
-
-
Absa Bank Uganda (ex-Barclays)
Uganda
925 079
109 331
360 241
588 867
194
-
-
Wegagen Bank
Ethiopia
924 396
ND
511 830
728 970
195
-
-
Bank of Africa – Sénégal
Senegal
914 616
51 474
456 885
585 636
196
-
-
Banco Comercial do Atlântico
Cabo Verde
888 241
34 970
514 889
801 597
197
-
-
Absa Bank Zambia (ex-Barclays)*
Zambia
867 705
65 923
353 211
710 509
198
-
-
African Banking Corp. Botswana
Botswana
856 700
50 100
606 300
662 500
199
-
-
National Bank of Commerce
Tanzania
855 851
82 100
423 141
645 895
200
-
-
Zambia National Commercial Bank
Zambia
851 989
114 144
345 185
705 321
2019 results in thousands of US dollars; *in italics 2018 results; ND: no data
106 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
PIC
After 18 months without a boss, the PIC got a new leader, Abel Sithole
PIC
No clear way forward for the PIC
Will new CEO Abel Sithole use pension fund money to shore up South Africa’s ailing parastatals or will it go to safer havens with higher returns? By OLIVIER HOLMEY South Africa’s Public Investment Corporation (PIC) is being pulled in different directions – by those calling for it to invest at home and those pushing it to seek returns abroad and at the same time by those brandishing capitalistic goals like higher returns and their ideological opponents who say that profit should not be the only aim. After 18 months without a boss, in May of this year Africa's largest fund manager got a new leader, Abel Sithole, from his post as head of the Government Employees Pension Fund (GEPF). Tightlipped about his plan for the mismanaged investor, Sithole is not well known by the South African public, with many people worried about the safety of the pensions of millions of workers, which the PIC manages. Back in 15 July 2019, the man with a grey beard appearing before a parliamentary commission of inquiry in Pretoria dressed in a blue sweater did not look like a powerful financier. Yet he was the head of the GEPF, there to speak about a high-profile case. The PIC, which
manages the nearly R2trn ($122.1bn) in assets held by the GEPF and other smaller funds, is accused of investing in transactions involving people close to former chief executive Dan Matjila and former president Jacob Zuma. During the over three-hour long hearing, Sithole was circumspect. While denouncing the opacity of the PIC, which did not consult the GEPF before deciding on controversial investments, he said that the management of the state-owned firm was innocent of wrongdoing. This testimony did not convince the commission of inquiry. In March, the commission sent a nearly 1,000page report to President Cyril Ramaphosa, denouncing “substantial impropriety at the PIC, poor and ineffective governance, inadequate oversight, confusion regarding the role and function of the board and its various sub-committees, victimisation of employees and a disregard for due process.” Will Sithole be able to turn things around? Questioned on TV following Sithole’s appointment, Reuel Khoza, PIC's chairman, proclaimed: “When national duty
THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
111
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THE GEPF’s 2019 PERFORMANCE
recently, as the playground of the corrupt: an opportunity for those in political power to wield their influence and benefit themselves and their cronies.” To stop corruption, the fund manager would have to base its strategy exclusively on financial considerations. Were the PIC to help Eskom, it would mean it had again “rolled over” to political pressure, Mostert says.
Listed equity Listed properties Capital market
Portfolio return Benchmark return
Money markets Total GEPF listed
What are Sithole’s intentions?
