2nd Quarter 2015 Issue 32 An | Publication YUE Making CEO on UMC OeN ager) Co) Elec)Reo the cashless way. erewere Oma BUM Nit eee ay 04 African Banker's World 46 Development Ete Round-up ofthe last quarter i the Asian I nt fpromaussanvr AMrors barddng cle Bank take attent ? steteea net 16 New Appointments Markets vera onsen Who has moved where 51 Power eta ; 34 Ther icin ADB: The next president? 61 Special re a dover 21 Meet the candidates wy i larke Sep Kat 62 BRVM sez rrveerusnanen aa sna, Niger x sori 23 4 Turisia Herren fee Mane Ni Rena 24 journra, Cha Technology ‘aie 25 Cristina Duarte, Cabo Verd 66 Thepower of the spins 26 Samura Kamara, Sierr 68 le Pay late to partyin South A pm uanccn 27 7 kala, Zimbabwe 70 Prepaid cards for the unbanked 28 Su 29° Biran Experts 1 73 ? 30 Remittances 76 Early-morning call 78 80 34 Event: 82 : Awarding Africa’ top bankers von In Conversation ato Ic Paton 86 oe Sola Haram 88 90Abraaj closes $990m PE fund DUpaI-BASED ABRAAT HAS closed a sggom investment fund, the latest sign of robust private equity appetite for ‘African businesses, “The Abraaj Africa III Fund, the company’s third Africa dedicated fand, will target tothe continent's emerging urban ‘middie class, including those dealing in consumer goods and financial services “The fund will concentrate ‘on investments in the established markets of Nigeria, Ghana, Cate d'Ivoire, South Africa and Kenya, ‘The fund proved popular among European and North ‘American investors, who accounted for 64% of the capital committed: 74% of the capital was provided by institutional investors, pension fundsand sovereign wealth funds, according to Abra. “The strong demand for this new fund reflects increasing investor ‘s8abn was invested in private equity funds in Africa last year, popular with investors looking for exposure toemerging African businesses. $8.1bn appreciation for the powerful growth story unfolding across ‘Africa. It isa story driven by rapid urbanisation and favourable demographics that are fuelling consumption across multiple sectors from an expanding, young middle class,” said chief executive ‘Arif Naqvi. Private equity firms area popular vehicle for international investors looking for exposure to emerging ‘African businesses. s81bn vwas invested by such funds in ‘Africa last year, according to the African Private Equity and Venture Capital Association Africa Finance Corporation Eurobond oversubscribed Infrastructure investment institution Africa Finance Corporation (AFC) has raised ‘$75min its frst Eurobond issue. The five-year bond, the frst in aplanned series of issues, was six times oversubscribed to the tune of $4.7bn. The funds wil be used for "general corporate and financing purposes” and to repay an existing facility according to AFC. [AFC holds investments in 22, African countries, amounting to a$2.4bn balance sheet. The popularity ofthe bond revealsa strong demand among investors for exposure to much needed infrastructure projects ‘actoss the continent. The World ABC holds investments in 22 African countries, ‘amounting oa s2.4bn balance sheet $2.4bn Bank estimates that Arica has infrastructure funding needs of $93bn annually until 2020, Despite the availabilty of capital, many investors shy away from the dificult and costly intial phase of development, meaning that there are not ‘enough projects in which capital can be deployed.Equatorial Guinea signs China deals Chinese companies have signed araft of commercial deals with Equatorial Guinea, ina sign of Beijing's continued interestin closer ties with African extractors, ‘The tiny West African state, ‘one ofthe region's largest oil producers, signed agreements with Chinese firms in the areas of energy, construction and industry, Projects agreed at theinvestment forum in Dalian, China, included Chinese participation in the construction of a petroleum hub at Luba, an industrial city at Mini, and a hydroelectric plant on the Wele River. Reuters reported that Industrial and Commercial Bank of China, a state- owned lender, signed a $2bn infrastructure deal to provide support tothe Equato-Guinean and Chinese companies in the country following a state visit to China by President Teodoro Obiang (above). World Bank writes down Chad's debt Tae WoRLD BANK AND IMF have agreed to write down siabn of Chad's debt A joint statement from the multilateral institutions praised Chad for implementing poverty reduction efforts and economic management policies that are a pre condition for unlocking debt relief. ibn of that relief is expected to be covered by multilateral creditors, with the remainder covered by bilateral and commercial lenders. The statement said that Chad had successfully fulfilled 11 of the 15 conditions necessary to complete the Heavily indebted Poor Countries Initiative, including the successful implementation fora year of a poverty reduction strategy paper: That allows a country to participate in the Multilateral Debt Relief Initiative “Reaching the HIPC completion point represents an important achievement and milestone for Chad. It reflects the significant improvement in economic management in recent years. ait will also help Chad allocate more resources for poverty reduction and the promotion of economic growth,” said Mauricio Villafuerta, the country’s IME mission chieforld: West African B IME approves $918m loan for underperforming Ghana THE INTERNATIONAL ofsheddingits reputation _while protecting social essential to address Ghana's Monetary Fund has approved for economic competence, security spending. Aninitial macroeconomic imbalances agoi8mloantoGhanato leading to IMF eritcism that tranche of sn4.8m willbe and enhance investor help the country overcome its an unsustainable public debt immediatey availabe. confidence in view of economic woes load, wide fiscal andexternal The IMF waseritical of downside risks,” said Min The three-year imbalances, and poor policy the government’sefforts to Zhu, IMF deputy managing programme will support _choices have put the country’s restore economic stability, director. President Mahama's medium. medium-term prospectsat arguing that “policy “Zina said that the country term plans to get the economy risk. slippages” had undermined will need to clean up its back on track aftr it The programme is the fiscal consolidation efforts public sector payroll, improve expanded by only 4%in 2014 designed to kick-start growth since 2033 hiring and strengthen = its slowest pace in 20 years. by restoring the country’s “Forceful and sustained expenditure controls in order After decades ofgrowih, debt sustainability and implementation ofthe to begin to restore fiscal Ghana has looked in danger macroeconomic stability programme will be credibilityWorld Bank supports Ebola-stricken countries ‘The World Bank will give $650m Leone, Their economies have ‘of additional support ta the West — languished since the crisis led ‘African countries struggling to tothe closing of borders and recover from the Ebolacrisis. paralysed trade and investment. The new funds will beused The World Bank estimates tosstrengthen healthcare, that the three countries have agriculture and educationin _osta total of $2.2bn in GDP Guinea, Liberia and Sierra over the course of the year, with the disease’s economic tall exacerbated by adecline in global iron ore prices and the collapse of Sierra Leone's mining industry The latest tranche of funding takes the World Bank's total Ebola fight back commitments Above: Liberia's President Ellen Johnson Sirleaf talks to reporters. to $L.62bn sincetthe start of the crisis. The funds vill also be used to establish a regional disease surveillance system to help monitor future illnesses ‘or contain them before they develop into pandemics. Cote dIvoire launches Islamic bond (Core D'Ivorne HAS two phases of sasom and will set up a $500m Islamic finance new projects between bond programme to help aors and 2020. the country fund new Islamic finance has gained development projects traction in world markets but ‘The sukuk, which was set remains a relative rarity in up with the support of the Africa Islamic Development Baal ‘According to the IMB, the privatearm, willlaunch in market for Islamic financial assets has grown at an average rate of 16% a year since 2006, expanding from its traditional base in the Gulf to established financial markets Khaled Al Aboodim, chief executive of the Islamic Corporation for the Development of the Private Sector, said that the bank hoped to extend the concept in Cote C'Wvoire ‘Our ultimate goal is to develop the Shariah- compliant capital market in Cote d'Ivoire to enable narrowing the financing gap for developmental projects.”South Africa and China in currency swap agreement Sours Arnica’ Reserve Bank has signed a three-year curreney swap agreement with its Chinese counterpart, as the BRICS nations look to build con existing financial ties “The maximum s478bn facility, arranged with the People’s Bank of China, is designed to allow the central banks to exchang local currencies as a means of encouraging trade and investment The currency swap, which, will also be used to relieve short-term balance of payment pressures, follows a 2013 deal Anglo-American eyes platinum IPOs Global miner Anglo-American is exploring potential IPOs for some ofits troubled South African platinum mines, according toits chief executive, Mark Cutifan told Anglo’s ‘annual general meeting that the company favours a public offering for the struggling ‘mines, butis also in negotiations regarding a potential trade sale and may explore other options. “The restructure of our platinum business is ongoing and the operations that are producing today are, infact, doing well relative tothe platinum price. We have made a decision with respect to the platinum assets we wll develop for the long term and those we willdivest as they do not fit our th Bank access to China's onshore bond market. South Africa has made concerted efforts to forge links with China, including joining the Betjing-led Asian Infrastructure Investment capital criteria,” he sai. Anglo's South African platinum mines have struggled Lnder the dual pressure of low international prices and protracted labour disputes. Subsidiary Anglo- American Platinum suffered four months of trike action last year after members ofthe Association of Mineworkers and Construction Bank as a founding member in April That builds on South Africa’ status as founding member of the New Development Bank, for which it will host an African investment office and invest s1obn, Union demanded new pay deals. Minershave grown more strident in their pay demands following a split in the union movement and the dectine ofthe government-aligned National Union of Mineworkers. Cutifani said the strikes were responsible for 11% of a 25% decrease in earnings before interest and taxes at Anglo American,THE BANK WHICH INTEGRATES Sole een O as lead) otAfrican Banker's World: South South Africa toughens money- laundering regulations South Africa is toughening its financial regulations in abd to crack down on money laundering and terrorism financing. The new rules are designed to bring South Africa in tine with UN Security Council standards on asset freezes, and will also extend the supervisory powers of the ‘country's Financial Intelligence Cenire to allow it to take a closer JSE achieves record trading ‘Tus Jouanxesaunc Stock owned Merafe Resources after _ trusts also benefited from lookat suspicious transactions. Exchange surpassed its all itannounced to shareholders investor interest, with 25m The Financial Intelligence time daily trading record by that Royal Bafokeng, shares traded on the day Centre Amendment Bill 2015, volume in April, buoyed by Resources had sold its 28.68% Leanne Parson s, which is currently undergoing strong activity in the mining, stake tocommodities giant _ director of the JSE’s equity public consultation, is designed insurance and property Glencore. 725m shares in ‘market, called the record an | to give financial institutions more sectors. Merafe, representing 71% of “encouraging milestone.” flexibility in how they verify their The bourse recorded the day's activity, were traded “In comparison to the clients’ identities, 1,025mm trades on 28" April, its prior totheannouncement, corresponding period in The bill, which will lso abolish strongest figures since the July according to the exchange. 2014, the daily average the existing Counter Money togg listing of Old Mutual saw Activity was further volume traded on the JSE Laundering Advisory Council 1or8m shares change hands. buoyed by trading in thellife has inereased 15% to 281m is beingintroduced to close “The day's activity was insurance sector, with Old shares, further illustrating the | regulatory gaps in South Africa's dominated by the trade in Mutual accounting fora growth inmarket sentiment | existing regime. Itis expected to mining shates, driven by third of the sim sector shares led by resource stocks,” she be submitted to the cabinet by investor interest in black: tuaded. Realestate investment said, June. Standard Bank signs on with Korean partner uth Africa's Standard with commercial lender Woori from $24.3matthestart of the African bank like Standard Bank has signed a Bank ina bid to comer the millennium to $287m in 2010, Bank ill enable Woori Bank to business cooperation market for business banking according tothe bank Bilateral __ extend its banking relationship ‘agreement witha South services among South Korean trade increased from $6bnin _with key Korean cients toits Korean counterpartasbilateral companies operating and invest. 2000 to $25bn in 2011. hnon-presence countries,” said trade between the countries ing on the continent. ‘Woori Bank has no Standard Bank's global head booms, The Johannesburg South Korea's foreign direct presencein Africa and therefore of financialinstitutions, Robert headquartered bank has joined investment in Africa ballooned a partnership with a strong Cleasby.EAS eau MN ee Ce) Cease Deer QUR Re UR IN ore LeaDeRs TRADE eee coy ae Nielesy Pa ER en ete oe Rea t cab} eee ae ey cet cn ne Pee poer erage sone ee Ea cote Moving Forward”1 FRICAM BANKER 2ND QUARTER 2005 African Banker's World: North OCP raises $1bn bond issue MOROCCAN FERTILISER miner launched a second debt phosphate assets in Morocco, raising money on international producer OCP managed to _offeringto funda doubling of appointed Morgan Stanley and capital markets, according to raise sibn offunds with its mining capacity and a tripling Barclaysas joint book-runners the firm. Itaunched its first latest bond issue asit targets of fertiliser capacity by 2025, on the offering ‘global bond in April 2014 an expansion. according to a statement from The firmis moving away The sibn issue has been “The Casablanca. the firm. froma financing model based priced with a0 year headquartered phosphate ‘OCP, which owns, on bank debt in favour of ‘maturity anda 45% coupon. Arab Monetary Fund signs World Bank deal The Arab Monetary Fundis to collaborate onhelping countries ofthe regional financial sector, Middle East and North Africa work with the World Bank and develop theirbond markets, especially nthe areas of access The IMF has suggested that itsprivate sector arm the IMF stock exchanges andIslamic_—_tofinance forsmall businesses, the spreadof Islamic finance omprojects to boost financial financing systems Islamic finance, and housing - could help to boost financial market development in North “Through this MoU we will nance,” said Mouayed Makhniouf, inclusion in North Africa, where Africa and the Middle East. continue to partner and provide International Finance Corpora- large percentages ofthe popula The institutions will assistance for thedevelopment tion regional director for the tion donothave bank accounts.Priel oseNero a |PCCM Ete looks to Rwanda in $22.5m deal Teachers’ bank looks to IPO The Tanzania Teachers’ remaining 80% available tothe nian shillings ($0.25) per share. The establishment of the when it lists in June. teachers and workers with ‘Teachers re aspiringto development.~ 10000000 2012 African Guarantee Fund established amongst the Economic Development Stakcholders 2014 ‘Supported 1000 SMEs. 240 jobs cated. 2017 Plan Support 7,00 Stes Help create 170,000 obs 2019 Plan Support 000 SMEs Help create 253,000 obs. Africa’s growth is our growth. Africa stands as the world’s fastest growing economy and for us to be a part of this growth we are working with financial institutions across the continent to support the remarkable efforts of SMEs and help grow the brands of Africa's tomorrow. C4, == AFR(CANFONS ‘G6 coun he Govern of Deca ough Dana he Gover. pa eau esd nthe ncaa Development BarkNew Appointments JANUARY Unity Bank ‘Thomas A. Ftuh and Alhaji Aminu Babangida were ited as Chairman and e Chairman respectively of Nigeria’s Unity Bank. Babingidais the co-founder and Chief Executive Officer (of Phoenix Energy. Etuh has ‘worked for over 20 yearsin both the public and private sector. He was appointed Pioneer Vice Chairman of the Board of Directors in 2014 Development Bank of Malawi Former Malawi Finance Minister Friday Jumbe wa appointed CEO of the newly established state-owned ban Development Bank of Mala (DBM). Jumbeis an economist with management and finance experience, previously CEO of Admare and Admare Investment Holdings. FEBRUARY Barclays Africa Group Barclays Africa Group appointed four new employees from Deutsche Bank to its Africa trade team in Nigeria, based in Lagos. Leading the group is Charles Weller, managing director, Atrica Trade, with Oladapo Adeighe, Balogun Olusola and Dape Oluwole. Waller previously worked as Deutsche's Nigeria country head Central Bank of Angola Gualberto Lima Campos were appointed Angola's deputy frepevlopmen Bank of alan central bank governors ben Naidoo epaty Governor, Camposhas held series of SaetAtiean Reserve San and ‘ohmitangueya, Governor, government positions, recently central bank of ambabwe. as deputy minister for public investment, while Van-Dunem dhas been with the central bank for 16 years, Standard Chartered Standard Chartered has hised high-profile former JPMorgan investment banker Bill Winters as its new chiet executive, replacing Peter Sands. He will be based in London. Bank of Zambia Dr Denny Kalyalya was appointed Governor of the Bank of Zambia, He had been Deputy Governor ~ Operations and also served at the World Bank as Alternate and later as Executive Director of the first group for Africa. MARCH FirstRand Johan Burger will take over as chief executive of South ‘Africa's FirstRand group from 30" September, replacing ve Nxasana, who is retiring afier nine years. Burger has been chief financial officer since 2002 and was appointed deputy chief -cutive in 2013 Central Bank of Kenya Kenya's Central Bank governor Njuguna Ndung'u stepped down in March after eight years, His successor will be announced in May ~ the first time the governor will be chosen through open competition Shortlisted candidates are Doctors Haron Sirima, Patrick Ngugi Njoroge, Edward Sambili, Peninah Wanjira Kariuki and Geotirey Ngungi “Mavai, Selection forthe posts of chairperson and deputy governor is also