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African Banker du 06-10-2020

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Published 06 October 2020
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4th Q u a r te r 2020 I s su e 5 3 A n I C P u b l i c a t i o n
60 DRAMATIC YEARS
OF NIGERIAN BANKING
REGIONAL FOCUS: EAST AFRICA
CREDIT RATINGS - TIME TO CRY FOUL?
SDRS THE SOLUTION
TO AFRICA'S DEBT IMPASSE
CAPITAL MARKETS HOLDING THEIR OWN
ECOBANK’S ALAIN NKONTCHOU:
BROADBAND
THE SAVIOUR
DURING COVID
EUROZONE €8.00, UK £6.00, USA $9.95, CFA Zone CFA5.000, Egypt E£80, Ethiopia R200, Gambia Da400, Ghana GH¢40.00, Kenya KShs800,
Liberia $8, Mauritius MR300, Morocco Dh60, Sierra Leone LE 70000, South Africa R50.00 (inc tax), Tunisia DT7, Uganda USh30,000,
Zambia ZMW 100, Other Southern African countries R49.00 (excl tax), Tanzania TShs20,000. My Digi-Banking pack.
New for small businesses.
Specially designed for traders and merchants
• Business current account and saving • Access to short-term credit
account with no monthly charges* • Loyalty rewards and benefits
• Easy digital payments/collections • Free marketing/promo materials
• Smarter, safer online banking • Access to free financial advice
Visit ecobank.com/commercial-banking and contact us for more information
* Terms & conditions apply
9254_COM_DIGI_BANKING_ PACK_SME_IC_PUB_Ad_P_EN_v3.indd 1 25/09/2020 17:04United Kingdom
IC Publications
7 Coldbath Square
London EC1R 4LQ
Tel: +44 20 7841 3210
Fax: +44 20 7713 7898
E-mail: icpubs@icpublications.com
www.icpublications.com
France
IC Publications
609 Bat A, 77 Rue Bayen
75017 Paris
tel: +33 1 44 30 81 00
fax: +33 1 44 30 81 11 Cover Story In conversation:
email: info@icpublications.com
www.icpublications.com Ecobank Chairman Alain Nkontchou
FOUNDER AND EDITOR-IN-CHIEF
Afif Ben Yedder
Directeur de la publication
benyedder@icpublications.com Editorial African Banker Awards
GROUP PUBLISHER 5 Africa’s battle for a fairer deal 46 Women dominate African Omar Ben Yedder
o.benyedder@icpublications.com Banker 2020 Awards
EDITOR News in BriefAnver Versi
6 Banking sector news from In ConversationVP DEVELOPMENT
Saliba Manneh around the continent 48 Admassu Tadesse,
s.manneh@icpublications.com
President and Chief Executive, TDB
ADVERTISING
advertising@icpublications.com African Banker’s World
ADVERTISING SALES DIRECTORS 12 Who’s going where in the Law / Mediation
Medrine Chitty, Baytir Samba, Nick Rosefield
African banking industry 50 Need for mediation on the increase
DISTRIBUTION
distribution@icpublications.com
Cover Story Stock MarketPRODUCTION MANAGER
Sophie Dillon 18 Ecobank Chairman Alain Nkontchou: 52 IHS seeking $7bn US listing
PRINTERS The power of broadband 53 Listing for Rwanda cement giantRoularta Media Group
Meensesteenweg 300 54 Setting up a US dollar bourse in Victoria Falls
8800 Roeselare
Country Focus: Nigeria at 60 56 A stock exchange for Ethiopia ‘on the way’
SUBSCRIPTIONS 24 A six-decade rollercoaster ride 56 FDH Bank is Malawi’s 16th listingIC Publications
Webscribe 28 No reprieve for chronic loan defaultersUnit 4, College Business Park
College Road North TopicAston Clinton, HP22 5EZ UK
In Conversation 58 Covid impact on investment Telephone: +44 (0) 1442 820580
32 Olukayode Pitan, Managing Director banking is minimalcontact@webscribe.co.uk
of Nigeria’s Bank of Industry (BOI)www.africanbusinessmagazine.com/subscribe
All pictures AFP unless indicated. In Perspective
Registered with the British Library.
