Expansion, ECOBANK-Style

For a bank whose genesis is West African, it strikes as rather odd that a bank with the pedigree of ECOBANK would now only in 2008 be opening in the West African country of Gambia.

The news that it has joined the ranks of ECOWAS countres in which ECOBANK operates is great news. ECOBANK now covers all of the ECOWAS countries, reminding us first of its West African roots and, secondly, underscoring the importance of the its expansion into the eponymous role of a "Pan-African Bank".

One of ECOBANK's major tactics is in the acquisition of percentages of the banks in which it now operates. Speaking of which, let us remind ourselves that ECOBANK continues to expand --as exemplified by Ecobank's acquisition of 75% of no less than the East African Building Society Building.

The script runs that ECOBANK has a comparative advantage in mortgage financing, therefore this takeover is both useful in expanding respective portfolios and consolidatiung expertise.

Rememeber when ECOBANK opened a branch in Rwanda? I wondered whether this was carte blanche for the group's entry into East Africa? Well, it's a foregone conclusion now!!

The Fight is On: SADC Competes With ECOWAS in Banking

Last week, Metro TV, in its Newsnight programme, reported --much to my chagrin--that the government had offloaded (finally) its shares in ADB in preparation for the takeover by the South African bank Standard Bank.

I've been seeing Standard Bank's ads in magazines like Business In Africa, Africa Today, and been forced to accept that it, too, like ECOBANK, wnts to be a Pan-African bank.

Predictably, I'm being biased towards Ecobank being a veritable regional bank--precissely for its history of ECOWAS' stake, and its reach in almost ECOWAS countries, including CEMAC countries. Honestly, Stanbic, a Pan-African bank? I don't think so! Where's the SADC support to underscore this? Where is the SADC region's understanding of the rest of Africa?

In my view, I see an interesting trend here--one of Stanbic, like South African big capital, choosing to lord it over Africa, and feeling, why not, West Africa's a good place. Once we get Ghana, we've got a springboard for the rest of West Africa.

Not so fast, Stanbic!

The South Africans appear not to understand not just West Africa, but its market. One thing that goes to compound this perception is an article in Friday's edition of the private Ghanaian paper The Observer, with the headline:

Stanbic Offers $80m for ADB

The sub-heading speaks volumes: Workers Charge and Say "Kai!" ADB's Western Union
Inflows for 2006 Alone Was $400m



This, in fact, was reduced from $120m.

The cheek of Stanbic! To think it could buy Ghana's only agricultural development bank for $80m, when Western Union's for ADB alone was clocking a good five times aaht amount speaks more about the South African chutzpah, or hubris, of feeling it can lord it over West Africa in general, and Ghana in particular.

Back to the news report from Metro news, I noticed that the following night, the station reported that the government insists it had not sold its shares in ADB, and was actually looking at an unsolicited proposal from Stanbic made last year.

It was confirmed in the state-owned Daily Graphic on Thursday, as the picture above illustrates.

I certainly hope that Bank of Ghana, and Ghanaians open their eyes to the looming threat of big capital--be it outside Africa, or on the continent itself, represented by a wolf in sheep's clothing--South Africa, always ready to please the West and its elite, yet less amenable to the interests of Black Africa.

Does NEPAD ring a bell, anyone?

Selling SAARC to the World...what exactly?

The South Asian Association for Regional Cooperation was established in December 1985 and, according to wikipedia:

is the largest regional organization in the world by population, covering approximately 1.47 billion people.

It comprises eight countries, with the latest being Afghanistan that joined at its 14th Summit in New Delhi, on April 3 and 4th.

You sometimes wonder whether these countries join for the sake of joining the organisations, or whether there is actually something fundamentally fuelling a desire to be part of a project that works. I can perhaps understand why the latter would be interested given its relative isolation in the Grand Scheme of International Politicking, but why join a grouping that doesn't seem to have a future?

