Global gabfests on international development are an easy target for ridicule, given that some of them contribute little more than wordy declarations with minimal relevance for the world’s poor. This year, however, promises something different. Two crucial summits — at the United Nations in September and in Paris in December — will result in a set of global development goals for 2015 to 2030 and a new treaty on climate change, respectively.
In reality, the success of both summits will hinge on whether the world can first solve the trickier issue of how to finance such efforts. This will be the subject of a less high-profile but arguably more important summit in July in Addis Ababa, Ethiopia. Successfully bridging the growing divisions between developed and developing countries over their respective funding obligations can smooth the path for the other two events. Failure to come to agreement on financing will likely doom them. Read more
By Alain Nkontchou of Enko Capital Management
At less than 10 per cent of total domestic loans, the stock of African private sector corporate debt is still very low by any standard. If Africa is to sustain the promise of strong economic growth, lending to the private sector will need to increase substantially.
The reasons for such a low level of lending are well known. They include the lack of access to long term funding by the banks, the lack of centralised credit information, the difficulty for banks to exercise claims on collateral and, finally, the fact that most bank lending remains asset based. Read more
Two African countries – Senegal and South Africa – are just months away from issuing sukuk, or Islamic bonds, seeking to attract cash-rich Middle Eastern and Asian investors to finance their large infrastructure programmes, Islamic finance bankers told a meeting of the African Development Bank.
The move represents a potentially significant boost for the profile of Islamic finance in Africa. Until now, Gambia and Sudan have been the only countries on the continent to issue a sukuk – and they were only for tiny sums. Read more
Africa needs infrastructure above everything else, but doesn’t have enough finance. True?
Not quite, perhaps. Prior to a Davos debate on investment challenges in Africa, Ben Kruger of Standard Bank warned: “If we focus on the wrong challenges, the world will move ahead without us.” Ahead of Thursday’s debate on Investment Trends in Africa, he put forward some counter-intuitive views. They can be distilled into two myths. Read more
With the prospect of Fed tapering looming increasingly large on the horizon, emerging market entities have been scrabbling to issue debt while the price is still right. On Thursday, Banque Marocaine du Commerce Extérieur (BMCE Bank) joined party when it launched a $300m five-year eurobond at a yield of 6.5 per cent – the largest international note ever to come from a Moroccan financial institution. Read more
As incomes rise in Africa, the battle is on to snap up the millions of ‘unbanked’ – those without a bank account. The potential is vast: the African Development Bank says only 20 per cent of African families have bank accounts.
As well as innovative new players, the old global payment technology rivals Visa and MasterCard are keen to join in. Both are looking to enlarge their footprint in different corners of the continent. Read more
Ecobank Transnational has ridden the boom in African banking and has bold regional ambitions. But the Financial Times has seen documents that suggest some shareholders are unhappy with its leadership. Africa editor William Wallis talks to Daniel Garrahan about the outlook for the bank.
When a short seller launches a public attack on a company, the resulting storm can lead to a big dip in share price as investors digest the charge sheet – see Muddy Waters on Olam.
But African Bank, South Africa’s biggest household lender, saw its shares climb on Thursday despite a highly critical presentation by David Stemerman of Conatus at a conference in New York on Wednesday. A less-than-convincing case by the short seller? Or a question of the bad news already being out there? Read more
Lebanon has long exported its bankers and financiers across the world, but its banks have generally remained fairly conservative domestic institutions, venturing only carefully outside the country’s borders, writes Robin Wigglesworth.
Yet given the country’s perennial political turmoil – interspersed with the occasional bout of violence – many Lebanese banks have in recent years looked abroad for opportunities to diversify their operations. One of the pioneers has been Byblos Bank, the third-largest financial institution in Lebanon by assets.
Absa has agreed to buy Barclays Africa in an all-share deal worth R18,33bn (£1.3bn), writes Alistair Gray.
As a result, Barclays – which paid $4.5bn for a majority stake in Absa in 2005 – will increase its stake in one of South Africa’s big four banks from 55.5 per cent to 62.3 per cent. Read more