Africa equity
Mostert knows Sithole, who is a former public policy researcher, from their time together at business school. He Global bonds describes the PIC’s new boss as thoughtful, open-minded -10% -5% 0% 5% 10% 15% 20% 25% 30% and determined, praising his background as a former commissioner with the Financial Industry Regulatory calls, there are those amongst us who answer it, Authority and fund manager for the Metropolitan Group, knowing fully well that you could actually be plunging after studying mathematics and English at Lawrence yourself into a lion’s den.” University in Wisconsin and business administration For Sithole, the challenges are daunting. “The mistrust at the University of the Witwatersrand. “He has a and fear are high,” said Ramabu Motimele, a senior human background in corporates, which gives him a strong commercial sense; he has a background in academia, resources executive, about the atmosphere within the PIC last year. And in addition, the parliamentary committee which gives him extensive discernment; and he has a admitted in its report that it only dealt with some of the background in government, which gives him a sense of national objectives.” organisation’s questionable investments, leaving doubts about the management of the rest of its portfolio. Others are less complimentary. His past at the GEPF associates him with the mistakes of the Matjila era, PIC to help state-owned companies in crisis? according to Tahir Maepa, associate executive director With the coronavirus crisis and longstanding troubles at of the public service union Public Servants Association state-owned companies like South African Airways and (PSA): “When the wrongdoings were happening at the power company Eskom, there is debate on the role PIC PIC, he was there, and he acted as if he sees nothing, should play in South Africa. Covid-19 worsened a difficult hears nothing. I blame him for not exercising his fiduciary responsibility in holding the PIC responsible. So to take economic situation, causing the country’s gross domestic a man like that and put him there is a slap in the face.” product to shrink by 16.4% in the second quarter of 2020. Sithole has not spoken publicly since he took office. At a time when money is scarce, the huge sums of money managed by the PIC are attracting a lot of attention. Even During his hearing before the parliamentary commission though PIC is government-owned, the funds it manages of inquiry, he expressed his wish for the PIC to be less exposed to the vagaries of the South African economy include the pensions of retired civil servants. Should by investing more abroad. money in the GEPF serve the public interest by helping The composition of the PIC’s board of directors adds to save Eskom and other state-owed companies or should to the uncertainty, with the recent addition of some of the PIC simply seek out the biggest and safest returns it the biggest names in South African capitalism - Maria can get to make the pension fund grow? “We are in the worst economic situation in a century,” Ramos, a former CEO of Absa, and Reuel Khoza, former says Duma Gqubule, an economist and former member chairman of the board of Nedbank - as well as representof President Ramaphosa’s cabinet on the commission on atives of the PSA and the National Education, Health and Black Economic Empowerment. “There is Allied Workers’ Union. It is difficult to see these directors easily agreeing. no need to accumulate so much; it’s obscene the level of assets they have in a country One thing is certain, according to economist with such high levels of poverty. The PIC Gqubule: the PIC is too important for the can play a developmental role.” Including government to give its leaders carte blanche. by supporting Eskom, which has a debt Ramaphosa is expected to sign a law to make PIC is the burden of R450bn. it more independent, but he too has raised the manager of the nearly Morne Mostert, director of a research idea of the fund manager helping Eskom, for R2trn ($122.1bn) example. There are so many forces pulling institute at the University of Stellenbosch, in assets held by in different directions that make it tough for disagrees: “State-owned enterprises, including the GEPF and other the PIC, were correctly viewed, up to quite Sithole to craft a way forward. smaller funds SOURCE: PIC
Global equity
2trn
112 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
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The take-up drive
Insurers and reinsurers alike would like to see more government regulation in order to drive demand, which is slow to grow on the continent
By DAVID WHITEHOUSE Growth in Africa’s insurance sector is not what it could be. Africa’s top insurance company and top reinsurer – Sanlam and Africa Re, respectively – say that government regulation is needed to boost usage. Executives argue that insurance take-up should grow through compulsion – and that South Africa offers the best lessons on how to do it. About 75% of insurance premiums in South Africa are for life policies, with 25% for general insurance, says Junior Ngulube, vice chairman of Sanlam Pan Africa in Johannesburg. Those figures are roughly reversed for the rest of the continent, he says. Ngulube points to the highly developed private-sector retirement industry in South Africa. Off the back of this, he says, life insurance has come to be favoured. The role of retirement provision in South Africa can be emulated in other countries, he says. Governments need to create private-sector retirement policies, as this will give impetus both to insurance markets and the development of financial markets. This, in turn, Ngulube argues, would provide governments with
funding for infrastructure and create a pool of domestic capital. Such policies would “mobilise massive amounts of savings” and make it easier for foreigners to invest, he says. “Fully funded pensions would be very beneficial.” Corneille Karekezi, chief executive of Africa Re in Lagos, says that car insurance in South Africa offers a “textbook case” of how state intervention can work. The cost of third-party liability insurance is included in the price of petrol at the pump, with contributions managed by the Road Accident Fund (RAF).
