Friday, March 23, 2007

Homeless African Banks

Regional African banking institutions seem to be having some trouble with their host nations.

First it was the African Development Bank which is hosted by Tunisia after war broke out in Ivory Coast. A Wall Street Journal story earlier this month highlighted the dilemma posed by US pressure to have this African Bank hosted in an African, i.e. sub-Saharan country, but at the same time not shut the door on a return to Ivory Coast.

Now it's the African Export-Import Bank which is about to be evicted from Egypt. This stems from a long running dispute when Egypt, upset that one of their own was not elected president of the bank, locked out the incoming president and froze their funding of the bank. Bank shareholders met thereafter and resolved that the election of the president was in order and asked that Egypt accept and respect that decision. Now Egypt has decided to sell their shares in the bank - resulting in the members looking for a new headquarters.

6 comments:

AFriendOfKenya said...

When you say "African Banks" and say Egypt is trying to evict African Import-Export Bank, does it mean:
(i) Egypt is not African OR
(ii) By African Banks, you mean Sub-saharan Africa, south of the Sahara (excluding South Africa, of course)?

MainaT said...

Si they come to Kenya?

coldtusker said...

USA's position makes no sense... Isn't Tunisia in Africa?

As far as the Egyptians go... AFREXIM should come down to Kenya esp with the improved infrastructure:
- Flights via KQ to most African destinations
- Cheaper local telecoms thanks to competition
- Cheaper int'l telecoms with the new TEAMS, EASSY & Reliance fibre-optic cables to be installed
- Capitalistic leanings in Kenya
- Conference facilities are available all year round

Only negative - let's be honest - is security! That is something we need to work on asap.

Does AFREXIM pay rent? Coz then Kenya needs to make a serious bid to host them coz it means more rental space can be used in Nbi. If they build their own HQ, then a boost to local contractors as well as improvement of infrastructure.

Benin "Mwangi" said...

Bankelele:

I never knew that this was the situation for AFDB or AIEB. I think that it could become an opportunity for a country like Kenya.

It just makes sense, with the strong banking system in Kenya and the nice banking clusters that already exist there-they must be there for a good reason.

One more thing, a bit unrelated-please excuse me. Over the weekend at the Kenya Open for Business conference I learned that Kenya is home to Africa's fastest growing bank-Equity Bank. This type of news makes me very excited about the economic happenings in Kenya.

Thanks!

Coldtusker:

Great points. Security...that sounds like something very, very serious. Do you think that this is something that private security firms can properly address in KE or do you think that this should be a gov't priority? To be honest with you, I have never heard anyone connecting security risks in Kenya with the ability to attract business in Kenya. I don't even remember it being mentioned at the forum. Based on some things that I come across, I belive you too.

So the reason for me pointing this out is because you are right. It is very difficult to attract major investment in a country perceived as having security issues. Thanks for making that connection.

On a side note, I will be posting my impressions of the Kenya Open for Business forum on my blog. Hope that you will join us.

bankelele said...

AFriendOfKenya: I am not saying Egypt is not Africa - that's another debate for another day. Note that Egypt are the ones walking away from Afrexim

MainaT & Coldtusker & Benin: Proprierty perhaps since there are also Middle East financial bodies which many North Africna countries also subscribe to hence the placing further south in Africa.

Of the requirements for new HQ - Kenya scores well on having a market oriented economy, free foreign exchange, strong financial system, good relation with other countries, good communication systems (though pricey) adequate human resources to staff banks, reasonable cost of living & price stability, goods schools & hospitals and is situated well (geographically) in continent.

But Kenya weak on crime rate and roads (though air links are good)
2 years and allocate land for and may not be able to match the financial incentives that perhaps an oil economy can offer the Banks to set up homes there

swaka said...

I don't agree with the US meddling in the African Bank affairs but having worked with Egyptian, Tunisian, and Moroccans, They consider themselves Middle Eastern before they acknowledge their African heritage.

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