taking place, African Bank Louis von Zeuner has been appointed as Chairmai ‘designate of African Bank's Good Bank in South Arica Von Zeuner has worked closely with the Curator on ‘African Bank since August 2014. He retired from Absa Group as Deputy Group Chief Executive in December 2012. Mizuho Bank Japan’s Mizuho Bank has appointed Moses Singo to head it Johannesburg office as senior director - global trade finance, sub-Saharan Africa Singo joins from Rand Merchant Bank, where he was head of trade finance, sales for Africa and India. ( interview on page 18). Reserve Bank of imbabwe Economist John Mangudya will take over as Governor of the Reserve Bank of Zimbabwe fora five-year term, He is the former CRO of the state-linked bank CBZ Holdings. South African Reserve Bank Kuben Naidoo was appointed Deputy Governor of the South African Reserve Bank for five years with effect from 1" April He has been an advisor to the Governor and a member of the Monetary Policy Committee. APRIL BADEA “The Mauritanian Minister ‘of Economic Affairs and Development, Sidi Ould Tah was elected on the 7" April as General Director of the ‘Arab Bank for Economie Development in Africa (BADEA), replacing thewwwsoprabanking.com WW f « inNew Appointments Algerian Abdel Aziz Khelef. He will take office on 30 June. Rand Merchant Bank James Formby was appointed as Rand Merchant Bank's new CEO, taking over on ¥ October. Until then he will operate as RMB deputy chief executive for a smooth succession, He has been at RMB since 1997. Old Mutual Old Mutual ple appointed Bruce Hemphill as Group Chief Executive, as part of a succession plan, taking ‘over most likely during Qs 2015. He will be an Executive Director and based in London, He is currently Chief Executive of Wealth, Insurance and Non-Bank Financial Services at Standard Bank Group. Parting Africa’s sea of trade ‘ses Singo has joined the Johannesburg Representative Oltice of Japan's Mizuho Bank as Senior Director ~ Global Trade Finance, Sub-Saharan A‘rica, Headquartered in Tokyo, Mizuho is one of the world’s biggest banks. Singo joins from Rand Merchant Bank, ‘Trade and Working Capital, where he was previously Head of trade finance, sales for Africa and India. Mizuho opened their Johannesburg office 18 months ago. In 2013, Mizuho Corporate Bank in Tokyo signed a cooperation agreement with South ‘Arica’s Department of Trade and Industry to promate and develop economic and industrial cooperation between the two countries Japan is now the most active ‘Asian finance sponsor in Alrica, according to global law firm Linklaters, responsible for $354bn last year alone, and is South Africa’ third-largest export destination and fifth- largest source of imports. In South Africa’ President Zama said, whilst in Tokyo, that there were 110 Japanese companies currently doing in South Africa. wannesburg, Singo is responsible forall trade products, including Mizuho's ECA business in sub-Saharan Africa, and its relationships with maltilaterals such as MIGA (the Multilateral Investment Guarantee Agency). He will be looking at letters of credit guarantees, ‘commodity finance, FI relationships and E financing, mostly for essential infrastructure projects, such as electricity, water and sanitation, rail and roads, port infrastructure, in experienced trade finance banker, he says "A lot of banks in Africa say they need to go to trade finance, especially short tenor so that funding isnot tied up for too long. African banks are not naturally dollar banks, they don't necessarily have dollar deposits. I's important for them to make sure that whatever USD they have, they use it efficiently, “Pma strong believer in trade finance and I believe it should be good business for banks into Africa” TTve met Japanese companies since starting at Mizuho. They are, of course, looking for projects, trading and investment ‘opportunities in Africa. Lean see that they do have interest and are considering how they should be going about their investments. They like South Africa because they have representatives and subsidiaries here and they ‘want to use itas a launching pad into sub-Saharan Africa So of course that’s very interesting for the rest of Arica, “Pima strong believer in trade finance and I believe it should be good business for ‘banks into Africa. African economies are generally driven by trade ~ trade from Asia, Europe and the Americas into Arica, and also intra ‘African trade. Ifyou look at commodity prices now, they are low, but one can assume that its a cycle and that pricing will improve. I'm optimistic about trade finance inPOWERING AFRICA'S FUTURE AFC, LEAD PROJECT DEVELOPER, INVESTOR AND FINANCIER Arica Finance Corporation (AFC) is the leod sponsor, developer ond finencier for the Kpone Independent Power Plant, Transmission Substction ond Fuel Supply asses in Tema, Ghana. (Cenpower Generation Compony Limited fa Special Purpose Vehicle created to develop the power plan’) is AFC's latest involvement in diving innovation and bridging the access to power gap across Afica, The pojedl -a350MW power generation plontiogether with exacuation ond fvel supply inasruciure, is being developed, consinicted and financed primerily by lrican sponsors, shareholders, cantractors fond lenders - making it the fist ofits kind in Sub-Scharan Aftica, It is also the fre private sector ‘greenfield IPP to utiize project finance in Ghone. ‘AFC, asthe mandated lead arranger also coordinated finence from a consortium of nine private sector local and intematianal commercial banks, developrent finance insitutions, institutional and export creditogencies When operational, the plant willimprove Ghana's security of electric dependable installed generation capacity by eround 13%. supply, increasing the country’s AFC....Transformational investments in Power...building the New Africa www.africafc.org Oil Project Finance Interntinel Alrkan ‘highly Commended Aico Infect Proje inneTheNewYorkForum ene AFRICA INVEST IN THE ENERGY CONTINENT Ourevite ACALL TO ACTION ee eee a ly eee te ele eee et eae en Cy rest of the world, Africa's leading entrepreneurs and media ee ee ee ea ere eet Ce Om tears a PN ee oc ee eee tee ae tere Bean nee ene yee Se aoe me ee ee en ee Cd will focus on the energy that comes from Africa's human 5 Cet ey i See eid me research and develooment, and sectors Ike agriculture and t Chines Deen cece! eect a 8 erro Ea ee eee ed B ow Se ee Pete ire Re Se cere este Rasa NYFA: the only pan-African economic forum to be held in Africa in 2015Peo Bctrst ed Pecnetn onnai Nene esc oes Cremer Pours creat pee ere Se ‘Under Kaberuka’s leadership, Pree Rees Btn peers eee influential development institution Punter eames tents eee cuca Peete cece ts transparency in the running of the Peter renee) TET DISTT TT aera eo eerie! Renee een ete] See nue aes Pere meee eesti Seen ee cea reer cere enn array of development and financial Peg Ene eee) eer Prsteestls eas ‘ eae eo ; the eight individuals that are in the ae a eee en a candidates the same set of questions pine c slbout what the future of AADB would Pecnie) Pavan ea setProfiles: African Development Bank Akinwumi Adesina of Nigeria is more of an agricultural development specialist than a financier. His vision is based on continuing decentralisation and increasing support for private initiatives Interview with Maureen Grisot. Akinwumi Adesina Minister of Agriculture and Rural Development, Nigeria Ifappointed, what would be your frst ‘action as president? Twould ensure that the AfDB sup- ports inclusive growth so the lives of the greatest number are improved To this end, the institution should focus on sectors that have the great- est impact such as infrastructure and agriculture. [twill also be essential to convince the private sector to invest ‘more on the continent. This isthe Key to creating jobs. Why would you make a good president? lived and worked ins African coun- tries, so I know the continent well. stayed for 10 years in Francophone countries and shall be a bridge be- tween these countries and English- speaking Africa, Finance is not the only skill needed to meet the impor- tant challenges. Throughout my ca- reer, I gained experience in the much broader field of development. In Nige ria, [have reached millions through projects. worked atthe community level and Iam able to connect the ‘macro and micro levels essential for achieving inclusive growth. What needs to be changed in the way the APDB operates frit to help Africa really take off? We must first become interested in the structure ofthe Bank, so that it can meetallits mandates more effee- tively It must have an impact in the country, and I willensure it deepens decentralisation. African countri can address several other sources of funding. But the Bank must remain their first choice. I want to improve operational efficiency and reduce the time between the selection of projects and their implementation. ‘AfDB must also rebuild integrity, transparency and accountability. | am also known for being a cham- pion of the fight against corruption all throughout my career. In Nigeria, in three months, I helped to end cor ruption that had lasted 4o years, and I want to make AfDB the African bank with integrity. Can you give a concrete example “Iwould ensure that the AIDB supports inclusive growth so the lives of the greatest number are improved” of something AfDB does that other development banks do not? {ADB has done a lot for infrastrue- ture on the continent. It takes about saabn per year to cover the deficit of infrastructure financing in Africa. ADB has attracted funding in th sector, including creating the initia tive Africa so. ‘The Bank has done alot of workin the electricity industry and supported renewable energy while promoting regional integration, ‘The Bank's strategy for 2013-2022 has been adopted. In this context, how can the new president pursue his or her own ideas and priovities? My ideas are perfectly consistent with this strategy. want to promote inchi- sive growth by developing the private sector, stimulating regional integra tion, by infrastructuze construction and ensuring good governance. These ae the AED priorities. ‘The decentralisation strategy has been criticised for being expensive ‘and ineficient. Do you intend to continue it? “The quality of AFDB projects can be improved only ifit is close to its customers. Agriculture in Nigeria isa success because the Ministry of Agriculture is decentralised in the country’s 36 states. Today we have the best performance in this sector, so deeply believe in decentralisation.Tunisia’s former Finance Minister, Jaloul Ayed, asserts that it is his banking experience which allowed him to gain a clear understanding of Africa's full potential. He calls for an AfDB closer to its markets. Interview with Joan Tilouine. Jaloul Ayed Former Minister of Finance, Tunisia IFappointed, what would be your first action as president? Twould request a general assessment ‘of the Bank, with particular emphasis ‘on human resources. An institution depends above all on the qualities of its staff. [will meet with key leaders and executives and listen to their motivations and needs. Itis also im: portant to assess efficiency and risk the implementation of sustainable development. The Bank's strategy for 2013-2022 has bbeen adopted. In this context, how can the new president pursue his or hher own ideas and priorities? agree with this strategy. I do not intend to turn it upside down but meet the Bank's objectives includ ing operational objectives. will add a few small touches that I consider ‘important, firstly, with regard tothe reform of the financial system, be- cause only a strong financial system can support a strong economy. We also need to conduct studies in the field of culture. 1 would like to put Why would you make a good president? My passion for Africa and experi- ‘ence. When I led the second-largest Moroccan banking group, Imanaged. the acquisition of Bank of Africa and created subsidiaries in more than 20 culture at the heart of development African countries. My profile stands ——"_ opportunities to come to us. Under because lam convinced that it has a oot from others. 'm nota pure prod- “I would ry leadership, the AfDR would be positive impact, uct of the administration, even if! request a more involved in business circuits ‘was finance minister after the 20n general ‘while retaining its original vocation The decentralisation strategy has revolution in Tunisia. havea wealth assessment _as a development bank been criticised for being expensive cof experience in the private sector of the and inefficient. Do you intend to and international finance. Bank,with Can you give a concrete example continue it? particular of something AFDB does that other Lam for efficient decentralisation What needs to be changed inthe way emphasis development banks do not? along with empowerment. Pm not the AfDB operatesforittohelp Africa omhuman It is a development bank and as_very focused on representative of- really take off? resources” such has played a crucial role in in- _fices because I am not convinced of Thave a vision in order for uso seize frastructure. There are two major their efficiency. In contrast, proxim- the extraordinary transformation of development banks involved in Af- ity seems most eficient, Proximity is the continent, I think the AfDB is rica: the AMDB and the World Bank. crucial inorder to be more proactive at the heart of this change and can The pan-African institution plays and pro-business. But it has a cost; play an even greater role. would like a crucial role in providing techni- and it must be studied. I would start the ADB to he more proactive and calassistance and intervenes to help with where there is the greatest need, ‘pro-business. I want us to seek out and assist member states in develop- that s to say, in fragile countries that ‘opportunities and not just wait for ing good strategies and reforms for we need to help.Profiles: African Development Bank Following his time at the AfDB, Kordjé Bedoumra intends to improve operational efficiency and pursue both short: and long-term policies. Interview with Hichem Ben Yaiche. Kordjé Bedoumra Minister of Finance and Budget, Chad ‘appointed, what would be your first faction as president? You have to rapidly evaluate the situ- ation. As know the AfDB well, this shouldn't be difficult. Action needs tobe taken to mobilise and motivate the teams. I would review the organi sational structure, focus on priorities, simplify procedures, optimise the budget and work to ensure effective decentralisation. I would devise a ‘roadmap’ to strengthen the Bank's capacity to work towards this vision. Why would you make a good president? In addition to my record, Ihave had years of varied experience at the Bank and the Chadian government. [As Secretary-General of the A{DB, you are involved in all strategie and Political discussions in talks be- tween country representatives and you help build consensus. My whole career has given me unique learning opportunities, which have equipped ime to conduct discussions and man- age strategic problems at the very highest level What needs to be changed in the way the ADB operates frit to help Africa really take off? Helping Africa to takeoffs primarily the job of African countries them- selves and their leaders. Africa will not take off just because of assistance. Each country, using its vision and mobilising its population, will ensure f its own development, but the ALDB provides financial and technical sup. port to key elements of this. Can you give a concrete example of something AfDB does that other development banks do not? For a long time, the AfDB has been an institution which has taken charge of regional projects and developed instruments dedicated to financing them. Today, many projects have been realised, It’s an area in which the ADB has become a leader and “Action needs tobe taken to mobilise and motivate the teams” Which they need to maintain and de- velop. Integration is the basi for the development and emergence of the ‘continent, ‘The Bank’s strategy for 2013-2022 has been adopted. In this context, how can the new president pursue his or hier own ideas and priorities? ‘There shouldn't heany major contra dictions. The 10-year strategy marks ‘out several major priority sectors. What suggest isto develop my vision around this 10-year strategy whilst reorienting t to ensure we carry out strategic objectives which I consider to be an urgent response to current issues ‘The decentralisation strategy has been criticised for being expensive and inef- ficient. Do you intend to continue it? “There is an ongoing debate between decentralisation and financial con: trol. These offices area requirement of the countries which insisted on the Bank having more of a presence in their area. The principle of hav- ing a presence in the countries is im portant and should be maintained, alongside other institutions. However, ‘we need to analyse the effectiveness of this decentralisation with regard to costs, With modern information systems and strengthened control mechanisms, we should be able to ‘ensure a better delegation of authority ata reduced cost and to the benefit of ‘African counties.RICAN BANNER 20D QUARTER 2015 26 Whatever improvements need to be made, the AfDB should have one mission: to serve Africa, according to Cristina Duarte, Minister of Finance and Planning for Cabo Verde. Interview with Hichem Ben Yaiche. Cristina Duarte Minister of Finance and Planning, Cabo Verde If appointed, what would be your Jirst action as president? “The AfDB is a complex organisa- tion in that itis both a development and investment bank. The president primary concern is to mobilise the ‘organisation as it is around a single ‘objective and vision. To do this, it necessary to listen to all of AfDB's stakeholders, in particular the Bank's staff. One must prioritise the crea tion of an environment of dialogue, internal analysis and collaboration. Can you give a concrete example of something ADB does that other development banks do not? ‘AFDB has played a catalyst role, It has added an African perspective to Africa's development. By prioritising this perspective, the ADBis increasingly contributing toa sense of ownership on the part of African governments, but also.on the part of African societies. ‘The Bank's strategy for 2013-2022 hhas been adopted. In this context, how can the new president pursue his or her own ideas and priorities? Thave been governor of the AfDB since 2006, I was involved in this strategy and approved it. This means that for the next president, the road- ‘map isa good starting point. "There is no need to put another on the table. It is more a question of seeing how quickly we can transfer this strategy, which has already been prepared, into a plan of action. Why would you make a good president? ‘As Finance Minister, | worked in a firm manner, but at the same time in participatory one. I practised with conviction, mobilising and motivat- ing the entire team of the Ministry. had the opportunity to exercise this authority in dialogue with all, but ‘while maintaining a focus on vision. What needs to be changed