Sanlam’s quest for growth Already the continent’s largest insurance company, Sanlam wants to get bigger. It completed its 2018 takeover of Morocco’s North and West Africa-focused Saham and is looking for new areas for growth. It is in talks with prospective partners in Egypt and Ethiopia, with which it hopes to extend its pan-African presence, says Junior Ngulube, vice chairman of Sanlam Pan Africa. “If we can find partners there we can support them – even without an equity stake,” Ngulube tells The Africa Report. “We have a partner we think we can work with” in Ethiopia. Ethiopia’s Prime Minister Abiy Ahmed has taken some first steps in liberalising
the economy. In 2019, Ethio Lease became the first foreign-owned company to get a financial services licence there. But foreign investment in banking and insurance is still not allowed. “We’ve been watching the liberalisation of other sectors,” such as telecoms, Ngulube says. “One can take an optimistic view that insurance will not be far behind.” According to Swiss Re, Egypt in 2018 had the lowest insurance penetration of any country surveyed except Pakistan, Bangladesh and Nigeria. Misr Insurance, the country’s largest general insurer, has been losing market share to new competitors, a sign that a shake-up is under way.
114 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
Sanlam operates in 33 African countries, as well as India, Lebanon and Malaysia. The company is in a race to expand into high-growth markets as prospects in South Africa worsen. Headline earnings for 2019 fell 18%, after the company said in September 2019 that a weak operating environment and low investor confidence were barriers to South African growth. Extending Sanlam’s partnership with South Africa-based telecoms giant MTN is also part of the company’s strategy. Mobile is “one of the most efficient distribution channels,” Ngulube says. “We would be keen to take it further.”
Sanlam is looking to expand into high-growth markets in Africa
Sonara oil refinery company in Cameroon in 2019, which cost about $600m. This was a huge liability for local reinsurers, he explains. “Two or three like that would be a disaster.” Such risks have to be shared with international reinsurers, he argues. In terms of extreme weather events, some risks are “definitely” becoming uninsurable, according to Karekezi. Risk models are based on the past, but the frequency and severity of severe weather events is increasing. The good news, he says, is that outside South Africa “the concentration of risk is very small.”
Extreme-weather products
MIKE HUTCHINGS/REUTERS
“The risks are for communities rather than formal firms,” he says, – and for companies, the capacity exists to cover them. The World Bank, governments and reinsurers such as Africa Re are working to develop extreme-weather products that are easy to administer. “It’s not really a problem of capacity but of the insurability of the risk.” Africa Re needs partners to develop products for companies such as those active in the agricultural supply chain and satellite information providers. “We need other people to come in and increase capacity” for risks such as floods, hailstorms, cyclones and drought, he says. It is “desirable” to raise African reinsurance Most African countries outside South Africa capacity – “but it may not be feasible due have strong prospects for life insurance to governance issues,” Karekezi says. Most growth, Ngulube says: the markets with the African reinsurers, he notes, are not listed and are owned by states. That means an absence greatest potential are Morocco, Côte d’Ivoire, Namibia, Kenya, Nigeria and Ethiopia. Per of international financial ratings and “very Africa Re has 28% low visibility” for possible investors. About head incomes are key. “It’s not easy, but that’s of locally registered where the potential lies.” half of the continent’s reinsurers are unable to reinsurance on the In Morocco, Ngulube says, Sanlam’s inincrease their capital, he says. “You can’t invest continent, but African tegration of Saham – which it purchased in due to shareholding structure and governance.” insurers do not have 2018 – has gone “very well.” Sanlam is helping Despite capacity constraints, Karekezi the combined capacity Saham, already strong in general insurance, for some risks. argues that reinsurance in Africa is “very to develop its life insurance presence. A profitable – more so than the world industry.” Ultimately, he says, “the problem is the demand, not the “digital factory” has helped to get a handle on claims and enabled agents in the field, he says. With the integration supply.” He cites the 2019 Idai cyclone in Mozambique. The amount of damage that was insured was probably complete, the focus is now on “extracting