Africa across the decades
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For 50 years, Euromoney has followed the vicissitudes of a continent that has moved into and out of favour with international banks and grappled with developing its own capital market culture.
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The 1970s
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Just as with international coverage of the continent more broadly, Euromoney’s coverage of Africa in the 1970s wasn’t as in depth as it is now. September 1973, however, marked the first time the annual IMF meeting was held in Africa, in Nairobi. We reported on the growing link between aid and trade and offered an after-hours guide of what to do in the Kenyan capital
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Nigeria’s second $1 billion jumbo loan was meant to run much more smoothly than the first. Instead, Padraic Fallon’s feature uncovered how, amid a fall in oil revenue and a growing cash shortage, Nigeria went on a borrowing spree and how a ‘clash of culture’ created some extraordinary problems
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In the late 1970s, Zaire (now the Democratic Republic of Congo) fell behind on its debt repayments and entered a deep depression. Corruption, conflict and western fears of a communist takeover, however, limited international intervention. Instead, all eyes fell on Erwin Blumenthal, a Bundesbank stalwart, to take on president Mobutu Sese Seko and restore order to the country’s battered finances
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High GDP growth in South Africa from the 1960s to mid 1970s tapered off towards the end of the decade. A shortage of skilled labour and rising unrest between the white minority and black majority were two of the main reasons behind the slowdown. In this supplement, Euromoney argued that unless there was a drastic change to the political and social fabric of the country, South Africa would find it difficult to recover
The 1980s & 1990s
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In 1982, the economic outlook was bleak and Africa’s sovereign borrowers were increasingly turning to the IMF for funding. But bankers were still aware of the great opportunities available to them on the continent. As one of them told Euromoney at the time: “We’re cautious in the short term, but in the long term we’re enthusiastic about Africa”
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By 1983 Africa’s over-indebtedness had reached such drastic levels that even the countries with the best risk profiles looked set to reschedule their repayments. Euromoney surveyed the continent’s increasingly unsustainable current account deficits and debt service ratios as Africa entered aa decade of limited access to international credit
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The main thrust of Barclays’ international expansion was initially in territories formerly belonging to the British Empire, especially in sub-Saharan Africa. At first that strategy proved highly profitable, as the continent’s hunger for large infrastructure projects required substantial lending. But by the mid 1980s, the bank was starting to doubt the value of a large branch network across the continent
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The banking sector set its sights on Eastern Europe after the fall of the Berlin Wall. Keenly aware of that region’s newfound appeal, Babacar Ndiaye, the then president of the African Development Bank, was eager to highlight Africa’s own potential. In an exclusive interview with Euromoney, Ndiaye argued that a change of mentality had taken hold across the continent, as governments began to embrace the private sector’s role in development activities.
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Two months after the repeal of apartheid legislation in South Africa, Euromoney visited the country to record its return to the international capital markets. The lifting of sanctions was set to unleash billions of dollars in pent-up demand and bankers were rushing in to make the most of the opportunity
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Heavily indebted and with limited domestic savings, Africa sought to attract foreign equity investors, Euromoney reported in 1994. But the continent’s equity markets were thin and illiquid, privatizations were scarce and company research was scant – problems that are still not resolved 25 years later
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The abolition of exchange controls and the start of privatization were expected to do wonders for the illiquid Johannesburg Stock Exchange. But, as Euromoney reported, fuller representation of black businesses on the equity market was a vital change that would not be so easily accomplished
The 2000s
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In a bid to establish itself as Africa’s largest bank, Nedcor made a hostile bid for Standard Bank in November 1999. Seven months later, with tensions running high between the two institutions, South Africa’s bewildered finance minister, Trevor Manuel, pulled the plug on the merger. Our feature went behind the scenes of what might have been the largest takeover in South African history and explained why it fell apart
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As more African sovereigns began to receive credit ratings in the 2000s, Euromoney wondered what broader impact this development would have on capital flows, transparency and governance across the continent. Although access to sustainable capital remains an issue today, the rating agencies’ entry into Africa looks just as momentous now as it did then
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Some of the concerns that continue to haunt South Africa today were apparent 10 years ago when Euromoney travelled to Johannesburg to discuss whether or not the country was on the brink of crisis. But failing infrastructure, power outages, rising inflation and a large current account deficit at the time were still not enough to send local bankers into a panic
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Africa’s demographics illustrated a huge banking opportunity across the continent – they still do. The environment then called for “radically innovative banking methods and technology” to serve communities that had been completely ignored. Local banks, with a deep knowledge of the financial landscape, would be the ones to bring Africa’s rural population into the banking fold
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In 2009 Nigeria suffered a banking crisis. A capital raising frenzy in the mid 2000s left banks with large amounts of cash, much of which was irresponsibly invested. As a result, bad debts rose and Lamido Sanusi, Nigeria’s newly appointed central bank governor, went on a cleaning spree in the banking sector. It started with him sacking five bank chief executives
The 2010s
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With Portugal’s economy teetering on the brink of collapse, the country pinned its hopes of recovery on one of its former colonies, Angola, “brutally demonstrating how the tables have turned for the country that built Europe’s first global empire,” Euromoney said. It illustrated a growing trend in how emerging markets were gaining the upper hand in the competition for economic power
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As Libya emerged from 42 years of bloody dictatorship and sought access to international banking and capital markets, Mohsen Derregia became chairman of the Libyan Investment Authority in 2011. He had $60 billion to invest. Two years later, Derregia talked to Euromoney about the mess he inherited
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Africa’s untapped potential and its demographic dividend continued to create a buzz. But rather than rely on international stakeholders to realize this potential, African financial leaders and the diaspora were increasingly looking to Africa to develop its own the banking and capital markets infrastructure. Euromoney looked at the next generation of African financiers leading the way
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Ethiopia’s financial sector was firmly closed off to international investment in 2015, but this didn’t stop the international community from hoping that change would come. Even before Ethiopia opened up some of its most prized assets to international investment in 2018, Euromoney explored how banks were hedging their bets in the country
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When microfinance banks in Africa speak of the rise of new technology, they usually focus on its potential and play down the risks. In this feature, Euromoney revealed how mobile phones and internet access can not only create opportunities for microfinanciers but also open them up to new vulnerabilities