in the way the AfDB operates forit to help “One must Africa really take off? prioritise the ‘he decentralisation strategy has “Africa has already taken olf. So itis creation of an been criticised for being expensive rather a question of sustaining mo. environment and inefficient. Do you intend to ‘mentum. Africa got the bal rolling of dialogue, continue it? trough a combination of external internal ‘The next president should initiate and internal factors. African govern- analysis an evaluation of this process not in ‘ments are adopting good governance and collab- order to eliminate it but improve it practices. The primary responsibility oration” and make it more efficent, to turn for Africa’ take-off, and the sustain: it into an instrument that allows ability ofthis take-off lies primarily us to do more with fewer resources with Africans, particularly demo- so as to consolidate the Bank’s sus- cratically elected governments. tainabilityProfiles: African Development Bank ‘With broad experience in a number of financial institutions, Sierra Leon ADB works for Africa. Interview by Daniela Severino. Samura Kamara Minister of Foreign Affairs and International Cooperation, Sierra Leone appointed, what would be your first action as president? The Bank is not a learning curve for our president. Time is not on our side. Africa is on the surge, on the move. So the very first thing you want (0 do is engage the executive board of directors. We have a 0-year strategy. Unfortunately it started in 2013, and just about the time when ‘weare implementing it, the president is going. So youhave to put that into perspective, and the board of execu- tive directors should help you do th Why would you make a good president? T think I have a clear mix of skills, and experience in general economic ‘management. Its not about me com- ing in as specialist in one small area I've been policy leader in the broad aspects of policy development in Sierra Leone. In may engagement with the international community, I've learnt lot, ! know the views. Ican deal with the IMF, the World Bank and Arab funding agencies. What needs to be changed in the way the AfDB operates fort tohelp Africa really take off? The 10-year strategy is good, but we need to put it into context. The AfDB can havea general view but you have to bevvery specific. snot one size fits all, And thats why L wil focus on the country offices and regional offices, give them more power, strengthen them allow them to develop their outreach, Can you give a concrete example of something AfDB does that other development banks do not? In the case of Sierra Leone, more recently the AFDB has done well in terms of infrastructure development. ‘here was a time when we were get ting resources from the World Bank, 's Samura Kamara believes he is the right person to ensure the “The very first thing ‘you want to do is engage the executive board of directors” ‘ther bilaterals, but as the ‘gas pro. _geessed, alot of them withdrew from infrastructure. The AIDB stayed on, which is very good for Africa. The only unfortunate thing is it doesn't have enough resources ‘The Bank's strategy for 2013-2022 has been adopted. In this context, how can the new president pursue his or her own ideas and priorities? When I read the document, I de not see the final details ofa strategy, be- cause a strategy lays a framework. You now need to do an activity pro- file, look at costing and resources. ‘The ADB must strengthen its know!- edge of Africa, its communications network. You have a lot of geopo- litical associations, China-Africa, Korea-Africa, laly-Africa, There are ‘opportunities in this, but they have not moved forward, ‘The decentralisation strategy has been criticised for being expensive and inefficient. Do you intend to continueit? Inour post-conflict construction, we found out that Sierra Leone was with- ‘out local government for 30 years. And we thought that was a source for conflict because you are marginalis ing rural communities. We started decentralisation, and we benefited. In the context of the A{DB, that is ‘one good window if the Bank wants to make a serious impact.AFBICAN BANKER 2NO QUARTER 2018 27 With plenty of experience working at the ADB, Zimbabwe's Thomas Sakala believes he is well suited to keep the Bank's programmes and strategies on the right track. Interview by Hichem Ben Yaiche. Thomas Zondo Sakala Former Vice president of AfDB, Zimbabwe fappointed, what would be your frst action as president? T would ensure that every member of staff understands my vision and what Lexpect in order to promote the transformation of the Bank and the continent Building a winning team is ‘paramount. This might require some ‘organisational fine-Funing and com nication to both internal and ex ternal stakeholders. Iwill meet senior ‘management and Board members to share my vision and get their views Why would you make a good president? Firstly, my long experience at the Bank working in a numberof differ ent Key areas and reforms that have placed the Bank where it is today. Secondly, my extensive knowledge of African countries, economies and leaders. Thirdly, my strong belief that ‘Africa has the capacity to do more for itself. Fourthly, my familiarity with the international development land: scape. These attributes give me the right profile to build on Kaberuka’s successes. Above all, Iwill ensure ‘a smooth transition whilst quickly scaling up on existing momentum. What needs to be changed in the way the ADB operates for itt help Africa really take off? First and foremost, it isthe respon: sibility of each country to chart and implement its own development path. “Iwould ensure that every member of staff understands my vision” X X ‘The Bank must build trust and pro- vvide advice. The Bank must be alert to what is working and not, and be prepared to change long-held views. ‘The Bank must be ready to embrace anew role asthe bridge between old development banks and the emerging players such the BRICS. To underpin this, the Bank must be passionate, innovative and risk-taking. Can you give a concrete example of something AfDB does that other development banks do not? T'll give you three quick examples: 1) timely and accelerated responses during the 2008/09 financial crisis; 2) partnerships with the AU on the Su- dan/South Sudan question; setting up the Africa 50 Fund in response to the infrastructure financing gap. ‘Ihe Bank's strategy for 2013-2022 has been adopted. In this context, how can the new president pursue his or hher own ideas and priorities? The strategy charts a credible road- map for the Bank in its quest to be at the centre of Africa’ transformation agenda and I was part of the team that crafted it. The strategy foresaw the need for periodic reviews, the first of which will likely take place in 2016. This willbe an appropriate time to strengthen alignment with the AU Agenda 2063 and the post-2015 Sus- tainable Development Goals. There will also bea need to reflect on lessons from the Ebola epidemic. However, I still expect that in- frastructure, regional integration and private sector development will continue to be the core operational priority areas, whilst gender equality, fragility and food security will remain areas of special attention. ‘The decentralisation strategy has been criticised for being expensive and inefficient. Do you intend to continue i? Decentralisation is costly but neces- sary. The challenge is alveays to strive for a cost effective and efficient bal- ance. Lam also aware that we have failed in adequately reporting and measuring our successes and sys~ tematically building on them. A com- prehensive review of the programme started under my watch. I will build on this work and introduce additional ideas I might have.Profiles: African Development Bank Having overseen Ethiopia's strong growth into one of Africa's leading economies, its finance minister, Sufian Ahmed, believes the AfDB will be safe in his experienced hands. Interview by Alexa Dalby. Sufian Ahmed Minister of Finance and Economic Development, Ethiopia appointed, what would be your fist action as president? ‘The first decision {would make would be to review the effectiveness of the regional offices of the Bank. These offices have been established to speed up the implementation of the operation in the member countries. Untortunately either some of them are not properly empowered or have insuficient manpower, with the result that implementation isnot as quick as itshould be. Why would you make a good president? I will bring my track record to the Bank. My achievements speak for themselves. T have been finance minister for Ethiopia for almost two decades. Over that time, Ethiopia has changed from a country that ‘was associated with starvation and poverty to one ofthe fastest-growing economies in Africa. We are talking about inclusive, sustainable economic growth, investmentin infrastructure, in modernisation of agriculture and social development. With me, the Bank will be in safe hands. I have known AfDB and I have been work- ing with all muhtlateral financial in- stitutions for the last 20 years. What needs o be changed in the way the AfDB operates fort to help Africa really take off? The Bank really should be focused where it makes a real difference. It should be focused on effective im- plementation, Most of the time we dont lack ideas and projects. We have the right strategies and goals. What is missing is to convert vision into reality and make projects a reality. I think the Bank should focus on ad- vising the member countries on the right projects and the adequate means toexecute them speedily and within budget. Can you give a concrete example of something AfDB does that other development banks do not? From mylong experience with AfDB, Tcan say that the Bank is a trusted adviser to member countries. As a pan-African institution, the AfDB brings something very special which is missing from other multilateral financial institutions. Afzican coun- tries trust the AEDB. This isa very “The first decision 1 would make ‘would be to review the effectiveness ofthe regional offices of the Bank” ‘unique asset the Bank has which no ‘other financial institutions can pro- vide, Its in its DNA. ‘The Bank’ srategy for 2013-2022 has been adopted. inthis context, how can the new president pursue is or hher own ideas anc priorities? ‘The Bank's strategy for these 1 years isa general one For the elected next president, itis reallya matter of em phasis and reprioctising the goals in the Bank's strategies. don't see any serious problem in reconciling my priorities with the AIDB strategies Itisa matter of prioritising and em phassing some ofthe goals. ‘The decentralisation strategy has been criticised for being expensive and inefficient. Do you intend to continue it? dont agree with the criticism, pro vviding the strategy is properly imple mented, The decentralised decision: making is very important from my ‘experience here in my country, as well ‘as from my working relationship with the Bank. But these regional offices’ decision-making processes should be fully empowered. If not, they will be inefficient. They should be fully accountable, These are the two main things ~ full empowerment and ac- countability, With both, the regional offices can bean important part ofthe decision-making process of the Bank as well as efficient and cost effectiveRICAN BANKER eR 2015 29 With a wealth of experience in African development institutions, Mali’s Birama Boubacar Sidibé intends to make the AfDB more efficient in its decentralised organisation and expand its business operations. Interview with Hichem Ben Yaiche. Birama Boubacar Sidibé Vice president of the Islamic Bank of Development, Mali Ifappointed, what would be your first action as president? T would immediately convene a meeting with the board of directors to hear their views and share my vision. Then I would meet the Bank’s employees in order to reassure and ‘mobilise them around the business plan described in my vision. The first effective measure is to ensure the continuity of business operations, especially as we will be entering the 4° quarter, where efforts should focus ‘on achieving the year's objectives and preparing accounts. ‘The first effective measure Why would you make a good isto ensure the continuity of president? business operations, especially Firstly, my over three decades as we will be entering the experience in development finance 4th quarter” institutions, including 23 years at the ADB. This experience is rich and varied in terms of results and add to its traditional roe of sovereign positions, as wel as the credibility 1 lender, catalyst and provider of high- acquired. As proof ofthis, n regional quality, value-added services as member countries sponsored my well as arranger of mega-projects in application. Secondly, Lhave clearly partnership with the private sector, expressed my vision of my plan as investors and relevant states. ‘well as the means and solutions to ‘operationalise and adapt it. Can you give a concrete example of something AfDB does that other What needs to be changed in the way development banks do not? the AfDB operates frit to help Africa It teamed up with the AU and the really take off? Economic Commission for Africa While keeping the strategic source (ECA) and helped builda vision and ‘of the 2063 agenda, its essential to economic agenda for the continent, adapt the AfDB's approach in order approved by African leaders: Africa to maximise profits. The ADB should is fully im control of ts destiny for the first time in 50 years of independence, ‘The Bank's strategy for 2013-2022 has been adopted. In this context, how can the new president pursue his or her own ideas and priovities? The 10-year strategy is the result of extensive consultation with all stakeholders. It has been approved by all management structures within the Bank. This strategy should therefore guide my actions. However, the 10-year horizon cals for it to be adjusted, adapted and reassessed if necessary in the form of three-year rolling plan. It will need to adapt to economic conditions as well as the global environment and development challenges faced by African countries. The decentralisation strategy has been criticised for being expensive and inefficient. Do you intend to continue Yes. The objectives of efficiency and local services that are expected are commendable. But as with everything, the results are more important. Then comes the question of the means of our ambitions and capacity of generating revenue to cover the operating costs. It is, my understanding that the Banks management have engaged in a reflection based on these issues. If elected, T intend to continue this, reflection and take any corrective actions that may be necessary.20 AFRICAN BANKER 2ND QUARTER 2 Finance: Remittances Ahmed Ismail hopes that mobile technology will help. to crack open Western Union and MoneyGram’s near- monopoly on the remittance business. Early-morning call ckphoneshavealays he —— a fundamental part of the “The weakest remittance process, Ahmed part in the Ismail (ight) says with awry remittance laugh; when they ring early in the chain is the ‘morning, it tends to be costly physical “Usually you get a call at 6am or agent, where 7am, and you'll agree to send $400 someone goes because you're half asleep,” says toa corner Ismail, sofily-spoken Somalilander, shop with during an interview in his West some cash” London office. For the tens of millions of Africans living in the diaspora, remittances provide a social and economic link to their countries of origin. International money transfer isa ss8obn industry. Remittances contribute over s30bn to African economies; in some countries, they represent more than 20% of GDP. And yet Africans pay more than anyone else to sen money home, in part, erties say, due to its domination by just two global players ~ Western Union and MoneyGram. Ismail is CEO of WorldRemit, a relative upstart in the money transfer business intent on breaking their hold and taking advantage of the explosion in mobile technology that has revolutionised how Africans spend, store and transmit money. Ismail’s hometown of Hargeisa was effectively built on remittances, growing from a village to a city on the back of money transfers from migrants in booming Gulf states in the 1970s and 19805. “The way it used to work was that a trader would travel to the Gulf, collect money from migrants, use that‘money to buy goods, go back to their country, sll the goods and give the ‘money to the recipients,” he recalls. ‘Over the next few decades, the money flowing back grew enormously. According to World Bank estimates, remittances to sub-Saharan Africa rose from less than s93m in 1970 to almost szobn in 2010. As the flow of money grew, so too did the industry around it. Through the 1980s and 1990s, structural adjustment dismantled capital controls across much of Africa, and pushed the liberalisation of the banking sector. Western Union and MoneyGram raced to take advantage as markets ‘opened up ~ ofen by signing exchusive agreements with the dominant local financial institutions. Today, two- thirds of global remittance trafic goes through those two companies. ‘They abolished one type of monopolies, which were the state- ‘owned banks, but they opened up to another kind of monopoly” says Ismail. Last year a reportby the Overseas Development Initiative (ODI), a UK think-tank, revealed that the African diaspora pays an average S12 in fees and charges to send 8200 home. Based fon the discrepancies between Africa and the global average of around s8 this amounts to a si.abn ‘super tax ‘on the continent, the report said. The think-tank estimated that s586m of the total was associated with foreign currency charges levied by Western Union and MoneyGram, “Exclusivity agreements between. [money transfer operators), their agents and banks restrict competition and drive up prices, as do African financial regulations favouring banks over other remittance payment “options,” said the report. ‘This ‘super tax’ matters. Remittances are an important support for many African economies, and unique in that money tends to flow to low-income households to be used for consumption, investment and to pay out-of-pocket expenses such as healthcare costs. In 2014, around Mobile money Registered and active mobile money accounts in sub-Saharan africa ‘Above: Making femitonces faster {transfer isgood e1om 42am sam 485m 8am 146.0 sg3bn was transferred into sub- Saharan African economies, more than all aid from the Organisation of Economie Cooperation and Development countries combined, and is times that invested by private equity companies that year Regulation Despite the growth of the industry, informality and fragmentation continued in the ay" century until post-9/11 regulations drove many small operators to the wall, Anti- money laundering (AML) and ‘know- your-customer (KYC) rules created amajor burden. For money transfer businesses dealing principally in small cash transactions, the restrictions add enormous complexity and cost. Inan environment of growing risk version The Importance of remittances