synergies”, some of which are starting to bear fruit. “That process below 1% – comparable with recent floods and landslides won’t happen in a few weeks.” in East Africa, Karekezi says. “The demand is missing. We can call it awareness.” Complex risks Morocco and Algeria, with international help, are The growing scale and complexity of Africa’s insurance developing mechanisms to force people to buy insurance against identified perils. In Morocco, insurers are industry raises the problem of whether the risks are fully reinsured. African reinsurers do not have the combined demanding higher premiums from people who already have some form of insurance to add these risks, which capacity for some risks, Karekezi says. Africa Re has almost 28% of locally registered reinsurance on the Karekezi calls a “very good idea.” This could be expanded continent. “Traditional” risks such as motor and health to health and agricultural insurance, he says. “This will create momentum. It must be compulsory.” are largely reinsured, he says, but there are large, complex risks for which this is not the case. That momentum cannot come from the industry alone: initiatives need to be government-led, Karekezi says. Karekezi points to the case of a government-owned dam in Tanzania which is not fully reinsured due to lack “Governments have more leverage. It’s not good to wait of capacity. He also cites the example of the fire at the until people want to buy.”
28%
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TELECOMS DOSSIER
Shameel
Joosub
INTERVIEW
‘The focus is beneficial for us’ 116 THEAFRICAREPORT / N° 113 / OCTOBER-NOVEMBER-DECEMBER 2020
Vodacom Group CEO Shameel Joosub in his offices in Johannesburg
South African telecom Vodacom is entering a new era, with veteran executive Shameel Joosub at the helm to take part in the transformations that the sector can spur. The Vodacom Group CEO tells The Africa Report about interest in Ethiopia, the impact of the US-China cold war and plans for M-Pesa By XOLISA PHILLIP in Johannesburg
HOLD THE LINE March 8, 1971 Born in Laudium, South Africa 1994 Got his first job at Vodacom
2009 Became CEO of Vodacom Spain 2012 Appointed CEO of Vodacom Group April 2020 Joined Vodafone’s executive committee
WALDO SWIEGERS/BLOOMBERG VIA GETTY
2000 Named to the Vodacom board
Vodacom chief executive Shameel Joosub has witnessed the evolution of the company from a homegrown success story to a major African telco. Now he is leading its push to become a ‘techco’ – a technology-focused telecommunications provider. He is preparing for the battle to stay ahead of rising competition from traditional peers and those further afield. Over the years, Vodacom has earned the top spot in South Africa with more than 40 million customers. Beyond South Africa, the group has a presence in Lesotho (1.7 million customers), Mozambique (7.7 million), Tanzania (15.5 million), the DRC (13.8 million) and Kenya through a stake in Safaricom (35.6 million). In each of these key markets, Vodacom is among the top three telcos, if not the market leader. In the year ended 31 March 2020, Vodacom group generated R90.1bn ($5.6bn) in revenue. South Africa contributed R69.5bn to the total. “We have fewer markets. We capitalise our markets properly. The focus […] is beneficial for us,”
Joosub says. “That’s worked in terms of growing our share. But now, if we don’t evolve…. Think of M-Pesa, if someone comes with a superapp, [they] can cannibalise the revenue,” he adds. He argues for pushing boundaries, creating opportunities and embracing innovation. This is reflected in the Vodacom group’s ambitions to leap from a telco to a techco, a move underpinned by big-data analytics and artificial intelligence. That, in turn, is informed by three principles: to build, to buy or to partner in the group’s respective markets. “[We are] looking for new revenue streams and new growth areas, and to be an ambidextrous organisation leverag[ing] off existing businesses while exploring new opportunities,” says Joosub. Vodacom is busy finalising its presentations, documents and submissions for a consortium bid to land Ethiopia’s first private telco licence (see page 120). Parent company Vodafone and Safaricom round off the consortium. The group wants “to ensure we put
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our best foot forward,” according to Joosub, who anticipates the process will culminate at the end of the calendar year. Ethiopia is a compelling market for Vodacom for a number of reasons, chief among them that it presents a rare greenfield opportunity. Few markets on the continent have just one mobile network operator or a state monopoly like Ethiopia does. “All the big operators [are] lining up to take part in that process,” he says.