If that sounds harsh, try reading Pakistan's Daily Times article,which paints a rather despondent view of the largest regional organisation in the world. The key word is...Kashmir:

India rolled forward with radical visa concessions to all including Pakistan. Pakistan sat there and watched, its outlook marred once again by an obsession with Kashmir although there was no need to be so costive about it. Pakistan can show its internal political audit that it was giving nothing away on Kashmir while going ahead with the free trade negotiations. Suddenly the inventiveness of General Musharraf is gone and Shaukat Aziz is changing his stripes. Pakistan must be the rare country that uses a banker prime minister to block trade

I quite like the idea of a visa concession. West Africa's ECOWAS has it, as exemplified by the comment on the Mali Embassy website in the US:

No visa is required for ECOWAS countries' citizens, citizens from Algeria,Cameroon,Andorra,Monaco,Chad, Gambia,Morocco, Mauritania,and Tunisia( a valid identity card or passport are acceptable

The editorial maintains Sri Lanka talking about a common currency!

It seems to me that sometimes when leaders sit in these regional organisation meetings, they scan the horizon on what is working, or seems to be working, without taking into account any practicalities for their respective region. So, because the EU has adopted a common currency, and anglophone West Africa is talking about it, it's a good idea? Not necessarily!

Besides, for all ECOWAS' problems, especially with the linguistic divide that has marred progress many a time, one thing that ECOWAS has transcended is this view espoused by some leaders of SAARC (in bold):

Prime Minister Shaukat Aziz is known for his smoothness but said things quite out of character for a banker.

He said outstanding political issues should be sorted out first before free trade materialised between the two countries — a brief given by the establishment.

But he must have wondered why he was losing India’s capital investment in Pakistan along with the Arabs of the Gulf

Frankly, this attitude will get policy-makers nowhere if they want to fast-track regional integration. Harmonising laws under a supra-national authority may be problematic to some--on account of the loss of sovereignty--but ultimately, these outweigh the politics that exist within any region. Are we saying, also, that the EU is not without its political problems? Far from it! SAARC needs to move--and very quickly.

ECOBANK, the West African bank (supported by ECOWAS), has made great strides from being a regional bank to now envisaging a transformation (slow-and-sure) into a "Pan-African Bank". It made it, and is going places. That was back in 1985.

SAARC was established in the same year. Its achievements are nothing to write home about. Sometimes I wonder with distractions like ASEAN and Russia's Shanghai Cooperation Organisation, small wonder with the slow progress. Russia, for example, does not seem very enamored by the regional grouping:

The world seems to be keen on SAARC but not its old members. At the global level, some countries are realistic about the limitations of the organisation. Russia, for instance, is not keen, and is of the view that SAARC “is still evolving and has a long way to go”. In fact, Russia points to the possibility of the SAARC states pulling out of the prison of South Asia and breathing more freely in the Shanghai Cooperation Organisation (SCO).

All that said, it is not so much a matter of SAARC wanting to move as in needing to move and very quickly. Like, now!

Will this be Africa's Second Regional Banking Group?

Not to be cowed by criticism of its 419, and apparent endemic corruption, Nigeria has bitten the bullet to spearhead the...

...establishment of a regional bank [that] will help reverse the dependence of real domestic capacity on foreign financing by empowering key African institutions to build a large ticket private sector businesses into global players in key sectors

These words were uttered by the Central Bank of Nigeria Chief Professor Soludo, responsible for facilitating the dynamic and vibrant Nigerian banking sector.

Looks like the African Finance Corporation, as reported by Ghana's Business Week Ghana, will be "Africa's version of the International Finance Corporation of the World Bank"

Kudos to Nigeria! All of Africa ought to get on board, whilst this corporation opens up offices in The Gambia; South Africa; Kenya; Tunisia and "some francophone countries".


Incidentally, ECOBANK, the private sector banking arm of ECOWAS has been the quintessential regional banking group since 1985. It has offlate, re-branded itself as the Pan-African bank.

This, therefore, stands askance to what Prof Soludo says here:

Being the first private sector owned and run regional bank, Prof Soludo said, “our wish is for it to be 100%-owned by the private sector.”

I hope the esteemed professor jsut remembers to give credit where credit is due, by acknowledging ECOBANK as a regionally-run bank, too!

RegionsWatch will keep you posted.