emitances asa percentage of GO, selected african counties in the banking industry, several cut off money transfer operators as they tried to limit their exposure to reputational damage and regulatory action, In 2013, Barclays announced it ‘would shut down the bank accounts of the Somali money transfer firm Dahabshiil; and in February, the last US bank that specialised in money transfers, Merchants Bank of California, announced it would close the accounts of all its Somali- American money transfer businesses. ‘After 9/1, [smail worked with the United Nations’ remittance programme in the Middle East and Fast Africa, helping smaller companies to cope with the sudden tightening of regulations. Itwas there he realised the twin challenges of compliance and cost representedFinance: Remittances an opportunity to crack open the ‘market, while the expansion of mobile telephony and banking created the ‘means to do it “What we are trying to do now is to provide a service to match the instant flow of communication,” Ismail says. “People are chatting for free cross-border. We're trying to provide service that allows people to move money seamlessly across borders, Currently, around 95% of remittances are cash-in, cash-out, with physical agents at either end for senders and recipients. Only 5% ‘occur online. African economies ran largely on cash, and the penetration 0% in the majority ofthe countries south of the Sahara. Cash transactions havea Jot more friction ~ handling, moving and paying in cash adds cost and risk es, recipients and the money “The weakest part in the remittance chain is the physical agent, where someone goes to a corner shop with some cash, and they are providing money transfer as a side business. They're not particularly interested in compliance,” Ismail says. “The challenge [money transfer firms] face is that the guy in the comer shop is not your stalf member. ‘They don't care aboot the compliance stuff, all they care about is paying their rent at the end of the month They cut corners” Because of the risks attached to the cash remittance business, Ismail says that he has sympathy for banks that have severed ties with the industry. “Unfortunately in our industry wwe have a lot of players who are ining a large network of physical locations that are giving a bad image tothe rest of the industry” he says. “Banks are starting to realise that in this day and age, somebody taking a lot of cash to a physical location isa very risky business.” ‘On the send side, WorldRemit is 190% cashless ~ senders can use their debit or credit cards, or transfer Cost of sending $200 Source: World Bank Middle East &North Afric) LT — $8.6 East Asia & Pacific $8.1 Hoek $6.2 Latin America & Caribbean a $60 suns! $59 Sub-Sah: Above: customers fervice outlet in Gating, Walrad Inward flows of remittances to sub- Saharan Africa Soe: Worl Bark 20 Ai TT $11.5 directly from their bank accounts. The bigger gamble for the ‘company was on the receive side, ‘where it lacks the huge agent networks ofits larger competitors “When we launched and said we ‘won't operate cash pickup in Nigeria, competitors. thought that wouldn't work,” Ismail says, "We can instantly «credit money to any bank account in Nigeria... We don't have cash pickup in Nigeria, but we are doing a large volume” ‘When it began, cash pick-up wes 100% of World Remit’s business; today itis only 30% Ismail thinks that could fall even further, even as the overall business grows. “The company allows recipients to receive money direct to their bank accounts, but it is in mobile ‘money that Ismail sees the greatest potential already WorldRemit sends more money to mobile wallets than Western Union or MoneyGram More than half ofits transfers into Africa are received as mobile money ‘orairtime top-up, 'M-Pesa has more agents in Kenya than the entire Western Union agent network in Africa,” Ismail says. “Those mobile operators are making big difference in terms of how people receive their money.” Noteveryoneisconvinced thatthe ‘mobile revolution will fandamentally change the cost structures of the remittance business, however “If the question is ‘do mobile wallets lower the cost ofremittances?, the way it could conceivably do itis by mobile wallet operators expecting less revere share from operators like usto terminate transfer on & mobile wallet than into cash,” says Alex Hoffman, executive vice president for business development in Africa for MoneyGram. “Maybe you could make an argument that their costs are lower because it’s electronic rather than having a cash payout. But...in our discussions with mobile operators, we don’t observe that they are demanding less revenue share than their competitor banks. “Our cost structure of sending to mobile wallet is about the same as sending to a cash payout. Therefore it’s not driving down the cost of remittances.” Around 90% of MoneyGram’s business is still cash transfer, but Hoffman envisages the growth of “self-service channels”, includingmobile wallets, kiosks ad ak —— accounts. The company asset tselta “Something target of making s-20% of itsevenue that has been through these channels by 2037. a major asset While cost is important to for Western customers, Hoffman says the money Union, half transfer business is complex, and a million requires the reputation and scale locations, larger operators like MoneyGram is now. have-regardlessof thechannel. becoming “Moving money is ot as simple a major as itmay sound...There is alot of liability” regulation involved, there’ a lat of risk management, there area lot of systems and processes and people and tools that you have to put in place,” Hofiman says. “We know how to move money safely and legally around the word. ‘Whether it’s cash or self-service doesn't matter” ‘Western Union did not return requests for comment. ‘At WorldRemit, Ismail says he hhas been able to bring fees down 20. 30% when sending money to most countries, and more for some. The company offers minimum fees of €0.95 (61.02) when sending money from Europe; Western Union and MoneyGram, minimum fe typically $5 or above, Ismail is quietly evangelical about the potential of mobile money for economic development. It allows individuals in rural areas to receive money without the cost of travelling to cities; empowers women by handing them control over finances and brings informal businesses into the formal sector. He believes the structures that allowed the big incumbents to dominate the markets will be fan anchor on their growth as the industry shifts beneath them, adding cost and complexity. “Something that has been a major asset for Western Union, half a million locations, isnow becoming a major lability,” he says. “These are the legacy issues that we don't have.” Hisbeliefhas been backed by real smoney. In March 2oug, venture capital firm Accel Partners invested $4om in series A funding; in February this ‘Technology Crossover Ventures 'V) led a Sioom series B. The company has expanded from 40 people in early 014 to more than 50, and will be moving headquarters to ‘more upmarket premises in Central London. “We see huge opportunity in this space,” Ismail says. “The industry is rapidly shifting to online. Its 5% fof ‘volumes]. Over the next 10 years we think 50% will move online. We think we will see seismic transformation in the way that people will receive money. Peter Gu secure more se) Ee ulid new revenue steamer your business with the Axis vdeo Surveillance solution, With the conversion from analog to digital Tis OPOFLURIY Is erasing. What's more you already have the felationships and Krowledge to capitalize on it Secure ap opportunity at www.axis.com/companion Introducing the Axis video surveillance solution AXIS a COMMUNICATIONSEvents: African Banker Awards : Pe : Cenc nk Limited (aur Mastercard fix) MasterCard and Steward Bank ‘UBA Kenya Bank Limited (Kenya) ed ‘Banco Comercial ede Investimentos (Mozambique) Ecobank Transnational Nedbank (Suh Awarding Africa’s Sire bni Top Bankers ‘The Federal Democratic Republic of Ethiopia debut Slbn [organ Che '$500m 3.903% Sukuk Bond Stondard Bank Group Lined Largest telecom fnancing inAfricain2014 Standard Chartered Bonk n every region of Africa this atwy-thends, gowammmmrmmm year, Banks have been making Skbatnethe Sno ‘Sept Petroleum Development Company Tepiuous maovatonsand aides . eee Fin capt toned “These impressive performances langue larecalne au Commerce 865m Financing Package forthe are reflected in the wide range of Extoieur von Etvoptan tativay Corporation hominees forthe upcoming Aitican May imaaPaaa Grats Haner Sarde me “Innovation is key, financial dao Tesla Meclorths Hokegs Leted ZAR 2\Aba inclusion is key, and deals ae key to ($2.0) Siondard Sek ep Lat the continent’ transformation, Banks = a atPO Sant an cem fully engaged in all three,” said a seem fully engaged in all tres ai Standard Chartered Book Aeulson of CHC Holings . - 4 Ere lermes 0 Omar Ben Yedder. —£ -— ‘The expert judging panel of Segun Agbaje Mancging Direcor/Chief inholf 880 binkets ag bunts odes wh Shuntoporcra ‘Mesandr Forbes §950m ating and will pick the winners have a very faces eGuEen $830m PO fandom ark difficult task on their hands, The CHO nine Comercale de estienos ‘wards will be hosted by African bert Eien Gr Canpower Kone PP Banker magazine a the Annwal Teno ‘Searinane Copeation Neale Arn Deemer rhe Assog FN Capit Ll ik (AIDB) on 27" Mayin Abigin, Mian Dir Coopentn Rant ACME ER Cail Lied —_ Cote d'Ivoire. The awards, which are Development Bank Bank pl {ate Turkana Wind Project in Kenya held ander the high patronage ofthe Tag Himsa readin cocaine NS [AIDB and hosted by the Professional pr ral er 2H sat ‘Association of Banks and Financial LL Institutions of Cate d'Ivoire (APBEF- ‘Gampagide Penaeciive Avian " ai Ino of ie doe APB EM connivance en ea Banque AMantiqu, Corns Bank, GT == lity Bank Bank, Ecobank and Nedbank. ECAis, tere Fieldstone Africa Sopra Banking Software and Travelex Feniston Ntmwta erence ‘Nedbank Lined arg also supporting the Awards. The (Moroco} and Merchant Bank ala Dinner and Awards presentation eS ——_ will take place at the Sofitel Abidjan Se ae Ivoire Hotel. ‘Trust Merchant Bank (co ‘Standard BankTELECOM Connectivity without borders Africa’s super-fast fibre network Seed — 2 eer esr ere Liquic Building Africa’s digital future www.liquidtelecom.comin Conversation: Mohamed El Kettani, CEO, Attijariwafa Bank Attijariwafa Bank has expanded from its home in Morocco to many other countries in Africa. CEO Mohamed El Kettani explains how and why it has been making these ambitious strides, Conquering Africa, one country at a time What are the keys to the success of Attijariwafa Bank in Africa? One of the key factors in the first stage of expansion into Francophone ‘Africa isthe fact that we have built an integrated banking and finance group, which has already established firm foundations in Morocco itselé ‘An international strategy can only be successful if it hasa strong position in its domestic market. This is the case with Attijariwafa Bank. We are the oldest Moroccan bank, founded in 904. The merger in 22003 of the Banque Commerciale du Maroc, the leading private bank, and Wafabank resulted in the creation of Attijariwafe Bank. We feel that we have been enriched by the addition of the personnel from both banks. We had the choice of either restructuring, as international banks do, and offering compensation to some personnel, or capitalising on existing skills. It was thus that we initiated an ambitious development programme in Morocco eight years ago 50 that we could be involved in increasing access to banking in our country. We subsequently extended our network by adopting our frst roadmap with the acquisition of banks on the African continent, Did you maximise the opportunities in your domestic market before turning your attention towards Africa? ‘Absolu ly. Teams were mobilised to manage this merger, which (ok — two years. We ended up with a market share of between 26% and 40% in a sector that has 16 banks ‘We exceeded the critical size needed before we could consider expanding internationally. Fortified by this strong position and our human capital, we sought out considerable growth. Given our cultural and historical proximity, Francophone Arica has been the most obvious market ‘The African market, particularly this area, is not easy. How di you go about ensuring a secure ‘environment? ‘We capitalised on the experience and model that enabled our success in Morocco, This is because in spite of their differences, African countries have a common denominator, not least when it comes to sociocultural sensitivity and the nature and structure ofthe country’s economic fabric. Also, we are operating in an environment which has been strongly shaped by fomnly capitalism, In Morocco, Attijariwafa Bank has developed products and services for SMEs [small and medium enterprises] and ways of approaching customers, particularly microbusinesses, operating in the informal sector. We have therefore developed risk evaluation strategies and rating tools for SMEs and scoring “Ifwe have this strength, it’s because wearea Moroccan bankand therefore African” tools for microbusinesses. We are now duplicating these models but adapting them to the context and reality of each country. It is this which enables us to gain market shares. We have invested in Central and West African countries, wher access to banking is between 2% and 10%. Asa result, there is plenty stil to do to provide solutions and democratise access to banking products, particularly forthe middle classes, microbusinesses and SMES. ‘These groups have been ignored by international banks operating on the African continent. Why? Because they have not developed the strategies they need for a better understanding of the market and to make the necessary changes to procedures, methods of analysis, appropriate supervision and monitoring tools. If we have this strength, it's because we are a Moroccan bank and therefore African, Your strength is also that you adapt to the realities of each country. How did you adopt the culture of these countries and capitalise on your proximity? ‘At the start, people believed that we would take'a populist line, enticing them with promises: ‘When were in Tunisia, wel be Tunisian, when we're in Congo, we'll be Congolese, when were in Senegal, welll be Senegalese.”Interview:Mohamed El Kettani, CEO, Attijariwafa Bank The strategy devised by Attijariwafa Bank shows that our plan will never be centred on Morocco. Our objective isto be a leading bank in each country. In what way? Aitijariwafa does not just want to open a little bank. We want to be ‘one of the leaders, at the front of the pack and have a coherent strategy that supports the social and eco- nomic development of the country in which we're operating, Our vi sion is structured around the idea that each branch becomes the focus of the other branches. The men and ‘women who work at the heart of our institution are the best equipped to understand the potential synergies that could be developed with other For example, Senegal and Cote Ivoire were keen to develop syner: gies with Mali, Burkina Faso, Niger, ‘Togo or Benin..So, yes, we operate using the principle of regional in- tegration, “This is because what counts in cour strategies is to be highly active in developing products and services across all customer segments on a national scale, serving households, the middle classes, affluent, wealthy people, SMEs and microbusinesses as well as large company groupsand governments. At the same time, we Want to continue to consolidate intra- ‘African trade and co-investments This turned into the idea that we had rears ago of organising the Africa Development Forum, How is your strategy being rolled out is the rest ofthe continent? Before initiating our African strategy, we took a scientific look at it. The first thing we did was study the po- tential of each country. In each case, ‘weasked ourselves: Can we genuinely bring added value to the country’s banking systemt Ts the country stable ‘enough for us to beable to implement our development model? ‘Once this was complete, we car ried out some research. As [stid, our “Attijariwafa does not just want to open alittle bank. We want to be one of the leaders, at the front of the pack’ objective is to have some ‘targets? which occupy a relatively comtort able position in their natural market This meant spotting banks to buy, as, there are always opportunities for the transfer of banking assets in the African market. [fnot, we would rather grow a bank from the ground up. If we purchase a bank, we im plement a two-year transformation project to bring the purchased bank Up (o the standards of the Group. We are very demanding on this point in terms of governance, over hauling processes and procedures and changing information systems. ‘We have a global information system that we implement in all our branches. By sharing information, we are able to publish our consolidated ‘accounts. This information system allows us to control all ofour banks? accounting. We pursue a policy which relies ‘on human capital, with professional development occurring through four academies, the first in Casablanca, the second in Tunisia, where access to banking has already been developed ‘ona par with Morocco and where we have a large workforce. For West Africa, we have an academy in Da. kar and in May 2014, we founded the fourth academy in Douala to en. ‘courage professional development in Central Africa, The first phase of our continental ‘expansion isto establish in all Fran- ‘cophone African countries, We have yet to expand into Algeria, Chad and the Central African Republic. There are eight countries in West Africa and six in Central Africa, That makes 19 countries including those in the Maghreb, We have a representative ollice in Libya. We are waiting until the situation in this country stabi: lises. We are now starting a second stage of expansion beyond Franco. phone borders. Approaching this other part of the ‘continent will required a ‘cultural revolution’. Yes, acultural and mental revolution, Our creed is Give mea woman or a rman and will give you a project’ Itis the teams who carry out the projects Without them, we would never be able to focus on development. In order to start this second part of our roadmap, we had to focus on ‘our workforce in order to enter new ‘countries whose cultures are different from those in Francophone Africa. ‘What makes our model special is that we have trust in the skills of the local workforce. Out af 5700 people working in our African branches, in 13 countries, there are only 23 Mo- roceans. Moreover, the latter will ‘gradually make way for local skills, This expansion will require significant capital. Where wil this ‘come from? Equity and resources are rare. You have to apportion them with great care and protect them. ‘This is our ‘group strategy. We have a policy of allocating resources and equity coun- try by country and asset by asset. InMorocco, we are fortunate that our regulator, the Central Bank, adopted the Basel I requirements, then Basel Mand will shortly be adopting Basel Is the