Structural changes
Vodacom is ramping up its Africa strategy, and the group has changed its structure to align with its growth goals on the content and the performance of its Africa portfolio. Vodacom South Africa is to become a standalone entity overseen by managing director Balesh Sharma, the former CEO of Vodafone Idea and the erstwhile chief operating officer of Vodafone India, while Joosub takes on the role of CEO for Africa. “Where we would previously report into the region, the region’s now been incorporated into Vodacom. So Vodacom is the region for Africa,” he explains. Furthermore, the Vodacom group has taken over management of Vodafone Ghana, while
‘IT’S OUR JOB TO MAKE SURE CAPACITY IS THERE’ the company’s joint venture with Safaricom has acquired the M-Pesa brand (see box). Significantly, Joosub has gained a seat on parent company Vodafone’s executive committee. Creating the MD role in South Africa was both to prepare for succession and to free up the Vodacom Group CEO, who was “doing both roles.” “It gives me time to focus on new growth areas and new opportunities going forward in South Africa and our markets,” Joosub says. These include “financial services, digital lifestyle services, the internet of things [and] subsidiaries we’ve invested in.” “Vodafone group CEO Nick Read has been clear his focus area is pretty much Europe going forward and Africa,” adds Joosub. By joining the Vodafone executive committee, Joosub brings another voice to the table. This bears the possibility of introducing a different point of view to discussions – specifically an emerging
market perspective, notes the Vodacom Group CEO. At the other end, the move will enable Joosub to pick up on opportunities and new insights. “We now want to democratise data. It starts from our purpose: connecting for a better tomorrow,” he explains. Vodacom is working on other innovations, largely in African countries where the group has an operating presence. In Ghana, through its subsidiary Mezzanine, Vodacom has a few e-learning platforms. In Kenya, there is DigiFarm, through which the group aids women farmers. “We connect them with buyers, help them to grow, give them access to finance and to equipment – and cut out the middle man.”
Health platform
The technology used for DigiFarm is now in South Africa, where a similar initiative for women farmers has been established. “The same is being replicated in different markets across the continent – some where we are not even a mobile operator. That’s quite encouraging,” Joosub says. Mezzanine’s platforms extend to health. In South Africa, more than 3,000 clinics use the health platforms for stock management solutions. “Those solutions have been sold in Nigeria and different markets,” says Joosub. “We’ve got a vouchering platform [for distributing] food vouchers. We are doing that for some of the aid organisations in multiple countries.” The possibilities are nearly endless – provided there is adequate network coverage. “As a customer, when you press a button you don’t want to hear excuses for why it didn’t work. Right? It’s our job to make sure capacity is there.” In the DRC, Vodacom has completed a fibre co-build with Facebook. “As your data usage grows, you need more capacity
Man witdraws cash in Nairobi via M-Pesa, using his mobile phone
locally. But you need more capacity in undersea cables as well because you’re connecting into the broader world,” he explains.
