Africa News blog
African business, politics and lifestyle
Mining companies are looking more cautiously at South Africa after a brouhaha over shady deals. Media and diplomats are nervous of measures they fear could curtail press freedom. South Africans in general are wondering how much damage an ongoing public sector strike will do and whether it is a sign of worse labour unrest to come.
But global banking giant HSBC certainly seems to be taking a positive long term view of Africa’s biggest economy with its talks to buy up to 70 percent of South Africa’s Nedbank in a deal that could be worth more than $8 billion.
HSBC wouldn’t only be getting a strong presence in South Africa, though.
It would be getting a solid foothold on a continent set to be among the world’s fastest growing in the years to come and where it is coming from behind against well-established emerging market rivals Standard Chartered and South Africa’s own Standard Bank.
Particularly important for HSBC would be helping its Asian customers do business in Africa. Although Nedbank does not by itself have the presence across Africa that some of its rivals do, it has an alliance with West Africa-based lender Ecobank spanning the continent.
Nigerian, Kenyan and South African banks have been making forays into the rest of the continent in search of growth so it was interesting to see Angola’s biggest bank opening an office in Johannesburg this month.
Banco Africano de Investimentos, Angola’s biggest bank by deposits, sees the office as a launchpad for ventures further afield in the southern African region as well as in business between Angola and South Africa.
Angola’s banking sector has enjoyed huge growth since the country emerged from a three-decade long civil war in 2002 as one of the world’s fastest growing economies thanks to booming oil production and high oil prices.
Nigeria’s central bank sliced through the hubris of the business elite with its $2.6 billion bailout out of five banks and the sacking of their heads in what looks as though it could be a new era for corporate governance in Africa’s most populous country.
Recently appointed Central Bank Governor Lamido Sanusi said lax governance had allowed the banks to become so weakly capitalised that they posed a threat to the entire system, and described the move as the beginning of a “restoration of confidence” in sub-Saharan Africa’s second biggest economy.
The good news for Africa when the global financial meltdown began was that its financial markets were generally so far behind the rest of the world that groups such as the World Economic Forum reckoned that there was little or no danger. A new paper, posted on the economic research website VoxEU, suggests that that might be a bit too optimistic.
Tilburg University economist and former World Bank official Thorsten Beck -- along with the World Bank's Michael Fuchs and Marilou Uy -- write that despite shallow financial markets, sub-Saharan Africa is unlikely to escape the repercussions of the financial crisis.
from Global Investing:
Nigerian banks were advertising their services on billboards in Terminal 5 last year, and travelling investors felt it showed the banks were rashly trying to keep up with international investment banks in aiming for a global profile, causing many to sell, a banker specialising in Africa told journalists this morning over breakfast.