Moroccan banking sector complies with the strictest interna tional requirements and this is why the bank's growth is based on such strong foundations The firs stage, the 13 countries in which we ae investing, was entirely self financed thanks to generated cash flow. We only had to carry out ‘one capital increase of abn dirhams (204m), restricted to group employ ces, Employees thus became share- holders of 8 ofthe hank’s capital. It is one of the highest levels in Africa ‘out ofall the companies listed on the stock exchange ‘We are listed on the Casablanca stock exchange and Atiijariwata shares are very popular with in vestors. Ifwe carry out large-seale projects, we can turn tothe financial market to raise capital itehelSapin (i Dresents Mohamed Eixettan' of ‘Atjarivata Bank suit the Legion ‘tHonnesr. Senegal, Céte d'Ivoire, Gabon and others have plans regarding the emergence of their countries. Are ‘you involved in these major projects? In West Africa today, Attijariwafa Bank is by far the leading banking provider in CFA francs. When you are that size, it is vital that you are involved in financing projects aimed at developing the countries in this region So you're transforming savings into investments. rst ofall, we are the leading facilta tor of treasury bonds. We have a posi- tions leader in facilitating finance for the governments of this region. Beyond financing economic opera. tors and households, we finance gov- ernment projects, specifically within the framework of PPP concessions or finance projects. This is why we are involved in financing power plantsin Senegal, Cote d'Ivoire and Mali, We are helping to finance airport expan sionslike the one at Bamako. We are currently appointed by Céte d’ivoi toadvise on and secure finance for a 1gookm networkof motorways. We are actively involved in supporting the development of these countries, You operate in banking, insurance, consumer credit and business bank- ing. Does this not result in a lack of {focus and cohesion? There is no lack of focus from the customer's point of view. Beyond financing their cash needs and in- vestment projects, a customer of- ten needs advice. In order to retain each customer and create a lasting relationship, an integrated banking group needs to offer a whole range af services. There's no lack of focus Quite the opposite. We are de- veloping the cohesion between our divisions and synergies follow on from this; it’s this way of building an integrated banking and finance group that has been shown to be suc- cessful in Morocco and that we are in the process of implementing in the countries in which we are operating. It seems that the forum you are organising is becoming very inluen- tial aswell as building acculture that crosses banking, finance and even We first had this idea about the Africa Development Forum five years ago. It was inspired by a discussion with King Mohamed VI. He has re- peatedly challenged the Moroccan private sector, calling upon it to get involved in Africa. His principles have been shaped by a belief in South- South cooperation. He has come back to the issue several times, Based on these political messages regarding the Moroccan private sector, we seized the opportunity to launch ou inter national strategies. A private group like ours needed to set an example We told ourselves that we had a role to play and set out to conquer the African market. We then asked our selves how to strengthen South-South cooperation. ‘We looked at the issue from all angles andlistened to our customers. They said:' We have issues with con. nectivity and air transport; we don't know what’s happening where you are in Morocco. We said to ourselves: “Here's an opportunity to ereate a platform where, over two days, peo- ple can come together in a specific location, somewhere we can organise discussion between economic and political players to manage South- South integration ina practical way This is why we created the Africa Development Forum, When you look at the banking map of Morocco, there is wide range of competitors. Do they overlap at all or does each player stay within their own domain? Isincerely weleome the development work that our colleagues, the BMCE Group and the BCP Group ete., are doing in Africa. We have great re- spect for each other. However, when i comes to business, the gloves are off. I can assure you that each one defends their interest... in the best interest of all African stakeholders Competition is alive and wel.CCS MOUs a ee Cn EEpubic investments were not the [Highly-Indebted Poor Countires] _ price inthe $70 range. only growth drivers and that the initiative, who benefited from that __Rotich is also optimistic about ‘growth was broad, with areas such relief, [But] for Kenya we were not developments since the adoption as financial serviees and construction beneficiaries of debt relief. We've been of Kenya's new constitution, which contributing too. Despite a dip in paying our debtsand we'vemanaged devolved a lot of power to local tourism, which in 2013 contributed debt so we know what space and governments, a move that has 12% to GDP, growth prospects in 2015, capacities we have” caused some friction. In the port of are also expected to be high, possibly Mombasa, forexample, there istalk of reaching 6% or more depending on International markets anew shipping levy tobe introduced the effects ofthe fallin oil prices. Rotich thinks that Kenya going toby local government, a policy which Rotich hints that the government international markets was positive has come under some criticism. might come back to market. Despite for Africa more broadly too inthat it __Rotich, however, is sees such fearsatthe end of 208 and early 2014 familiarised international investors disagreements as part of the learning that the end of Quantitative Easing with African risk and will make curve, “For the three years that we in the US would lead to investors them more comfortable in the future. have managed devolution we are on moving back to US treasuries, “International investors} now have the whole comfortable with the pace European Quantitative Easing as abetter understanding of Africa “There will be challenges which we are ‘ell as investors exiting Russia meant and I think this gave an opportunity addressing, particularly in financial that there was still healthy appetite for them to actually diversify their _management. We are building the for African sovereign debt last year. portfolios, capacity of the counties to earn how ‘This meant that when Kenya went “We will continue to be active in to improve their fiseal management to market they managed to do at so the market. We evaluate our needs, “With regards the issues of at competitive rates: when it tapped and as we also have a really vibrant taxation I think the constitution the market for the further $7som, domestic financial market, we'll be and the laws are clear who should for example, it did so at a highly balancing our borrowing looking tax what. We are working on a competitive 575%. both domestically and externally. framework of improving the business “Looking again at what is We will also be looking at Diaspora environment. Itneeds to be designed ‘happening on the global economy, bonds. We are looking at a range of to enstre that you don't chase away ‘what I see is another year at least products. We need visibility outside investors in your county. We are of sustained low interest rates, so and it will encourage our corporates working with them to build their ‘our medium term outlook has not in Kenya to access the international capacity to understand how they changed and, from that perspective, capital markets and invest, so we need to manage the resources that we see ourselves continuing to are looking at it not just for raising are available, both for what they can participate in the international proceeds for infrastructure ut other raise on their own and what they get ‘capital market and see how we can benchmark bonds for our corporate trom the central council office, We are benefit from the conditions that there —\_ sector in Kenya and also visibility also going to come up with a model are now,” says Rotich. In response outside” Rotich is confident with the of fiscal legislation that governs what to those who worry that African -—===—Ssmanagement of African economies you should tax and what you should sovereigns are piling up toomuch despite some numbers from theIMF not tax.” On the theme of taxes, the debt through such strategies, Rotich pointing to high debt; average debt government has also been criticised insists: “Iwould understand the ===) —_to GDP is 35%, a 1o-year high. But _forarecently introduced capital gains criticism] froma point of view of -—-—=»—=——_—Rotich believes this money is being tax But Rotich maintains that Kenya's countries which are having debis === put togooduse suchasinfrastructure capital gains tax of just 5% is one of constrained, especially countries. _—=»—=——_—tohelpexpand productive capability the most competitive in the world, thatare coming out fromthe HIPC and open up economies. although he admits that there needs Regarding oil, Kenya is a net tobe more clarity around the details importer, at there are big exploration ofits application. Rotich is confident projects under way. Rotich says that this tax will not dampen activity in thefall in the price of oil was positive the capital markets. In April, Kenya for the country and for its balance an MoU with the Qatar Financial of payments. At the same time, he is Centre to create a financial hub for not worried that the fallin oil prices the region, and for Rotich, thisis just will reduce investments in the the start of much more activity, for oil sector and says that companies Kenya, East Africa, and the continent Which are exploringhada breakeven as a whole. CNAwards: 2" Africa Urban Infrastructure Forum and African Mayor Awards The continent's most transformative mayors and policymakers gathered in Angola to discuss the importance of moving Africa's urban development in the right direction. Shining a spotlight on Africa’s cities articipants and panellists from over 20 nations gathered at the 2"! Africa Urban Infrastructure and Investment Forum held in Luanda, ‘Angola, in Apri “The consensils was that successful urban development in Africa needs planning and requires sound vision and strong political will. Throughout the two days of discussions, a number of recurrent themes came up, not least the need to engage the private sector tohelp develop Africa cities. Private public partnerships at all levels are needed, it was agreed, including in both central and local government Planningalso needs to focus on social inclusion as well asan understanding of African culture. Otherwise, what could appear a master plan on paper ‘may become an expansive shum down theline, ‘Opening the Forum, Angola's Vice President Manuel Domingos Vicente said that 75% of Angola's population now lives in urban areas. Ina keynote address, Pedro Pires, former President of Cape Verde, reiterated the need to address the causes of urban migration. Jean-Pierre Elong Mbassi, Secretary-General of UCLG-A, the global network of cities, local and regional governments, stressed the urgent need for urban infrastructure investment plans, with an emphasis oon financing, Aisa Kacyira, UN Assistant Secretary-General and Deputy Executive Director for UN-Habitat, commented that the Forum was Cimento) eon) ‘cera = Ghana $200,000 Shortlisted: Cup Tov, South Africa and Da (emo) Tanzania $100,000 ‘Shortlisted: Ana, ha Kinondoni id Ric, Gl Snr) Praia ~ Cape Verde $50,000 essential in moving Africa towards to the development and empowerment oflocal economies. Forum organiser and publisher of African Business magazine, Omar Ben Yedder, commented, “Many important issues were raised and there were many take-homes for participants. We need to look fr local solutions to local problems. “For example, as one of the speakers clearly put it, how can we discuss affordable housing when 70% of the inputs for these houses ar Senegal nd, and Bagong, Cameroon ‘Above: Celebrating the winners of the large dey award, Accra, whose ‘mayor Is Alfred ‘ke Vanderoulle (Genrded, centre. are imported. Too often, we are importing solutions which do not take into consideration our needs nor the organisational structure of ‘our cities” Key areas which were discussed included the critical isue of financing as well as the conditions needed to ‘mobilise the private sector and create the right incentives for investors Quick decision making, stability in terms of the political and regulatory ‘environment were all cited as basic requirements from an external investor's perspective. Clarifying property rights was identified as an important issue which needed to be addressed urgently, {In conjunetion with the Forun ‘African Business magazine presented the first ever‘José Eduardo dos Santos African Mayor Awards’. These awards acknowledge the leadership and contribution made by mayors of large, medium and small cities and celebrate achievements and excellence in urban development in Africa “The winners will receive prize money totalling $350,000 for specific initiatives (see box, let, for details) Speaking at the ceremony, Ben Yedder said, “The winners tonight are being led by individuals who are showing essential leadership qualities as they help build cities that work ‘And we will need more exemplary leadership, good governance and innovative thinking whilst paying close attention to our culture and way of living when dreaming the cities of tomorrow. Our leaders need to be lose to the people, and our winners are demonstrating these qualities.” ‘The winners were selected ‘unanimously by the judging panel of Jean-Pierre Elong Mbassi, UCLG-A; ‘Tokunbo Omisore, President of the Africa Union of Architects; Aisa Kirabo Kacyira, Assistant Seeretary-General and Deputy Executive Director for UN-Habitat; ‘Victor Leonel Miguel, Chairman of the Angolan Architects Union; and Gaetan Siew, Chair of the Construction Industry Sector of Mauritius.By funding the Thika Project, we're helpii a community.The Loukil Group introduce its UADH automobile pole on to the stock exchange aS —-~U A DH UNIVERSAL AUTO DISTRIBUTORS HOLDING With the AMS and Gif Filter, already on the stock exchange, the Loukil Group is to introduce a third asset, the UADH (Universal Auto Distributors Holding) which is the holding company of its automobile affiliates. It has obtained the consent of the board of directors of the Stock Exchange for admission to the Main Market of the Stock Exchange for the 30 800 000 shares which constitute the current capital of the UADH company, as well as the 6 153 847 new shares to be issued within the framework of the increase in capital, ie a total of 36 953 847 shares with a 1 Dinar par value each. The overall offer covers 12 307 694 shares, representing 33.31% of the share capital after the increase. The introducing broker is Attijari Intermediation and the evaluation was done by Attijari Finances Tunisie. UADH will be the first new stock to be introduced on the stock exchange since the beginning of the year. Emanating from the Loukil Group, the UADH, created in 2013 within the framework of a legal restructuring, is part of the group's new strategic vision whereby the diffe- rent activities are being organized on the basis of the different business linesThe UADH automobile pole has been prioritized and is expected to develop sustaina- bly and has 8 branches either directly or indirectly which represent 4 brand names, ASS CITROEN osauromosics mazDa + Citroen and DS: AURES Auto and AURES Gros. + Mazda : ECONOMIC Auto and MAZDA Details. + Renault Trucks and TCM : LVI and TRUCKS Gros. + GIF Filter: GIF Filter and GIF Distribution. "UADH is the 1* integrated automobile operator in Tunisia" «First integrated automobile operator in Tunisia, UADH, declared Bassem Loukil the CEO, under its great pole has five leading international and most prestigious brand names in the automobile, industrial vehicles and filters sector. The group's synergy enhances the performance of each brand as well as the good image it acquired and provides overall support at all levels for each branch. Gaining the confidence of great international brand names, by complying with the required standards, being successful in the filter industry and earning the support of its clientele is for UADH a challenge which is taken up daily. We have our skilled teams who work on the basis of the values of excellence for which our group is renowned». wore adh.tr FluadnDevelopment: AMI Africa is under-represented in the new AlIB, but that doesn't necessarily mean it will be neglected. Will the Asian Infrastructure Investment Bank take attention away from Africa? Viet states such as Kazakhstan and Kyrgyzstan, the Asian In- frastructure Investment Bank (AIIB) has attracted diverse members. But among the 57 founding members an- nounced in April, only two are from Africa. With just South Africa and Egypt being named as members of, what's been touted as China’ rival to the World Bank, there are fears that ‘Africa could be overlooked in China’s latest push for multilateral influence. “I think African governments and the private sector should be raising the flag and saying “how nice that Asiais getting this, but how will wwe benefit?” says Professor Stephany Griffith-Jones, Financial Markets Program Director at Columbia University’s Initiative for Policy Dialogue. “Africa needs to say “don't forget about us, because we have the biggest needs and also a lot of, pportunities.” The AILB will have initial capital of $sobn and authorised capital of sioobn. The Asian Development Bank estimates thatthe region needs to plug an $8 trillion infrastructure gap from 2010 to 2020, Meanwhile, the World Bank estimates that Africa has similarly towering needs of $93 billion annually until 2020. With such fierce competition for funds, a solely Asia-focused bank right be expected to divert attention away from Africa’ infrastructure concerns and the existing institutions that serve them, However, Hongying Wang, senior fellow at the Centre for International Governance Innovation (CIGD), says that the founding of the AIIB is more likely tobea spur for greater infrastructure investment among rival banks than a source of competition. “Ina way I don't think it's a zero sum game, that ifit is going to the IIB, it’s not going to other banks, she says. “It's very possible that these banks, if structured and governed well, will attract money that may not have gone to infrastructure at all” Wang says that despite an initial focus on Asia, China is likely to expand the bank's remit a move that could benefit Africa. “I think it’s been clear from the beginning that the Chinese government really want to make this as multilateral and multi- continental as possible. In the long run, this could be China's effort to have a kind of global reach, I don't see this as anything that would come atthe expense of China's relationship with Africa.” That is certainly the hope of African Development Bank president Donald Kaberuka, who told Reuters that he hoped