Although Joosub sees opportunities throughout the continent, he is aware of the risks ahead. The plight of telecoms supplier Huawei, which faces sanctions by the United States that could cripple its ability to roll out 5G in Africa, remain in the front of his mind. Should the worst happen to Huawei, then that “will affect the telco sector in totality,” argues the Vodacom boss. For one thing, “you’ll have more supplier concentration. There aren’t many suppliers left in the telco world that are big. There are new ones, but they don’t have the same research and development standard, they don’t have the same capabilities. That will be the biggest concern for us,” says Joosub. Most operators have Huawei in their network in some shape or form. The other major suppliers are Nokia and Ericsson. ZTE, also a Chinese company, is an emerging player. “But you never know, it could carry similar risks. […] We’ve been engaging with the South African government, both as Vodacom and as an industry. They’re open to the discussion [and] aware of the risks,” he notes. In July, President Ramaphosa made his position on Huawei clear, calling the US-China standoff “an example of protectionism” and saying: “We support a company that is going to take our country and indeed the world to better technologies, and that is 5G. We cannot afford to have our economy held back by this fight.” “That view seems to be similar across Africa,” says Joosub. “But it’s important to have these continuous engagements as new developments happen in every one of our markets.”
DANIEL IRUNGU/EPA/MAXPPP
Huawei’s troubles
M-Pesa without borders Mobile-money and other financial services are key to Vodacom’s growth. Vodacom and Safaricom have concluded the acquisition of the M-Pesa platform and regained its control from Vodafone. Although Vodacom has a presence in 50 markets, mostly on the continent, as well as the UK, Singapore and France, M-Pesa is available in a handful of those jurisdictions. A combined 53 million customers deal with Vodacom and Safaricom through financial services in South Africa and M-Pesa, respectively. “When we look at what Alipay and WeChat have done in China, the benefits we have in M-Pesa, if we couple those two, that creates a clear direction going forward. There’s lots of opportunity there,” enthuses Vodacom Group CEO Shameel Joosub. There are oppor tunities to take M-Pesa
further and to grow the company’s ecosystems in its operating markets. However, the priority is first to enhance the level of sophistication on M-Pesa to achieve consistency across the group’s markets. Kenya is way ahead. Vodacom is investing heavily to ensure it can tap into cloud-based technology to improve its M-Pesa offering in its other markets to bring them in line with Kenya. “We are optimising capital expenditure […] to make sure the next M-Pesa platform – the capabilities that we’re delivering – are future-proof, and are more open,” Joosub says. Diego Gutierrez, Vodacom’s chief officer for international markets, says that before thinking about expansion to other markets the first priority is how to evolve M-Pesa. “The first important milestone is
to drive M-Pesa to a next-generation, cloudbased platform. If it’s a cloud-based, intelligent platform, that is ideal for the smartphone generation. That makes it more flexible when we [want] to expand to other markets,” he says. If M-Pesa evolves into a mobile app, “then anyone, in any country can download [it]. And we can set services in those countries,” he adds. Joosub explains: “When you create an open system, it becomes a true platform: when lots of people are creating innovation, then sell it through your platform. That comes to market in the form of mini-apps within [a] … superapp. That’s what we are working on.” South Africans will experience this new generation superapp early next year, when Vodacom takes it to market in a partnership with Alipay.
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ETHIOPIA
Opening up
Foreign investors are queuing up to invest in Ethiopia’s telecoms sector, which will soon bid adieu to the state monopoly. However, some of the rules of the road are not yet clear By LOZA SELESHIE and QUENTIN VELLUET The privatisation of the Ethiopian state’s monopoly on the telecoms sector – the last on the continent – is crucial to Prime Minister Abiy Ahmed’s liberalisation agenda and to attracting foreign investment as the country opens up. The government is preparing to sell a 40% stake in Ethio Telecom to investors and to issue two new telecoms licences, probably before the end of 2020. If those moves are successful, it should lead to billions of dollars of investment in the sector, a rapid drop in prices and competition to deliver speedy internet and other services. With a population of 109.2 million and increasing needs in information and communications technology (ICT), the country represents a huge and growing market for potential investors. The number of mobile users alone rose by 7.2 million, or 18%, between January 2019 and 2020, bringing the total to 46.8 million. There is a largely untapped market, a willing government and big demand, so what could go wrong? Many investors are not yet sure what to expect, and confusion ensued after recent reports from news outlets announcing the
18%
Rise in the number of mobile users in Ethiopia between January 2019 and 2020, resulting in 46.8 million users.