ISSN 1757-1413 Partner Insight 60 The new normal: business unusual
©2020 IC Publications Ltd 36 Living the digital future – CIB
N° DE COMMISSION PARITAIRE
0120 T 90333 Technology
Dépôt légal Octobre 2020 The Bigger Picture 62 Banks accelerating
38 IMF Special Drawing Rights digitisation in wake of Covid
o‰er Africa a lifeline
Regional Focus: East Africa
Credit Rating Agencies 66 Spike in M&A despite Covid
41 Inflexible agency stance hurting Africa 69 Secrecy fuels forex worries in Tanzania
Essay Country Focus: South Africa
44 Menace of trial by social media 72 Harsh reality forces change to IMF stanceLogo AfDB
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See the full list of winners at www.africanbankeawards.com
You can view this year’s ceremony at https://youtu.be/NgM8etiQchM
Follow us on Twitter @BankerAwards
Compete. Connect. Celebate.A N V ER V ER S I , EDITO R
Africa’s battle for a fairer deal
n addition to delivering heavy body money if they are fortunate enough to was very much involved during the
conblows to health systems around the have substantial reserves and worry solidation process a decade or so ago
world, the coronavirus pandemic has about in ation later. African countries and in fact owes its existence to the  Ialso landed vicious punches to the cannot do so without their currencies far-sighted insistence of some of the
economies also across the world. losing all credibility. major bankers in Nigeria who urged
Even those countries where the rate Africa is further hamstrung by the us to produce a dedicated publication
of physical human attrition has been fact that the premium on its sovereign on the sector. Today, Nigeria’s banking
relatively subdued – as in most African debt is higher than it is for countries industry is one of the most strongest in
countries apart from the North African which are clearly at greater risk of de- the developing world.
region and South Africa – no nation has fault. This is because credit rating agen- We also revisit our annual African
quite managed to escape the economic cies seem to have a knee-jerk attitude Banker Awards (page 46) which we had
contraction’s caused by the lockdowns when it comes to Africa and cannot see to stage virtually because of the
pannor the strains on the national purse as it through any other prism than their demic but which lost little of the
excitea result of diverting additional resources view of the continent 20 or 30 years ago, ment they usually generate.
to the immediate health needs. African countries cannot even avail It was also a pleasure to interview
The situation has been compounded themselves of the facilities on off er to Olukayode Pitan, the managing director
for Africa as the price of key commodi- delay debt service repayments least they of Nigeria’s Bank of Industry – one of
ties on which many countries depend are branded as being in default. the major winners of the awards on the
have remained low and production, As this is a serious economic life and sterling work it is doing for the MSME
distribution and export of agricultural death situation for Africa, we have de- sector of the country (page 32).
products – the continent’s main occu- voted considerable space in this issue Our regional focus in this issue is
pation – has been severely hampered by on discussing it. Dr Hippolyte Fofack, banking in East Africa (page 66)
inlockdown regulations and the need to the Chief Economist at Afreximbank cluding a story on how Tanzania seems
maintain social distancing. makes a brilliant case on how to resolve to be bucking the Covid-19 trend by
He lockdowns have wiped trillions this conundrum (page 38) while Richard simply ignoring it and getting on with
of dollars off the national ledgers of Ndem takes the credit rating agencies business. The story is very diff erent for
virtually all countries and starved the to task on page… South Africa where the state is under
exchequers of their normal tax bounties. intense pressure to haul the economy
In short, Covid-19 has emptied state Strong pedigree of success back onto its feet (page 72).