the bank would take a “broader view of funding infrastructure in Africa” and would expand its mandate to other parts of the world After global rush to membership that took both Beijing and its rivals by surprise earlier this year, Kaberucka was joined by World Bank president Jim Yong Kim in offering a cautious hand of friendship to the new institution. Kim pledged to work with the AIIB to improve governance and environmental standards ~ a pointed reference to US criticisms that the bank will lack the safeguards ‘of Bretton Woods institutions. ‘As well as altering China's relationship with the existing Western-backed development institutions, it remains to be seen how the AIIB will work alongside Chinese-backed institutions such as the New Development Bank ~ commonly known as the BRICS Bank - an institution which features a prominent role for South Africa ‘As well as matching the initial ‘iobn investment of the other four ‘members, South Africa will host the New Development Bank’s African regional centre. “I think all the enthusiasm and. focusison the AIIB, but think they will run in parallel,” says Griffith- Jones, “Because it’s in the long-term “Idon't see this as anything that ‘would come atthe expense ‘of China’s relationship with Africa” Right Africa under She Al may Invrastructure Investment.interests of China, Brazil and Indi, I ‘would have thought that they would find a mechanism either through the learly the BRICS bank jor Africa, But abit ofa delay in terms AILBor mo 0 leverage fundin of policymakers’ attention. CIGI's Wang two institutions could work hand in-hand too, with the AITB focusing on China’s Silk Road ambitions in Asia and the New Development Bank working primarily in the Global South, Given its role in both institutions and the absence of fellow sub- Saharan African nations, South Africa may be expected by some to assume the mantle of ‘voice of the believes that the Mamphela Ramphele, a forme managing director of the World Bank, thinks that the country would be better off re-evaluating its own. motivations for joining, and says that African counties need to re-think their role in international forums whether Western- backed or Chinese “South Africa has done the right thing I guess by joining, but did they ask themselves what is it we want to get out of this programme? Because il seems to me well, China is setting ap this, we want to be friends with China therefore we join. If that’s the reason then we're in trouble. But if they've gotten into the ATIB with a strategic approach to development that this bank will add to, then we have a different ball game’ For Ramphele, regardless of China’ intentions, Africa will need to engage with the AILB with far more strategic purpose than it has with development instituti date~ starting with sending the most to competent people asthe continent's representatives, “We need to sit down and decide for ourselves what itis we'd like to accomplish by being part of international development sid finance or the IMF or whatever entity ~ right now we are only there because those institutions are there, she says.Sponsored Profile Verifone is a leading brand in electronic point-of-sale terminal technologies and has the African markets firmly in its sights in order to further deepen its global reach. Talking with Ozgiir Ozvardar, general manager of Middle East and North Africa (MENA) for Verifone, Stephen Williams. learned more about Verifone’s objectives in the region. Bringing payment technologies to Africa hile Africa fs still very much a cash based economy, that is changing, and changing fast with the increasing use of debit cards as a safe alternative to paper money. But {as noted by Ozgir Ozvardar Verifone's general manager for the MENA region (which also neludes territeries in South Attica), many ATM transactions in Africa are made by cardholders to withdraw ther salaries Nevertheless, he says, when you consider the huge growth in payment systems in Africa, these are exciting times for the industry. ‘Consumers in Africa are eager for new technologies that make therr lives easier,” Ozvardar says, “and they adapt easily to change and new ways of doing business That's why Verifone, as a global leader in payment sen technologies, offers our clients the best solutions to fulfll their needs ‘Our prime focus is offering multiple solutions to both banking and non-banking customers, Included among these offerings are Our new voucher solutions, as well as bill payment, tax collection, government subsidies programme solutions, and so fon. I would say that our business in Africa is comprised of 60% banking and 40% non-banking customers" The statistic might come as something of a surprise as one might think that, as a supplier of payment terminal solutions, Verifone’s business growth within Africa reflects growth in the continent's retail sector. But Ozvardar daes not completely hold with that analysis, “We are undertaking many government projects, and we are handing bill payments and subsidy programm Banks are offering our terminal solutions not only to ther large retailer customers, but also to ther customers in the hospitality industry as well as merchants of all sizes in a variety of other industries. So | believe that our growth is reflective of other sectors and not simply limited to the retail spa However, Africa already has many sophisticated mobile applications, and that raises the ‘question, “what does Verifone bring to the continent that s truly movative?” Responding to this question, Ozvardar explans, "We offer a mobile money transfer service that consumers can use with their emart phones as well as older devices, and we are also working with Airtel, one of our newest partners in Africa. This is lust one example of the innovation we bring to this region, which is applicable to numerous market segments. This is a fast-moving market and we intend to stay at the leading edge of the imovations that are powering it” Yet itis undoubtedly true that mobile money has been around for a number of years, bul Verifone brings somethng to the ndusty n ierms of a huge network "Across the world we currently have more than 27m installed terminals,” Ozvarder ponnts out ‘Through our vast global footprint, mobile phone companies and application developers have the abilty to efficiently penetrate markets on a large scale. “For example, i you develop ‘a mobile app and want itto be accepted in Alrica or in any other market for that matter, come to us and we can make it happen. By supporting the app with Verifone’s terminals, the app can be accepted and brought to market very quickly. This makes it much easier for mobile companies to roll out a service, to go live and foreach customers ina veryhort time.” With the Verifone and recognised around the world for its highly reliable, secure and user-friendly solutions ~not to mention its global footprint ints - itis hardly ing that the company h en involved with the innovative fagramme in Nigeria that issues a MasterCard-branded electronic card, which doubles as a ratio Jentity card, The national n Nigeria s a pro} losely involved with. Ma is supplying the cards and we are providing the technology. our terminals incorporate biometric readers that check fingerprint je capture rely decrypted an Identity Management Commission Meanwhile, in Egypt, Veritone’s sortable d ored electronic paym system. The system facil the state-sp Egypt's entre retall gasoline and etroleum market to an el ayment system ‘The development of an electronic payment sy: tended to help the country regulat istibution and onsumption of petroleum ‘oducts and reduce smuggling ‘smartcard-based system ensures thal Egypt's Petroleum and Finance Ministries can contol value of gasoline tems that by Veritone n governments to collect income tax some are beng rolled out m Nigeria for the federal government mote and more of Atrica’s economies are being digitised and automated, there is a justifiable worry about payment data breaches and oyberer When African Ozvardar what Ver cer asked ifone was dong threats, he fold the magazine: “As a global leader of payment systems, our ninals must comply with t latest security standar certified as doing so. is in Vetilone’s DNA ar absolute priority ‘And Ozvardar sees the payment industry evolving over the next five Fs to become draws atiention to Apple's iPhone 6. and the Apple Pay app that, as it begins to be used by more and more consumers, will vansform the industry ¥% the future of payments sysiems 's decade will be the most dynami¢ and important in the history of payments, with the convergence of electronic payments, digtal comm Credit slip analytics and along with contextual n digital advertising, coup. ‘al media," he aver will see mere mobilly in ing, and Many 0 the benefits of shopping nine reality in brick ight future In fact, his year, Veri Unveiled a marke nto sale) system ung Galaxy Tab Alive tablet with -rich screen for comfortable viewing. It en: lers to deliver value-add argeted marketing January fone and Samsung advertising is new offering will also support Verifone’s Secure Commerce Architecture (SC solution, which elimina ter payment data ted point of of cone the merchant's integr 2 (POS) system, to the merchant ssor. By decoupling payment data from the IPOS, SCA eliminates the potential for payment data to be cal, further evidenc ‘mportance when it comes to payments and sec Stephen W urilySponsored Profile Dr Samura Kamara, Minister of Foreign Affairs and International Cooperation for the Republic of Sierra Leone Strengthening Africa’s Resourcefulness and Creating Unity of Purpose Yu + Samura Kamara i Siera Leone's Miniter of Foreign Allis & rcernaonal Cooperation Hei also a candidate forthe presidency dafthe Aican Develeomert Sank (ADB) He racertly decuszad ‘sion for bath Aiea and the Bank vat Stephen Wiams ‘As a former Minster of Finance, the Governor ofthe Gentral Bank, and now in hie current capacity as Foreign Minister, Dr Kamara has played ‘major role inte revtalsation of eth Sierra Leone's domestic ‘economy and ts commercial relations withthe region, continent ‘and beyond. He led his country bback Fem evil nar and through the tecery Ebola crisis —bath care challenges requiring fengoged and sophisioaed international eaorcination “belive the Prien ‘demande eameane who not only hat a deco understanding of the compiextiae of finance and ‘e0oncmice, but algo wile a ppowertl voices forthe needs af all Aicans en the intemenional stage.” DeKamara soid. "Through his ‘achievements, President Kaberuka showed us how the AIDE'S veice ean be used elect postive cchanga, and | bevel vill Eng ‘imiar earsmitment of inalact, passion and uly tothe job” Dr SamuraKamara's passion for development is clear from the moment he begins to desenibe hie career: “Since Ifinchec Uuniverey, my ile has been epent desing wth dvelopment My thesis was on the monstary Unification of Wet Attica We have not succeeded yet, but I belive that one way to puch forward Atican developmertis through monetary integration Dr Kemarahae a weak of experience in various government postions, including as Central Bank Governor, elemete exeoutve deste for Aiea athe IMF and Minister of Finanes andl Eecnamic Developmert belare becoming his country's Minister of Foreign Afi and Intemational Caopertion, Minister of Finance, he chaved the Ainean Caueus constituency ‘meetings two yearsin a row and (tided negotiations tha resulta In nea geting athird char onthe World Bank Execute Boord and a Second Alternate Chairin the ME Execute. Thvoughout hs 26-yex career, Dr Kamara has eolaberated and) negatited with qlcbal leaders to solve some of Sierra Leone's and Africas biggest development and recource mabaication challenges and is among the most experienced candidates to lead ‘he Afican Development Bank When it camesta hie vision forthe Bank, Dr Kamara believes itmmust cortinue to focus an the kay piles et forth in the “Ten Yaar Strategy’ advanced by curent ADB President Donald Kaberuks, while decertralsing and bolstering the institution’ leadership role on the continent He recently wrote There are four key areas within [te Ten Year Stategy? where I believe the Bank chouls focus ita efforts: fighting inequalty, sion and ingecurty, deepening mnfastusture evelopment and Atican tegration: prometing private ‘sector development and economic divereticaion and promoting green growth and sustaining iveihoode Through decontalcaion, the Banke able to work with te ppariner to produce higher quality projects with beter project d ‘and supervision that can b¢ implemented a much shorter time fama. Decantalition ‘also brings about a number of benefits for the ncividua regione ‘sit allows for greater capacty bauileing and provides many mere oppertunties infield ofioes* ‘Ae bath a former boars member and client ofthe Bani De Kamara has the unique perepeative of both serung the interests ofthe Banks haldare and mobilising ite resources for natione emerging ‘tom cont. This has given him both unique grasp on the Ba mechanisms and procedure, and ae the key archtect of Sierra Leone's historic and unearaieled ‘economic recovery - ara hand Understanding of hw t can help solve many ofthe problems ‘Ariean nations face today. He led the develonmant of hie nation's interim Poverty Recuction Strategy (-PRSP), which helped Siera Leone recover fram tha brink of war eeonomic eatastraphe, ‘and subsequent iniaives fecusing on tha "software" of post ‘conflict developers, intuding basic education andheathoare facilities, accountable economic ard political governance, andthe Greation of new social safety neta Most recerty. Or Kamara helped devise and complete Sterta Leone’ latest post-war recovery plan, the "Agenda for Prospeniy in 2018. Inthis rnstance Kemara focused on the hardware" of economic development, ntancfyng work fon the construction of roads andl energy facltes and creating inoentive for foreign direct svostmant in mining, fishing, agribusiness and real setate velopment, posing the way fo the next decade af growth Kamara views the biggest chalenge to atvacting invars invootment to be balancing fi baley incentives withthe need to (generate reverues rom taxation Simicaly, Kamara thinks that forthe AIDBto address emerging challengesin Afiea, addtional revources must be mobliged within and outside the continent. He also cautions that abalance neede tobe found: "Tobe effective, the AIDE needs to mantain a cuture hy iplned and reepects the ict rak-managoment peace required ofa mar financial “Yel, atthe came time we needio create a dynamio, open environment that gves the ADB's stall the freedom to innovate adopt and develop new ideas t0 addeess chronic and emerang challenges in Aca In thi regard, Kamara belive thatthe ADB precidont make a dilerenee through uty among the Bank's vanous constituencies and developing culture within the Bank thet both applies financial est pr and encourages new and creative “Ihave seen the Bank's ability tomake a profound difarencein the ives of people in Siera Leone and aoraee the continent. Believe & must cortinue toplay a cartal olen advancing the commen objectives ofthe African people.”up Africa’ infrastructure The au's Ling Ae seca ike a pipe dream today, but the building ofa ral ink from Kenya's port of Mombasa to the apital Nairobi, EEOMEBETEY, Is under way, and grand visions for the Wwatertoler. future arein rich supply.Markets: Infrastructure Across the continent, African governmentsareattempting to rewrite their geography with ambitious infrastructure projects in road, rail, ports, power, telecommunications and water ~ initiatives intended to underpin rapid growth, transform regional and national economies, and ‘open up new investment prospects. ‘One ofthese visions is the Africa Express Rail, which was outlined in an Agenda 2063 “email from the future” presented by Nkosazana Dlamini Zuma, Chairof the African Union (AU) Commission, in January 2014. “The African Express Rail now connectsall the capitals ofour former states,” read the fictitious future email. “It is not only a high-speed train, with adjacent highways, but also contains pipelines for gas, oil and water, as well as ICT broadband cables.” Four months late, a similarly lofty ambition was promoted at the AU headquarters by China's Premier Li Keqiang, a man Chinese media have dubbed the “high-speed rail super- salesman”. Backed by an extra siabn in funding, this Chinese-supported vision of broad infrastructural construction followed s20bn in loans promised by President Xi Jinping in March 2013, Indeed, China could be a crucial partner in Africa's ambitions. China built its own 12,000 kilometre high- speed rail network in and, as with the Chin: Nairobi-Mombasa railway, Chinese companies are secking to engage in similar projects around the world, including in Angola, Ethiopia, Nigeria, Kenya and Zimbabwe. ‘The AU’s Programme for Infrastructure Development in Africa (PIDA) meanwhile has alist of s priority infrastructure projects needed by 2040. Altogether, the proposals would cost over s360bn, with s68bn to be spent by 2020, covering sectors from energy, transport and water to ICT. ‘The World Bank estimates that improving infrastructure could boost economic growth across Africa by ‘yus president Power africa {nltiative which bangs $zbn of commitments by 2% each year, while PIDA estimates an African regional transport integration network could bring si7abn of efficiency gains while boosting trade hetween African countries. Transport costs for Asian firms are estimated to be 70% less than their African counterparts, while the costs of expensive and often interrupted power make it harder for African businesses to compete with ‘more efficient pasts of the world. Finding funding Finding funding fo big infrastructure deals can be tricky, but there are various potential sources of financing, depending on the political, regulatory and economic landscapes. Overall though, domestic financing (usually governments) typically pays for up to 50% of the projects, share expected to rise as tax collection increases. Multilaterals such as the World Bank and the African Development Bank (AfDB) also play a key role among a plethora of multi-partner nitiatives. The AU invested s1.sbn in infrastructure projects in 2013, while its Africaso fund aims to raise siobn in equity funding. The G8 countries, South Africa, the European Commission and regional development banks have also joined the multilateras inthe Infrastructure Consortium for Africa (ICA), which recently published its 2013 annual report, putting infrastructure financing commitments at $25 3bn. ‘This includes US President Barack Obama's Power Africa initiative, which brings s7bn of commitments from US government agencies. China, India, European countries and the Arab co-ordination group of funds and institutions contributed ssabn of funding commitments in 2013, ‘Africa's infrastructure projects receive significant private sector funding too, which totalled s8.6bn in 2013 according to the ICA, pushed up by programmes such as South Africa's Renewable Energy Independent Power Producer Programme and large Nigerian ports, ParticipantsLeft: Laying infrastructure - Workers