barring of foreign companies from participating in the infrastructure side of the telecoms market. When the liberalisation was announced, foreign operators including Orange, Vodacom, Safaricom and MTN, and telecom infrastructure companies like Helios Towers expressed interest. Ethio Telecom has been adamantly opposed to the latter’s potential entry into the market and was ultimately supported on this by the Ethiopian government. It is, however, unclear how long the ‘home team’ will be able to affect regulation in the face of opposition from the Ethiopian Communications Agency (ECA), the sector’s new regulator. Having invested massively in infrastructure, Ethio Telecom fears the competition if all aspects of the sector are liberalised. Following a meeting with key stakeholders in the sector on 7 September, Abiy confirmed plans to go ahead with the opening-up process.
Leasing of infrastructure
The new draft licensing directive from the ECA sets out plans for the lease of the existing infrastructure to the newly licensed operators, and in the long term would create the possibility for the operators to build their own. This could be an important source of revenue for Ethio Telecom, especially in the first few years, while operators set up their infrastructure. ECA director Balcha Reba told reporters that there should be
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several access options for new entrants: “sharing from existing infrastructure, having a tower company (infraco/ third party) providing infrastructure, an infrastructure-sharing agreement between the new entrants, […]or building your own infrastructure”. He also cautioned that there might be “technical limitations” as “existing masts may not have been designed to cater to the additional load”. The government is currently assessing Ethio Telecom’s infrastructure capacity with the help of the consultants at Deloitte. The ECA’s upcoming
ETHIO TELECOMS SUBSCRIPTIONS (per 100 inhabitants) 61.6
Fixed line Mobile Internet and data 20.4
27.6
0.2 1
2010/ 11
0.3 0.9
2011/ 12
5.2
2012/ 13
1
7.3
2013/ 14
1.2
2014/ 15
17.5
14.7
10 1
2015/ 16
1.2 2016/ 17
21.8
18.5
1.2 2017/ 18
1.2 2018/ 19
Africa Advisory, points out that “it is too late [to delay the liberalisation]. Ethio Telecom has borrowed $3.1bn from China to build its infrastructure and has only paid a small portion.”
the context of the US sanctions on Huawei,” the source said. Ethiopian telecoms specialist Terrefe Ras-Work argues that the privatisation “timing is off”. “We first need economic and political stability. [...] If we are selling because of debt, let’s at least do it at a better time.” Covid-19 and the country’s debt are slowing economic growth and elections scheduled for October have since been postponed. Alexander Demissie, the founding director of the China
Privatising the Ethiopian telecoms sector should bring lower prices for users
41.9
39.8
33.3
12.9 1
49.8
43
No cash cow
CARO/TRAPPE/SIPA
SOURCE: STATISTA
directives are expected to clarify the way forward. A source close to Ethio Telecom tells The Africa Report the parastatal is upgrading its infrastructure and implementing reforms to prepare for competition. The company has split its network infrastructure into five and has separated its technical department from its service departments for greater efficiency. Things seem to be looking up, with a 34% increase in profits announced for the first six months of the 2019 budget year. This could be the driving force behind the new tariff cuts on internet and voice calls. It is not yet clear which companies will bid for the Ethio Telecom stake. However, “the infrastructure projects currently under way are using Chinesemanufactured technology, including from Huawei. We should let the operators bring compatible material, especially in
Writing for Ethiopian Insight, consultant Fentaw Abitew issued a warning to potential investors in Ethio Telecom, saying ‘There is a myth – and it is a myth – that Ethio Telecom is a cash cow providing positive annual revenue.’ She went on to say that, despite the Chinese loan for infrastructure, ‘services have remained terrible’. The 12 expressions of interest that the government received by June for the two new licences included those from the Global Partnership for Ethiopia (a consortium composed of Vodafone, Vodacom and Safaricom), the Emirati company Etisalat, Madagascar’s Axian, South Africa’s MTN, France’s Orange, Saudi Telecom Company, South Africa’s Telkom and Zimbabwebased Liquid Telecom. So far it is the heavyweights – Vodafone and partners, Etisalat, MTN, Orange and Saudi Telcom – who are seen as having the best chance of winning. They, and those that will bid for a stake in Ethio Telecom, will be watching eagerly as the battles over the future of the sector are fought out by the different players in the administration and telecoms ecosystem.
