Uncategorized - Afrikan Heroes

Rwanda’s New Financial Centre Ready for Business By Nick Barigye

May 6, 2020

CEO of Rwanda Finance Limited Nick Barigye

Rwanda’s dream of becoming East Africa’s financial hub and one of Africa’s economic and financial centres has received a boost with the new strategy set out to actualize government’s National Strategy for Transformation (NST1) 2024 plan. As part of the NST1, Rwanda has started with the kickoff of the Kigali International Finance Centre, with a public company Rwanda Finance Limited spearheading the establishment of an international finance centre. In this brief interview, the CEO of Rwanda Finance Limited Nick Barigye speaks on the plan and where the country would most likely be in the nearest future. Excerpts.

What’s the role and mandate of Rwanda Finance Limited in the establishment of Kigali International Finance Centre?

In December 2017, the government approved a policy paper, setting out to establish Kigali International Financial Centre as a project that is looking to do reform within our financial services sector. And our reform is under three main pillars; laws and regulations within the financial service sector, the tax policy as relates to the financial sector, and skills and capacity development as relates to the financial service sector. That work is being led by the Ministry of Finance because it is responsible for policy formulation and implementation.

To be able to do that, part of what studies that were done at the time, advised that there needed to be a government agency that will now do the promotion once those reforms that had been raised are completed. So, that’s what birthed Rwanda Finance Limited. Rwanda Finance Limited is a government-owned company, whose mandate is to develop and promote Rwanda as a business and financial services hub.

So, in that sense, Rwanda Finance’s Limited mandate is to work with the industry players within the services sector, understand their needs, challenges, and then cause dialogue with policy formulators to address them. But at the same time, the mandate is now those policies are happening, then there is need to create awareness of our service offering not only as a sector but as a country both in Rwanda and outside Rwanda. That’s the distinction between Kigali International Financial Centre and Rwanda Finance Limited.

Some might think that you are building a tax haven where the rich can hide their wealth. How true is that assumption?

All the work we are doing, be it on the rules and regulations on the tax policy, has been done to make sure that we are compliant with international standards as set out by European Union and OECD. We are mindful of that, and it is not a reputation that we want to have. We have ensured that our laws and regulations are compliant. And part of that compliance is to ensure that you’re not perceived to be a tax haven. I think even those jurisdictions that have previously had that kind of perception is working increasingly to change that. Part of that perception as well is caused by the perception that you are creating favoritism for external investors as opposed to local investors, which is what we are aiming to address.

What are the features and characteristics of the International Financial Centre you seek to build? Are you replicating models such as New York, London, Hong Kong, Singapore and Shanghai which are ranked the world’s top financial centres?

Every jurisdiction bases on what they are good at, and what advantage it can take off. The success has been registered as a country, and that’s what we are starting from. RFL and Kigali International Financial Centre are going to build on work already done, which is tremendous. It is to instead to harness and build on to that. When you look to Rwanda, what is Rwanda known for? Right now within Rwanda and outside Rwanda, we are known for championing trade within Africa among Africans.

So, one of the products that we are going to be promoting as Rwanda Finance Limited within our ecosystem is called ‘global trade’. So, meaning we are going to attract investors who are looking to invest in Rwanda and also investors who are looking to use Rwanda for domiciliation to trade with other African countries.

So, emphasis on what successes have we registered as a country, how can we craft products that build on success. I think it is the UNCTAD 2019 report says ‘foreign direct investment to Africa taking stock of 2018, we were around $46 Billion. There is appetite, even outside Africa in general we are seeing increase of foreign direct investment.

If we are saying now to international investors, here is an alternative, here is a country in Africa, World Bank rates second in ease of doing business in Africa, it is a country that ranks second as a conference destination in Africa, and it has an airline, with 26 direct flights. We are offering an alternative jurisdiction to international investors.

Is there not replication of tasks currently being handled by other government agencies?

In every jurisdiction, there are different stakeholders. The central bank and the capital market are regulators, they’re not promoters. So, us, our mandate is to promote. It’s actually to create more business for the industry that is already in existence. To be able to do that, it is to first understand what their needs are, challenges they have faced. Right now, part of the legal framework that we are working on is laws and regulations.

What are some of the interventions you have made so far and what are planned in coming days?

An example, if you recall in January this year, the parliament enacted anti-money laundering law, which was a challenge. Even those already within the industry have faced. In the same time period, parliament enacted a law establishing a counter financial terrorism unit. So, it is those interventions that we are working with the industry to address. Part of the other laws that we are looking to, once approved by cabinet then enacted by parliament is a partnership law. When we looked to attract funds, you then have different actors within that ecosystem.

A common critic is that government does more to look out for interest of international investors than local investors. Will there be balance this time?

