ON THE COVER
Slower growth is translating into lower government spending on infrastructure. With an estimated funding deficit of $40 billion a year, private-sector solutions from Africa’s home-grown pension fund industry as well as international insurance firms could help plug the gap.
With global liquidity conditions tightening, local currency bond markets have a more important role to play in financing African governments and companies. While Ghana and Nigeria are leading the way, other markets are still in the early stages. Poor transparency and liquidity, and a multiplicity of legal regimes are holding back foreign investment.
ALSO IN THIS ISSUE
The west African state has reclaimed its status as the most attractive francophone market south of the Sahara. International banks are rushing to do business there.
Egypt’s private-sector banks have traditionally been wary of lending to SMEs, but now a combination of new technology and central bank pressure is driving some of the country’s most sophisticated lenders to take a fresh look at the segment.
Cipla Quality Chemicals’ share sale is good news for Uganda’s capital markets, but is still something of a rarity. Investors have little choice when it comes to picking stocks: government borrowing remains high and puts the focus on bonds, while family-owned businesses tend to be wary of opening up to outside investment.
Absa’s efforts to establish wholesale-banking partnerships outside Africa, possibly with Barclays or Société Générale, underlines the importance of international links to African finance.
Sub-Sahara bounces back in ECR in step with LatAm, while debt, political instability and global protectionism constrain rises elsewhere.
Even though the banking sector remains off-limits, foreign investment in other state-owned enterprises will support infrastructure development.
Following in the footsteps of Egypt and South Africa, Nigeria has signed up for a currency swap deal with China, but are swaps all they are cracked up to be?
It is almost 50 years since Euromoney was born with the wholesale international capital markets, to chronicle their evolution and that of the institutions that serve them. Today, the growth of banking and finance is now arguably at its most exciting, most important – and least exposed – in Africa.