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LAST WORD
EUGÈNE EBODÉ
TIERNO MONÉNEMBO
VÉRONIQUE TADJO
Cameroonian writer
Guinean writer
Ivorian writer
In Niamey, President Mahamadou Issoufou must be asking himself if it would be better to do what his peers are doing. As for Paul Biya and Marshal Idriss Déby, they have stomped all over their own constitutions. While Joseph Kabila played with the supreme law in Kinshasa, in Dakar the temptation will now be great for Macky Sall to follow the path of constitutional manipulation to hold on to power. We say “No!” to the return of unlimited power, whether by tanks or by pen! We must act before it is too late. Ouattara’s and Condé’s unacceptable candidacies are a challenge to us all. It is important for African and international opinion to see the seriousness of the threat and react together so that democracy in Africa does not become a sham. ECOWAS, the AU and La Francophonie sanctioned Mali after the military coup. But why are they turning a blind eye to the constitutional putsches under way in Abidjan and Conakry? Do these institutions want us to believe that a coup de force by civilian politicians is more appropriate than one by senior officers? The international community is in danger of hurting progress that contributes to establishing true and lasting democracy in Africa. If we are not careful, soon presidents will no longer be satisfied with modifying constitutions; they will make lawlessness or power in perpetuity the norm of public life. Let’s make sure it doesn’t come to that!
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BES TOCK
Alassane Ouattara’s plan to run for a third term is a very bad signal for the future of democracy in Africa. The Ivorian President is reneging on his 15 March declaration in which he promised to step down from power, and is thus twisting his country’s constitution solely for personal benefit. Jurists on all sides of the debate are contradicting each other, throwing the ranks of democrats into unprecedented disarray. Yet, the manoeuvre is clear. It consists of tinkering with the constitution to remain in power, either by a direct plebiscite through a referendum or disguised, through a gagged, frightened and rubber-stamp parliament. These repeated constitutional modifications are an abuse of power, and their authors are predators and usurpers. The die is cast the moment the constitution is flouted and the red line drawn by the national conferences of the 1990s clearly crossed. We should fear for the worst. And the worst has a name. It is called the single party, parliament without opposition, president-for-life. We all know those evils.
ADO
FRANCESCA MANTOVANI/GALLIMARD/OPALE/LEEMAGE; ROBERT KLUBA/REA; ANTOINE BÖHM
NO TO AFRICAN PRESIDENTSFOR-LIFE!
So, let us express our disapproval loud and clear. Let us reject any idea of a third term anywhere in Africa! We remember Nelson Mandela, who, after all the sacrifices made for his people, promised to serve only one term. He kept his promise despite the strong pressure exerted on him by his party. It is clear that the new Ivorian attempt at confiscation of power will be emulated if it succeeds. Guinea’s President Alpha Condé, who no longer feels alone in his desire to succeed himself, hurried to send a warm message of congratulations to his colleague.
MAROC TELECOM GROUP MAJOR TELECOM PLAYER IN AFRICA