That concern has been heard loud and clear. There are discussions going on across different, all the sectors of our economy; agriculture, manufacturing among others where RDB is leading all this effort, to seek views on how they can improve our current investment code. Part of compliance to international standards is substance rules and requirement not to be perceived as a tax haven. We are having emphasis on substance.

Substance means if we are domiciling in Rwanda, business from Rwanda, or a business that outside Rwanda, we want to make sure that we are creating employment opportunities in Rwanda. We want to see that we are directors of that company, are resident in Rwanda. We want to see that taxes and tax filing is happening in Rwanda. Part of compliance to international standards is exactly ensuring that we are not creating a comparative advantage to foreign international investors over local investors. Whatever products and services and incentives that we are championing, so long as you feel the criteria. Whether you are local or foreign, then you benefit from them.

It’s not about whether you are international or local, so long as you comply and fulfill the criteria that we will have established, and then you qualify. So, currently existing local businesses, so long as they comply with that criteria would benefit from those incentives.

To what extent is the local ecosystem aware of what you are doing?

There is still room for awareness. And that’s what we are working on internally. We are working on an intensive awareness campaign to explain what we are doing and what the industry will benefit from it. Are they where we want them to be yet? No!

We are very aware of that, and we are embarking soon on roadshows, internally into explaining what we are doing, and why it is beneficial to our economy. That’s work in progress.

Then, to the rest of Africa, we are going to launch during CHOGM. That’s when we are coming out officially and introduce ourselves to the world. But even post-launch, we are going and we have already started looking for partnerships, looking for countries that we can sign tax treaties because that is important as well. There are countries that we’ve identified; I cannot go in detail at this moment.

We were present at the recent UK-Africa summit; we are identifying different events outside Rwanda, in Africa. We are aware there is the CEO summit that is happening in Abidjan, we will be present. There are other events that are happening in Africa that we see benefiting in present, we will. But beyond those specific summits, we also want to go on roadshows in specific countries of interest to us and create awareness and do promotions.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Ugandan Investtech Startup XENO Secures $150k In Pre-seed Funding Round

April 21, 2020

Startups that succeed in raising funds during this time of economic downturn will increasingly be showing resilience in the face of adversity. Following this line is Ugandan online investment advisory startup XENO which has raised a US$150,000 pre-seed funding round to power its continued growth. The funding, which has brought the startup’s total fundraising to US$430,000, will power the growth of this pioneering Ugandan startup.

“For the astute investor, a downturn is an opportunity to invest in quality companies with strong fundamentals on the cheap….There has never been a better time to invest in the equity markets. Downturns give way to recovery. Always,’’ said Aeko Ongodia, founder XENO.

Here Is All You Need To Know

The pre-seed funding round in the startup came from Nordic Impact Funds.
The startup plans to use the funding to fund its growth, with XENO having recently partnered MTN Uganda to make professional investment advice and management available to its subscribers.
The latest funding brings the startup’s total investment secured so far to US$430,000.

Why The Investor Invested

Nordic Impact Funds is an East Africa-focused social impact fund investing in mid-stage gender smart and climate smart businesses, particularly in the agribusiness, education, health and basic services sectors, which are scalable economically and are viable models for impact.

“Our conviction is that financially viable businesses, led by dedicated social entrepreneurs, play a crucial role in achieving self-sustained large scale and long term social impact. These businesses offer underserved people opportunities for jobs and income, and a choice of needed services and products that improve the quality of their lives,” the fund stated on its website

“We invest in companies with proven impact and profitability that are in the process of scaling their business model. We like to invest with more than capital and be active partners to the companies we invest in,’’ it further added.

A Look At What Startup Xeno Does

Launched in 2017 by Aeko Ongodia, XENO uses artificial intelligence (AI) to help people plan, save, and invest their money in a diversified investment portfolio.

The startup’s platform takes into account a user’s personal circumstances, financial goals and risk tolerance to automatically devise a recommended investment portfolio, and claims its risk profiling and portfolio-compiling algorithm is one of the first of its kind in Africa.

The firm invests client funds through four unit trust funds — XENO Uganda Money Market Fund, XENO Uganda Bond Fund, XENO Uganda Domestic Equity Fund, and XENO Uganda Regional Equity Fund — in partnership with KCB Bank Uganda as trustees and Stanbic Bank Uganda as custodian.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

First Recession in 25 years Stares Sub-Saharan Africa in the Face

April 15, 2020

World Bank vice-president for Africa Hafez Ghanem

As a region, Sub Saharan Africa has eluded economic recession on regional basis in a quarter of a century, but that is likely to change with the negative impacts of the Covid-19 across the continent. This is because the World Bank in its recent economic projections predicts that the region’s economy will contract between 2.1% and 5.1% in 2020 from 2.4% growth last year. The rapidly spreading coronavirus outbreak is expected to push Sub-Saharan Africa into recession in 2020 for the first time in 25 years, the World Bank said in a new forecast on Thursday.

