It takes plenty of effort, planning and time to build up a reputation, especially in the often high-strung environment of the financial world; but it takes only one or two lapses to bring reputations crashing to the floor.
I am referring particularly to the Nigerian financial annus horriblis in 2009 when ‘solid’ banks turned out to be hollow, billions of Naira worth of shares were wiped off and the stock market crashed.
True to their indefatigable spirit however, the Nigerians immediately set about repairing and rebuilding what had been one of the most exciting financial landscapes in the world.
While the Central Bank took the heavy stick to the guilty banks, the Nigerian Stock Exchange and the capital markets regulator, the Securities and Exchange Commission (SEC) set about a thorough house clearing and cleaning.
We are therefore pleased to report in this issue that both the SEC and the NSE have used the crisis and the sins of commission and omission from the past to reconstruct both institutions on a far sounder foundation and both have embarked on what now seems a very realizable goal of achieving world class status in the near future.
Our Cover Story this month is an examination of the increasingly important role that private equity is playing in Africa. Although the flows are still miniscule compared to global averages, they have been gaining in volume and more crucially, in quality.
Investments in Africa still provide some of the best returns in the world but the paucity of information on investment opportunities and the often opaque nature of the business environment in some African countries continues to thwart the realistation of Africa’s full investment potential.
Our country focus this month is South Africa. The industry there is in rude health and busy expanding both domestically and further afield. But they are being asked to play a more proactive role in the national economy. The thorny question of bank charges – some of the highest in the world – has still not been resolved satisfactorily despite several warnings from the regulator.
We also look at the shape of the industry in Ghana in the wake of the much anticipated oil bonanza. The economy is riding a crest with macro indicators at an all time high, inflation under control, higher credit ratings and growth rate for 2011 predicted at an astonishing 20%.
This comes as a mixed blessing for Ghana’s domestic banking industry which is almost certain to face increasing competition from regional and international banks lured by the prospects of a booming economy. This could lead to interest rate cuts and compel upgrading of services, products and processes. Before the global economic slowdown in 2009, the country’s main lenders were reaping returns of 30% or more.
Such returns may now be a thing of the past under conditions of intense competition but profit volumes could well rise as a result of expanding activity. The question is: will Ghana’s banks adapt to the new economic realities?
We turn out attention once more to the Indian Ocean island of Mauritius where something novel and exciting always seems to be happening. Mauritius is increasingly becoming the hub for Afro-Asian transactions. India’s Financial Services group which specializes in rolling out commodity and currency exchange platforms around the world, selected Mauritius on which to base their African operations. Our interview with their chief executive, Joseph Bosco, reveals a sharp appetite among African traders to utilize both the risk mitigation facilities the platform provides and to dabble in the gold and silver futures markets.
Our star interview this month is with Standard Chartered’s Razia Khan whose knowledge of the mechanics of African economics as well as an uncanny prescience about developing and future trends globally and as they impact on Africa continues to enthral.