coff ers as eff ectively as if a gang of bur- For our Cover Story this issue, we had We round up a very strong issue with
glars had broken into national safes and the pleasure of interviewing Ecobank an essay on the dangers irresponsible
emptied them of all their content. Transnational’s new chairman, Alain social media attacks can have on the
That is one side of the equation; on Nkontchou (page 18). With a very strong banking industry (page 44); a
powerthe other side, expenses have not di- pedigree of success in the private sector, ful op-ed on why the WTO should take
minished but rather increased manifold his views on dealing with the pandemic Africa more seriously (page 46); Tom
as governments have had to practically and gearing up African economies for Minney’s incisive column on capital
dole out hefty handouts to employers to the transition to industrialisation are markets (page 52); Allen Choruma’s In
ensure a modicum of income fi nds its both original and thought provoking. Perspective column (page 60); and
feaway to the general public. We celebrate 60 dramatic years of tures on the rise of digitalisation (page
Governments therefore have had little Nigerian banking with an eight-page 62) and how investment banks have
choice but to borrow – or print paper spread (pages 24-32). This magazine fared during the crisis (page 58). ■
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6 A F R I C A N B A N K E R 4 T H Q U A R T E R 2 0 2 0
AFRICAN BANKER’S WORLD NEWS
THE MIDDLE EAST’S BEST BANK FOR
S AFRICA’S ‘BIG FOUR’ AKINWUMI ADESINA
IN PROFIT SLUMPRE-ELECTED AFDB BOSS CORPORATE
for an independent probe to South Africa’s ‘Big Four’ months as they navigate
replace the bank’s internal banks – Standard Bank, through further faout RESPONSIBILITYinvestigation. Absa, FNB and Nedbank – from
ovidNonetheless, running as ecerienced a rofi t sum he enders must contend
the sole candidate Adesina deeper than during the with an economy in its
received 100% of the votes fi nancia crisis in the sic ongest recession since
for all regional and non- months ended une after a eaving customers more
regional members. sie in credit imairment vunerae to oessness
“As shareholders, we charges as they graed nemoyment surged to
strongly support the bank with the eff ects of the in the second uarter
and will give him all the ovid- andemic and a according to a oomerg
necessary support to carry nationwide ocdown survey of economists
forward and implement his Their return on equity owande thomeni
compelling vision for the fe to from a anayst at ergence
bank,” the Bank said in a year earier according to nvestment anagers
statement. South African Reserve Bank said: “Getting
return-onAccording to the AfDB, data equity ratios back to decent
During Adesina’s fi rst term, A report by PwC, eves wi e ey to driving
the bank has impacted covering resuts at tandard vauations in the sector
the lives of 335m Africans. Bank Group Ltd, FirstRand o ift s ans must
This includes providing Ltd, Absa Group Ltd and mae sure that the outcome
18m people with electricity, Nedbank Group Ltd, in coming months is
141m people with improved estimates their charges better than the worst-case
agricultural technologies for soared y a comined scenarios they have factored
food security, 15m people in the fi rst haf of into their modes
with access to fi nance, 101m from a year earier whie “They have put provisions
people with access to trans- rofi ts efore rovisions away for a rainy day f the
The 2020 Annual Meetings port and 60m with access to grew rainy day doesnt come then
of the African Development water and sanitation. ront-oading credit a those rovisions wi e
Bank (AfDB) were brought The Bank has maintained imairments shoud he reeased and that wi mae
to a digital close this year its AAA ratings by all major banks produce a better a huge diff erence and a huge
by Akinwumi Adesina’s global credit rating agencies resut in the nect sic swing in earningsn
unanimous re-election by for fi ve years in a row.
the bank’s governors to The Board of
Goverserve a second fi ve-year nors approved a 125% in- Right: The Absa Centre in Cape
Town (c)Town (c)term as President of the crease in the general capital
group. of the bank, raising it from
The announcement $93bn to $208bn, the
largmarks the end of a tumul- est in the Bank’s history.
tuous period for the former Adesina said: “I am
Nigerian Minister, after he deeply grateful for the
colwas accused by unknown lective trust, strong
conwhistle-blowers of gifting fi dence and support of our
top bank jobs to his friends shareholders for electing
and relatives. me for a second term as
An external review head- president. It is yet another
ed by former Irish President call for se less service to
Mary Robinson cleared Africa and the African
DeAdesina of any wrongdoing velopment Bank, to which
after the US and other non- I will passionately devote
African shareholders pushed myself.”

jTHE MIDDLE EAST’S BEST BANK FOR
CORPORATE
RESPONSIBILITY