The global lender in its special report titled “Africa’s Pulse” said the region’s economy will contract between 2.1% and 5.1% from growth of 2.4% last year, and that the coronavirus will cost Sub-Saharan Africa between $37bn and $79bn in output losses this year due to trade and value chain disruption, among other factors.Africa has at least 10,956 confirmed cases of the novel coronavirus, 562 deaths and 1,149 recoveries, according to a Reuters tally based on government statements and World Health Organisation (WHO) data.

“The Covid-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” World Bank vice-president for Africa Hafez Ghanem said. The World Bank and International Monetary Fund (IMF) are racing to provide emergency funds to African countries and others to combat the virus and mitigate the impact of sweeping shutdowns aiming at curbing its spread.

The coronavirus has led to suspension of international passenger travel in many countries on the continent, and hit sectors such as tourism.Various African governments have announced lockdowns or curfews in response to the virus, which was slow to reach many African countries but is now growing exponentially, according to the WHO. Real gross GDP was projected to fall sharply, particularly in the region’s three largest economies — Nigeria, Angola and SA, the World Bank said.

Oil exporting countries would also be hard-hit; while growth would likely weaken substantially in the West African Economic and Monetary Union, and the East African Community due to weak external demand, disruptions to supply chains and domestic production.

The bank said the spread of the flu-like respiratory disease also had potential to lead to a food security crisis on the continent, with agricultural production forecast to contract 2.6% and up to 7% in the event of trade blockages. “Food imports would decline substantially (as much as 25% or as little as 13%) due to a combination of higher transaction costs and reduced domestic demand,” the bank said in a statement accompanying the report.

The institutions have also called on China, the US and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they can use the money to halt the spread of the disease and mitigate its financial impact.

“There will be need for some sort of debt relief from bilateral creditors to secure the resources urgently needed to fight Covid-19 and to help manage or maintain macroeconomic stability in the region,” Cesar Calderon, the bank’s lead economist and lead author of the report, said.

The World Bank said African policymakers should focus on saving lives and protecting livelihoods by spending money to strengthen health systems and taking quick actions to minimise disruptions in food supply chains.It also recommended social protection programmes, including cash transfers, food distribution and fee waivers, to support citizens, especially those working in the informal sector.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

South African Marketing Startup Mobiz Raises $1 Million From Kalon Partners

April 1, 2020

South Africa’s marketing startup Mobiz has secured $1 mn from Kalon Venture Partners, a South African venture capital (VC) firm.

“It’s no longer enough for brands to tell people why they matter. In today’s world of IoT, brands have to prove why they matter to each and every one of their customers,’’ Mobiz co-founder CEO, Greg Chen said in a press release.

Here Is All You Need To Know

With the latest investment, Mobiz will be looking to expand its plans as it looks to make a mark in the United States and Europe.

Why The Investor Invested

“Kalon’s team were impressed with the founders Greg and Clark. We believe they exhibit the exceptional traits we look for when investing in the best entrepreneurs driving disruptive technology businesses,” said Kalon Venture Partners CEO, Clive Butkow.

Butkow also praised the disruptive nature of the Mobiz solution with its targeted marketing campaigns which are deployed to customers within minutes via its integrated SmartSMS channel (at no mobile data cost to consumers).

The Kalon Venture Partners CEO also believes that this investment shows the importance of VCs investing in promising startups in tumultuous times, citing the possibilities that will come up in the ‘after’.

“Mobiz isn’t only the perfect product for this time, but will also prove instrumental in helping rebuild in the aftermath of the COVID-19 crisis,” he says. “VCs need to think long-term and take bets on companies that can play a role in regrowing South African business”.

Kalon Venture Partners says it was impressed by their track record and this was one of the factors that spurred the investment.

The VC also stated its commitment to keep investing in promising startups even in tough times such as these when a global pandemic is sweeping through the planet.

What The Startup Does

Mobiz was co-founded by CEO, Greg Chen, and CTO, Clark Lin. The startup boasts a number of blue-chip, JSE-listed companies among its clientele. The mobile marketing platform, which operates on a SAAS model, helps clients to cost-effectively improve their customer engagement.
Mobiz claims to offer a highly-personalised and targeted service to create and enhance customer relationships and increase brand loyalty. The startup says it gathers customer behavioral insights to enrich CRM systems or automate follow-up engagements.
Compared to traditional marketing channels (email, paid ads, printed catalogues, etc), Mobiz claims its numbers reflect a 400 percent improved customer engagement rate with 98 percent open rates and an average of 15 percent click-through rates.
Additionally, the startup claims to have maintained this upward growth trajectory even during the run-up to, and early parts of, the COVID-19-enforced lockdown in South Africa.