assemble pipelines near Abidjan. include investment banks and specialised institutions. Forinstance, ‘Qala Holdings says it has invested sz4am in refurbishing the Rift Valley Railways in Kenya. Actis, meanwhile, is a leader in power investments, having brought Ugandan power firm Umeme to the securities exchange in 2012, while its Globeleq power company operates over ,000MW ‘of power facilities in five countries. Several governments and parastatals have also issued infrastructure bonds. Kenya, for example, has raised over stbn in bonds for roads, energy and irrigation, and the Kenya Electricity Generating Company has announced plans to raise $5.bn through a mix ‘of debt and equity. South African National Roads Agency (Sanral) and power utility Eskom are also well known in bond markets, and other parastatals, such as Namibia's Nampower, ate following their lead Roads to trouble Africa's infrastructure projects have several funding routes, but there are also many challenges. According to ICA's latest annual report, disbursements in 2013 were sut.gbn, down 11% on the previous year. According to the group, “ICA members identified the enabling envionment as the biggest challenge in project preparation, including ensuring the right attitudes, policies and practices with stakeholders.” ‘Other key bottlenecks are the high- risk early development stage and project preparation, ‘Mark Ford, managing director of consultancy Cross-border Stages of an infrastructure project ‘Usually the test step In an infrastructure project comes when government planners recognise the need fr future Infrastructural needs. The government then decides whether to build and finance the proect itself or bring in private partners for any oral of designing, financing bllding and operation. Different stages of the project have diferent risk profiles and attract diferent kinds of private investors. The construction ‘hase, for example, is typically higher risk and may be Appropriate for an investment bank, although global tightening ‘nbanks’ capital and other controls ae causing some to pull ‘back, with specialist funds and financiers stepping into fill the gap. Well-structured infrastructure projects can offer along and planned ifetime, steady and distributable cash flows, inflation- adjusted rtumn or rising coupons and dividends, and fortunes lncorrlatedto those of world equity markets. Different investors have different ideas ofthe isk and ‘duration they want for thelr Investments Private Investors such as rich individuals usually want thelr money back in ive to seven years while earning high returns similar to those on private ‘equity. Development finance institutions tend to want to ext theirinvestments in 10-15 years, while governments, pension and insurance funds canbe the most pation, walting 20:30 Years forrturns. When the same project sponsor builds and runs the whole project, they are ncontvised to construct in away that ‘minimises later running costs. Typically, aftr a predefined contract period, such as 30 yeas, project ownership and ‘operation couldrevert to government. ‘ne key eriterion for success is that investors trust thatthe project's parameters, contracts and user fee agreements wil not ‘change during the feof the contract. Governments sometimes ‘offer to mitigate the risks, for Instance guaranteeing revenues {usage is lower than forecast. Governments attempt to create investor riendly structures, ineluding agreeing contracts under International jurisdictions and offering regulation to ensure al partis stick to the original contract terms. The World Bank's ‘Muttilateral Investment Guarantee Agency (MIGA) can help, can the presence of the Arican Development Bank. However when a projects too investor-friendly and costs the sponsoring government inflated sums or allows user fees trrise "apaly with te improvement Inservice, taxpayers and users ‘may protest. This eat Toad to lost revenues of a contract belng deemed irregular and canceled. Cross-border projects are usually significantly more complicated than those within a single country. IOAN BANKER 2ND QUARTER 2015 $3 Information which works with ICA, says: “It seems that the public and private sectors share similar frustrations when it comes to project preparation, a process which may eat Lup 715% of total project costs” Other frustrations are more political and regard how infrastructure ought to be delivered and sustained. Safe and affordable water, for example, is recognised as a national and international human right but the poorest are often in remote areas and the most expensive to reach. Poor governance in many countries may also interrupt privatisation and the cultivation of partnerships with other organisations ‘Challenges can further arise over public private partnershipsand how projects should be paid for. One issue is that populations do not always agree with paying to use services they think should be covered by their taxes. For example, South Africa's Johannesburg-Pretoria and other toll roads were held up by protests for ‘months before going livin December 208 "Amidst these opportunities and challenges, it seems that ensuring ‘Africa gets the infrastructure it needs largely depends on effective project planning, management, and stable politics. Learning from experience, keeping project structures simple and government policies standardised can help speed up the roll out, as can keeping costs down. If Africa can get this right, the ‘underpinnings for continued growth, trade and connectivity may be closer than they seem. Tom MinneyMarkets: Insurance Takaful operators are eyeing the continent with great hope, but there are challenges along the way The rise of Islamic insurance lowly but surely, Islamic in- surance ~ known as takaful = has been growing across Africa in recent years. Based con centuries-old systems of coopera tively paying into a fund that is then paid out in ease of emergency, takaful companies are gradually expanding around the continent. North Africa tends to lead the market, though “ther countries and regions are fol- lowing in its wake. ‘The rise of takaful in Africa follows a rise in Islamic insurance globally. As a report compiled by Ernst & Young reveals: “With the continued buoyancy in the estimated s2 trillion global Islamic finance markets the global takaful market is estimated to continue its double-digit growth momentum of about 14% in 2014. By 2017, the global takaful industry may reach over s20bn” ‘African insurance companies have understandably been keen to get a piece of this action. “We sce almost a new takaful operator being established in Africa each month and are monitoring the situation closely in Morocco, Tunisia, Kenya, Nigeria and South Africa,” says Mahomed Akoob, Managing Director of Hannover Retakaftl, a subsidiary of the German reinsurer, Hannover RE “In respect of takaful, we have seen a gradual increase in the gross contribution income in Africa since 22009 to date Sudan leads the African region with a gross contribution Income of $363,4m in 2010 followed by Egypt with gross contribution income of $58.9m in the same year. However other countries such as Kenya, Nigeria and Tunisia have also entered the takaful industry.” ‘Akoob suggests that the likes of Nigeria, South Africa, Kenya, Ethiopia, Egypt and Algeria hold ‘out the most promise given the siz of their economies However, for all the opportunity and potential, the takaful industry in ‘Africa is Faced with many challenges going forwards. On the regulatory iront, the absence of frameworks and inconsistency of regulation isa major issue. ‘Additionally, new solvency requirements for insurance firms under the Basel III Concordat and its attendant increased capital adequacy ratios could impact the industry. Many african markets may also be affected by commodity price volatility and political uncertainty ‘And the nascent takaful industry is additionally faced with a shortage of Shariah-compliant investment asset classes, a relative ack of innovation and a current shortage of expertise. ‘Akoob also warns that it may take some time for larger groups of people in Airica to learn about and turn to Islamic insurance. “Is [the takaful industry in Africal growing? Yes, but don't expect Muslims (or those interested in ethical finance) to come running once takaful operators start offering Shariah-compliant solutions,” he warns. “Awareness must be created and benefits of these solutions must be explained progressively.” An unsure future Despite various challenges, many expect the takafal sector to continue to grow significantly in Africa over the next decade. Part of this, however, may rest con how governments and regulators position themselves in order to encourage further development of this sector, ‘Akoob believes that to help foster the growth of takaful in their countries, governments will have to, amongst other things, streamline authorisation processes in order to attract new market entrants Governments may also need to work closely with the insurance industry to ensure consumers are able to access insurance products easily and have suicient information to make the right choices to match their needs. Ultimately, Akoob insists thatthe contribution of Islamic insurance to the development of investment, economic growth, personal insurance and the pension fund industry in Alrica should not be understated. “Lwould say that takaful would supplement the system of social protection. “The industry would contribute to the modernisation of financial markets in Africa and facilitate firms’ access to capital. Insura ‘would also raise stable consumption throughout the consumers life. And ‘more importantly, the insurance/ takaful industry will create jobs in Africa.” Mushtak Parker “Twould say that takaful would supplement thesystem of social protection” y / Richt: Kenran herders examine ash vouchers from Fakatul insurance trie, a Fecelving th payouts from Fistrance scheme.Rather than compete at home, some East African insurance companies are looking to new frontiers, East Africa’s insurers look south Experiencing rapid risen take-up of insurance, optimism in Kenya's insurance sectors riding hig. In 2013, Kenyan insurers reportedly recorded a 20% increase in gross written premiums to reach $1.1bn, and progress since then s beloved to have been just as strong. Howover. these Impressive results conceal anundereutrent of movement as the sector reposition itself for greater competition, Some insurers seeking out funds for expansion and there have been numerous mergers and acquisitions. But ‘Some lesser known insuranee companies have opted to look instead to frontier markets in southern Aiea. Kenya's Real Insurance and Mayfair Insurance set upoicesin Mozambique and Zambia respectively in 2010, while Phoenix Assurance has entered Zambia, Botswana, Mozambique and Namibia, wth plans for ‘Swasilnd in the pipaine "East African companies have always focused in thelr nelghbourhood, few have gone beyond Rwanda,” says Group Managing Director at Phoenix Assurance Group (Africa), Suresh Kumar. "in the southern Africa region, the business culture is very iferent, Each country has its own pecullarties but the insurance bnowledge [high espectalyn Botswana, Namibiaand Mozambique. And the kind of activity is unbelievable.” Mozambique for instance, Is said tobe on the cusp of an infrastructural boom, which Kumar beleves wil position Mozambique a the sta of Phooniss southern Africa operations. Meanie, the insurance companys decision to enter southern Affican i also informed by Impressive oll and gas discoveries inthe region. As one of the frst East African companies to enter the kes of Botswana, Namibia and Swaziland, Phoonlx hopes tocaptaleeon rst mover advantages Phoenix is much smaller than the behemoths of southern Afican insurance industry such as Sanlam and Hollard, but Kumar sees tis asa positive. "When you ate big ship, takes time to tur around Whereas a small boat ean turn around much he says.Billions are being raised by companies across Africa as. investors queue up to get in on the action, Private equity firms awash from IPO flood w _frica-focused entrepreneurs are raising hundreds of La) millions of dollars to seize EP investment opportunities through a rush of listings on secur ties exchanges. Across the continent and internationally, leading private equity firms are playing a starring role in Africa’s soaring growth and are helping to bring promising firms to market in initial public offers (IPOs) of shares. Eager investors ‘meanwhile are queuing up to get a piece of the action. On 3" April, for example, emerging markets private equity specialist Actis announced it had sold i's Edita Food Industries oversubscribed offer of pptian Exchange (and global depository receipts in London). Acts sad it had invested stoam for a 30% stake in June 2013. The IPO market capitalisation of s8gom thus represented a healthy profit ‘Actis Director Sherif Ellcholy said: “Since we invested, the business has launched its new headquarters and logistics hub, increased production capacity with a major investment in anew factory, and...the management have brought corporate governance standards up to international levels The strong interest received for the PO signals significant appetite from both Egyptian and international institutional investors.” Next in line for a similar fate ina heavi could be Egypt's medical laboratory services firm, Integrated Diagnostic Holdings, which in April 2015 announced that it was pushing ahead with a London Stock Exchange IPO and listing in May, with a dua-listing on the Egyptian Exchange set to follow. The offer is likely to consist of 50% of the shares, valuing the company at some $600m, ‘Medical laboratory services firm. Integrated Diagnostics Holdings (IDE) is planning to sell part ofits holdings too. The company offers genetic tests, diabetes diagnosis and basic radiology, and by September 2014, had 283 laboratories in Egypt Jordan and Sudan, performing tests for 4.1m patients. Actis had also bought 21% of the company last December from Abraa. The IPO was planned for January or February this year but was pushed back ‘Across Africa, total of suabn was raised through 24 IPOs and further offers of shares in 2014, according to IPO Watch Africa 2014, publication put together by accountancy and consulting firm PwC. It says the total raised in 2014 was equivalent to the combined total for 2012 and 208. IPOs accounted for $1.7bn of this money raised, up from so.8bn in 2013, Listings on the Johannesburg Stock Exchange accounted for 44% oftotal PO capital, and South Africa contributed 87% ofthe sogbn raised through further offers There is little sign of the tide 1Posaccou Torsi:fon of ths money ralsed up from $0.8bn In 1.7bnturning in coming months, although the first quarter of 2015 saw some drags amidst political uncertain Nigeria's elections, and currency volatility asa result of commodity fluctuations Law firm Baker & McKenzie forecasts 30 IPOs for African domiciled companies in 2015. South Africa, Nigeria and Kenya are likely to be key markets, while other hot spots could include Mauritius as a popular offshore listing location, Morocco and Tunisia. After afew years of turbulence, Egypt’ returned stability is also reassuring investors (see table), Key sectors to be targeted are forecast to be financials, real estate, energy and power. Baker & MeKenzie expects six cross-border listings and for African businesses to raise capital through listings in London and Frankfurt. A announcement by East Africa's regulators that they will finish harmonising regulations by June 2015 means cross border listings will get easier in four securities exchanges Koen Vanhaerents, global head of capital markets at Baker & MeKenzie, says: “While there have been several false dawns for capital economies and making predictions 4s notoriously difficult, we do see a more sustainable trend developing There are sound footings based on a zange of factors, including improved corporate yovernanee, belter market regulation and of course reasonable économie growth in many countries. ‘One pul factor for the increasing tide of IPOs on Africa exchanges is domestic institutional investment giants who are growing fast and thirsty for investments. Pension funds in South Africa control s32abn in assets under management and the next nine countries add another 457bn (figure at December 2013). In countries such as Nigeria, local pension funds are growing at 30% a year, fuelled by recent regulatory reforms, and reached sasbn in December 2013. Ghana's pension industry ose 400% from 2008 0 2083 to reach s2.6bn, Economist Charles Robertson of Renaissance Capital says pension funds inthe six largest sub-Saharan African markets will grow to s6aabn in assets by 2020 and {0 $73 trillion by 2050. Rising deals Private equity has been driving much ofthe investment action into African businessesin recent years and is also wel placed to make the most of the new trend towards IPOs, Exits using the securities exchanges picked up in 2014 and the trend could continue in coming months. In June 2014, Actis announced ithad sold nearly 46% of Uganda's electricity company Umeme for s9sm after an oversubscribed institutional offer with Investec Asset Management and the Ugandan National Social Security Fund as major buyers, followed by a public offer. It had previously listed Umeme on the Uganda Securities Exchange in 2012 in an oversubscribed IPO, followed by listing on the Nairobi bourse. The following month, Actis saidMarkets: Private Equity that the private equity consortium investors it led, including Ethos, had partially divested a stake in South Africa's diversified financial services group Alexander Forbes through an oversubscribed offer on the Johannesburg Stock Exchange, valued at s803m. Emerging Capital Partners (ECP) sold out of Tunisia’ Societé d’Articles Hygiéniques in private placement and a heavily oversubscribed IPO in January 2014, which valued the company at $164m, giving ECP a cash multiple of 2.4 times. The Bourse de Tunis also scored a heavily oversubscribed IPO for industrial paper company Sotipapier in March 2014 after Swicorp's Intaj II Fund brought it to market in an offer which valued it at $76m. The International Financial Corporation sold its 195% stake in Madison Financial Services PLC through an IPO on the Lusaka Stock Exchange, followed by listing in September. Development Partners International (DPI) used introduction tolist HomeChoice International on the JSE in December. Hurley Doddy, co-CEO of ECP, told African Banker: “Certainly, growth of local fund managers ‘means there is more demand to buy something and more fand managers are looking for investments.” He believes that as private equity portfolio companies become more pan-African in focus, there is scope for more regional exchanges as well as offshore listings. Depending on the company, he said he will look at regional exchanges such as Abidjan- based Bourse Regionale de Valeur ‘Mobileres (BRVM) as well as dual- listings on local and international exchanges. Nabil Triki, Managing Director in charge of Swicorp’s private equity, said: “This demonstrates the positive impact that private equity can have on companies in the region, to ensure both the development and the sustainability of such companies, and to positively contribute to local economies’ capital markets.” Tom ttinney “Growth of local fund managers means there is more demand tobuy something and more fund managers are looking for investments” Financials, 20% neve Real Estate, 15% Industrials, 10% oJ—~ Consumer staples, 8% Upcoming IPOs for 2015 and beyond ‘Total Maroc s reported tobe preparing tooffer upto 15% of ts shares through niPO on the Bourse de Casablanca Valued t around $80m after Saudi [Mabia's zahid Group bought 30%. ‘ine government i ald fo be planning {oprivatise 10% of port operator Marsa ‘Maroc through an Po this yea ‘sn arch the Ghana Alternative Exchange (GAX) saw Intravenous Infustons Limited suspend its 1PO after sponsoring broker Frst atlantic Brokers Lt, reportedly falled to provide ‘ {he minimuin 269s payment guarantee onthe $4.8 offer. ‘Samba Foods announced a §0.65m Ipoon the caxin February, but no Updates were forthcoming” Agricutural Development Bank was reported tobe Planeigeltzmuchedlayed $52:1m 0 forbowofthesharesonthechane ck Exchange, having galned approval from the secu ile and Exchange ‘commission In March, a AC Asset Management offered shares» Australlan-owned iron-ore explorer thuptoSominabatancedfundin irenklggetfesaures stated trading February. ‘Sn London's iM market n February STranscorp Hotel isted in January after after alsing Sta.5m in ashare ofer. nly sas of ts shares were subscribed.” exploration targets are across West {'thibo in ate 2014 ‘Aen with an ints focus on two Prospectsin Gabon. ecacish op Pos ae Indieties by iimatea po was ceayed Severs Po Value fimes ast Year unsteadying Investor fence, but In February uinster inane and Economie Development Kenneth uatambo sald was stil Scheduled forthe first alt of 2015. * Bourse Regionale des Valeur inobillres, covering ight West African ‘countries, announced ft had identified ‘around 106 small to medium-sized ‘Compantes that could qualify tost ‘onthe third tier. 59 & Power, 19% Telecos, 89% = Healthcare, 59% Iilyy Retall,3%6 High Technology, 2% Product 8 Services, 296 Baker Mekensieielsedad see ran teh og Ialathc tedster hn bo Pod surar acne Beene Bi Aner ies reputed nigra pores nsdn a Fed ace Weld fpersin what HANEA teat abo ditwouapeed osc beeen sya eee an Rab Baz anol see a « State-owned uganda Electric Generation company Limited could ist Sn the Uganda SecrlesEictangs in the next two years to rise ibn to boost jower-generating capacity to S6SMW. yom 30m. «Transport company Uda is amon Several companies that say they would iiketonst «Finance Bank of Zambla says its close to complying with Lusaka Stock Exchange listing requirements after an 10 has been flagged up since 2013. aunlecape, seated private equity fund Brat snapped up 80% of Virgin Active alt cba far ibn after the Shareholder private equlty group CVC Barner aioanced plane fal he Company on J3E by May. Virgin rout waite 20% wlth alt buying Ur the company owned by Viren sndsiseby Veen Other potential stings include White iver eboutces, wnichtsays wi itn Sohannesburg.ahd London ar Hong Kong. and Sygnia muit-management compan.JOB VACANCY 1. ony mormon lb a mio reneues Renght step ison vacancy noice COT Mir t tPA ly —— ET Uae available at your fingertips ibe to for)Markets:ADCM Summit AFRICAN BANKER 28D QUARTER 2015 61 Policymakers, opinion leaders and investors gathered in Washington to discuss the vast opportunities arising from African markets and what can be done to seize them. Soaring investor funds seek faster capital markets growth he opportunity is there but itis not being tapped. That is the message which came out of the African Debt and Capi- tal Markets Summit, which was held in Washington DC during the World Bank and IMF spring meetings. Emerging market bonds, and in particular African sovereign Eurobonds, have been making headlines over the past year, especially as yields of European and US treasuries have been at all-time lows. Last year, some sigbn wasraised by African corporates and sovereigns including a debut bond for both. Ethiopia (subn) and Kenya ($2.7sbn). Yet with falling commodity and oil prices, Giulia Pellegrini from JP Morgan raised a few red flags in terms of the headwinds some economiesin Africa would have to face if they were to keep their debt at sustainable eves. ‘The programme in Washington also focused on more general issues relating to African capital markets and what needs to be done to make them more appealing both to corporates and more open to domestic and international investors. Nialé Kaba, Minister in charge of Economy and Finance in Cote Ivoire, told a session on capital markets how eight West African countries work together to drive the growth of the regional exchange Bourse Régionale des Valeurs Mobiligres (BRVM), However, she admitted that regulation would need to be adopted and reviewed as it was too restrictive, especially for corporates, small and medium enterprises and investors, to participate in the exchange. Set up in 1996, the exchange only has 39 stocks listed although itis seeking to increase this number as well as tapping into international capital (see p64). Ngozi Okonjo-Iweala, outgoing Minister of Finance and Economy for Nigeria, painted a positive story ‘of her country. She said that she was leaving behind a solid economy, that Nigeria's economy was “vigorous and resilient’, and that the transition ‘would be smooth, The reality, however, is that and Economy for Nigeria patmed a positive peture, capital markets remain largely illiquid and do not represent the economy in any meaningful way, and worryingly do not offer a viable route to raise new capital. This in turn makes it harder to mobilise domestic eapital to fund public and private sector projects and ideas. Domestic institutional investors, including pension funds, have over $379bn in assets under management, and sovereign wealth funds created in 1s countries represent another sisgbn, but these are part of buy-sce growth, Not much of this is ultimately being invested in dynamic capital markets, other than in safe high Yielding treasury bonds. Jaloul Ayed, former Finance Minister of Tunisia, said thatthe greatest opportunity in Arica today is convergence between pension funds and private equity. Pioneer private-equity investor Hurley Doddy of Emerging Capital Partners noted how fast the market is developing with several funds achieving closes of around sibn in recent months David Ashiagbor of the African Development Bank's Making Finance Work for Africa (MFw4A) added that governments are keen to build environments where private capital can fund development and growth. ‘The African Debt & Capital Markets Summit, organised by IC Events, this publisher's sister company, was held for the first time in Washington DC. By coinciding with the World Bank and International Monetary Fund spring meetings this year it offered more chances for ministers and policymakers to interact with ey market participants. Attendees included most top banks working in Africa, key institutional investors, exchanges, private equity leaders, analysts, policymakers and opinion-leaders Key sponsors were the International Finance Corporation (IFC),Standard Bank Group and ‘Thomson Reuters, and other backers such as Nigeria’, FMDQ market and Fairfax Africa Fund. Tom ttinneyEssen) BUR ocie sitet nelelN cM Seg -so1(cle Beh eller (ol (mela opportunities could help unlock a more vibrant future. BRVM seeks distinctive future in exchange battle ee i hing eight countries, a harmonised regulatory Roeerretnta pegged to the euro, the West Afri- Fer eee Cae) Peres een tien tg child for the continent's much-her- alded regional integration projects But despite the supportiveattitude CeCe eRe! they will come” approach to market Pree ts Ripert Pee eee nr eae Peterman eetnaty Abidjan, the Bourse Régional des Sree eey Cee ee cteros Perr nent EE en St eese tae that newly established companies and Seon eer erties) can go very quickly to the process of Tec ent) Lenetrtnte te eens conan) Peat arene eT ar] Peenne erect trates Praises arn Pecans eee) that it could capitalise further on a new wave of African IPO activity Deke TEL) initial public offerings and fallow-on Ere eee earn’ Peter eee et eg een tenia Pee eee ater eats own market capitalisation double eo diversifying Sed ioe pies ed local eed Pear pens Parents ree pens Pea reas Ps eee TY Amenounve believes that the key fornia BRVM region lies with risk-taking Renee eeenn etd en nace kn region to develop local firms. KPMG Pe ems Soe eres arte tn eet tes rats Petar eum tag ‘goods, financial services and other eee ets Pte rece b aera Sean e eorc Cage eens Peering een tts Pasig ce sen Vis een aod Posner ra erent ORS ose ee ete Ec them to come to the stock exchan itean bea big opportunity for us mom! in a region where large companies ceva eee tg rence res ee erenetr sd Src centers ca) ‘when it comes to funding longer- fonsmeen gers tt regional authorities will have to look yeaa gira Pee ean Pee ntecctiss Ronn ae anus about how we can force’ some ofthe big companies to come to the market ~ companies like banks, insurance ee een as Pacem cere but give them very good incentives toreg ec eee Daven iets tmnac) eC Senegalese telecoms firm Sonatel, ene! ecco Rese th ae acne eed is constantly making the case to governments and regulators for improved terms for listed firms. pieces because our partners don't like government to give tax incentives to big companies that are important contributors to the fiscal budget. ener s Pee O ne enn eed Cees rates ets RO ee aR pecan eta ea eee cas Re ake ene Conn! Peta anne Pence ees eres rete firms on the advantages of seeking, erent eats caer es ett chief executive claims that 50% of een ere Cag eng ete cen Pree ee enc Peerneiecs enn! ee oer! Creer ecrcee Tate sg Pea a oad Seer erea tance ene ts ee cece Ponca erga ee secttag Precast etd Union regulator Conseil Régional de Peete eee eens Pees aye es in the region can play a key role in pin ieee preteen every year and as a result financial Dn a Ona e financing for states. The capacity of eI eee oss Peni een eer peodenao meee tater investments at an international level from institutional investors that have eee ues Seg example, pension funds,” he told Eero Retna eee tots Rec n aaa er eee Ces preenrer seme nts ecco nCmuunctas Cra aeeete Raers Perna eta tee intas infrastructure investment. OC eee investors base, that is absolutely essential. The local debt market is Pores cn een ea tts a pure strategy of buy and hold. We can't really blame them for this, eee or eee ucruecd ee eet eee ue have greater presence on our market, money managers, pension funds ~ epee eu carn and Sacer rer n ny eats irre cre Pe eee Aan! Amenounve is secking to convince the regulator to make it easier for states and companies to avoid having to put guarantees in place before ieee eet reaty that the regulator should play the role Diem ets eats Serene? Pree teen yng acs nso ees only regulators, but also business- Eres Cee Rem nny ootnna renee Pa eer Re Cres pOernnreetea ts tt ese nents PIN vete ent teeters ticular reveals both the limits Crenct ste he eienc role it hopes to forge in an already crowded marketplace Sane Pees cme tatty the frontier, or to the pre-frontier ‘market. We consider our market a pre-frontier market, before going toa frontier market and then an emerging ea PerriAfrican velopment Supporting SMEs to drive Africa’s growth s the African Development Bank (AfDB) athe Ain Delores Henk (AID) for the 2035 Annual Meeting, the institution is readying itself to elect a new president as the 1-year tenure of Donald Kaberuka draws toa close "Among the many hallmarks of the AfDBVs activities cover the last decade have been efforts to stimulate job creation, particularly for women and youth, with support boeing given to Africa’ SMEs. ‘A programme launched in January last year isa case in point. An agreement was reached to provide two sov- ereign-guaranteed multi-tranche lines of credit (LoCs), of respectively ss00m to the Bank of Industry (BOD, and cof s2o0m tothe Nigerian Export-Import Bank (NEXIM) “The programme's objective i to support the mod- ernisation and expansion of export-oriented small- and ‘medium-sized enterprises (MES). ‘OL isthe leading catalyst for industrial development resources in Nigeria as well as being one of the oldest development finance institutions in Africa. It was estab- lished in 1964 and reorganised in 200 Thine wth ts mandsteto nance industrial develop- ‘ment projects, BOI provides term finance and advisory services primarily to indigenous SMEs, to which it de- votes at least 85% ofits resources ‘Nigerian Export-Import Bank (NEXIM) isthe na~ tional export credit agency of Nigeria. Itwas established in 991 with a mandate to provide export credit, guaran- tees, insurance and advisory service to export-oriented companies, particularly SMEs in the non-oil sector. “The LoC’s will allow the two institutions to assist Nigerian SMEs to be more competitive, to scale up their gperations and ultimately ereate more employment LoCs included a technical assistance package to strengthen the institutional capacity of both BO! and NEXIM, a elas ther Scie, vege th ‘Ultimately, this integrated financing package that the AIDR has fnded has supported Niger's efforts to diversify its economy aviay from a reliance on hydro- carbon revenues, “The LoCs addresses the severe challenges that Nigeria's ‘SMEs face in accessing finance in the country, enabling export-oriented SMEs to grow, to become more competi- tive, and ensuvea sustainable growth in employment. ‘And the AfDB has also supported SMEs in other re- gions of the continent. The bank approved a sam line of. Credit to one of Mozambique’s fasiest growing financial instttins through its private sector window to Mora “Mora Banco is actively presenti across Mozambique corporate, SME an teal banking services. ‘This sym LOC will support SME sub-projects includ- ‘The Bank’s SME Programme will offer longer-term resources to thousands of African SMEs, with the aim of creating jobs and contributing to inclusive growth on the continent. ing manufacturing, commerce/trade, services, tour- ism, construction, agriculture and transport. Economic benefits are likely to accrue to 70 SMEs to be financed adding an add urban areas. In addition, the project will induce technology and skills transfers, It is also anticipated that government revenue lines though the gowth of alealde income and! corporation taxes Tn fact, Moza Banco is part the AfDB's Africa SME Programme to develop and expand its SME financing activities and provide medium- to long-term financing ‘options to local SMEs in Mozambique Meanie n July 20, the APDB launched a fou ar, 125m funding programme (including a $308, Fechnicalasistanc package funded bythe Find for AF rican Private Sector Assistance) termed the Africa Small and Medium Enterprises (SME) Programme "The Fund for Atrican Private Sector Assistance lev- rages on the ADB's triple A rating, in as much as the tating empowers t to co-fund the initiative, tothe tune of '10.6m, in. a milateral agreement withthe government ‘of lapan (443m); the government of Austria (€1m), and Development Bank of Austria €im). The AFDB Africa ‘SME core programme aims to support micro, small and ‘medium enterprises (MSMES) in Aftica with the neces sary longer-term finance (and a technical assistance packages) to mest the challenges faced by around 25 nancial initations nd their SME cents arose Afi “The SME programme has already approved the first two ofthe snail nsittion that il benefit fom the programme's funding and technical assistance in Tanzaniaand Zambia.In Tanzania, the DCB Commercial Bank plc isa community bank that has been granted a ‘ssm LOC to uplift the standard of living of low-income ople by providing loans to disadvantaged Tanzanians trho cannor access financial services throagh normal banking channels. ‘A 315m LoC hasalso been extended to CETZAM in Zambia, a registered depost-taking micro-financing institution that lends to Zambia's micro and small entre- eneurs. CETZAM will also receive technical assistance from the Fund for African Private Sector Assistance. ‘A €25m LoC was also extended last year to Fidelis nance, a leader in the leasing mazket in Burkina Faso witha strong focus on SMEs. ‘Throughout its on-going selection process - and ‘working parallel to the AfDB's other general support programmes - the APDB' SME Programme will oer longer-term resources to thousands of African SMEs, including youth and women, contributing to job crea. tion, poverty reduction an ineluive growth on the continent, al 400 new employees in rural and 5 5Sixyears ago, when the AfDB president, Donald Kaberuka, ‘addressed a SADC international conference on poverty and development, he commented: “We will eliminate Poverty onl if our economies can grow sustainably over Several years. To maintain that path Its Imperative to steadlly continue to reduce the costs and the risks of doing business, both political and economic, while expanding the size and diversity of our markets, The ‘ADB willbe earmarking about §1.7bn for regional Infrastructure.” He was later to confirm, “we are adopting new polices to better support the middle income countries regarding infrastructure financing and non-sovereign activities, we are particularly keen to contribute to resolving the energy crisis President Kaberuka was relterating what many economists have been saying for many years ~ that the lack of adequate infrastructure is key cause of poverty. In this sense, the lack of infrastructure can be defined as meaning a lack of affordable, sustainable energy, such as electricity, as well as the transport infrastructure that ‘can underpin trade. ‘The ATDB, among the Key sectors inits poverty reduction strategy, has kdentified the electricity sub sector for attention. For example, given the lawrate “Sip of electrification in the country, Tanzania is faced with situation where it must increase its investments to ‘scale up electricity services in the rural areas, andithas Included rural electrification as one ofits main pillars of development. Earlier this year, the ADB approved the Kenya- ‘Tanzania interconnection project that will involve the construction of a tatal of more than 500km of 400K high voltage alternative current (HVAC) transmission lines in a double circuit from Isinya Substation in Kenya ‘to Singida Substation in Tanzania. 93.1 km ofthe line Is in Kenya and 414.5 km are in Tanzania. The transfer capacity ofthe interconnector is designed for 2,400 MW. The associated substation works includes the extension ofthe existing Isinya (Kenya) and Iringa (Tanzania) substations to include 400KV transformers, and the construction of anew 400kV substation In Arusha, Tanzania The project helps strengthen the regional Integration of the East African Community and will play an important role in encouraging Tanzania's agro-processing and industrialisation, thereby contributing te poverty reduction. ‘Similar projects across the continent in ereating