“Mobiz believes that personalisation goes beyond your customer’s name and date of birth. With Mobiz you can ensure that your customer experience will be engaging, relevant and appealing,” says Chen.

Both Chen and Clark have been involved in the mobile technology space since 2005.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

$10k Up For Grabs in Ecobank Fintech Challenge for New Ideas

March 8, 2020

The Pan African Bank, Ecobank Transnational International Group has announced that it will offer $10,000 for winners of its upcoming Ecobank Fintech Challenge. The Challenge which opened in February for applications to African fintechs, will award $10 000 to a fintech for a winning solution that can assist the bank, while the first runner-up will get $7000 and the second runner-up $5000 in cash prizes. The challenge aims to help support fintechs that are ready to scale and provides them with support and access to Ecobank’s 33 African markets so they can grow to become pan-African fintech success stories.

The Ecobank Fintech Challenge offers fintechs the opportunity to integrate with the bank’s offerings and also also offers fintechs the opportunity to potentially integrate with Ecobank’s existing digital offerings. Applications for the Challenge closes on on 12 April 2020 as interested fintechs should submit details of their product as well as a demo to the challenge. These products must address one or more of a specific set of pain points, namely: Customer experience: Ecobank is looking for products that offer solutions and innovations in the following areas: digital customer onboarding, those that improve customer experience at branches, those that improve customer experience online, digitisation of the customer journey.

To win the Challenge, the Bank is looking for innovative solutions that help improve lending to SMEs. It is also looking for ecosystem aggregation which gives the Bank the opportunity to work with innovators offering solutions on SME/Merchants onboarding on payment integration, niche merchant aggregation and those solutions that provide easy access to non-smart phone users. Equally high on the Bank’s radar are digital solutions that help improve performance of sales force as well as solutions that enable agents to offer more services, and fintechs to help solve problems around offline mobile-to-mobile payments (dead zones).

In addition, the bank is willing to consider any other solution that fintechs believe will help revolutionise the banking sector in Africa. Finalists will be selected to participate in the Ecobank Fintech Innovation Fair, while all finalists will be inducted into the Ecobank Fintech Fellowship, which will provide fellows an opportunity to explore deals, integration and commercial partnership with the Ecobank Group.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Hit by Power Shortages, South Africa’s Economy Goes Into Recession

March 4, 2020

Widespread power cuts are blamed for pushing South Africa’s economy, the continent’s most industrialized, into recession, according to official statistics released Tuesday.

The South African economy shrank by 1.4% in the fourth quarter of 2019 from the previous three-month period, after contracting by 0.8% in the third quarter, according to Stats SA. A recession is commonly defined as two consecutive quarters of economic decline.

South Africa’s nationwide power blackouts are blamed for the larger than expected decline in the fourth quarter. The state-owned power utility, Eskom, has been unable to meet demand and has had to implement rotating cuts in electricity to residences, factories, mines and businesses.

Eskom’s “inability to meet demand on a sustained basis is a key reason for South Africa’s very slow growth record of just 0.9% a year in 2015 19,” said Pat Thaker, the Economist Intelligence Unit’s regional director for the Middle East and Africa. “Eskom is, in effect, capping South Africa’s growth potential and preventing a significant rebound.”

South Africa’s economy grew by just 0.2% in 2019 and 0.8% in 2018, according to the official statistics.

Seven out of 10 of the country’s sectors contracted in the fourth quarter, including agriculture, which dropped by 7.6%, manufacturing, which dropped 1.8%, and transport, which declined 7.2%.

South Africa’s economic growth forecast for 2020 has been cut to 0.9%.

President Cyril Ramaphosa, who came to power two years ago, has not succeeded in achieving robust economic growth as the country has been hobbled by the power shortages, erratic rains and widespread allegations of corruption.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

First Coronavirus Case In Sub-Saharan Africa Confirmed In Nigeria

February 28, 2020

Nigeria confirmed its first case of the coronavirus in Lagos, the West African country’s biggest city and commercial capital, the Health Ministry said. It’s also the first reported in sub-Saharan Africa.

The case was confirmed on Feb. 27, the ministry said in a statement on its website. The case is an Italian citizen who works in Nigeria and returned from Milan to Lagos on Feb. 25, it said.

The patient is clinically stable with no serious symptoms, and is being managed at the Infectious Disease Hospital in Yaba, Lagos, the ministry said. Officials are working to identify all the patient’s contacts since he entered Nigeria.

Africa’s most populous country is also one of China’s major trading partners on the continent, with most of its imports coming from the Asian country, according to Nigeria’s National Bureau of Statistics.

Algeria has also reported a coronavirus case. Health experts have voiced concerns over the possible spread of the coronavirus in places like Africa that may be ill-equipped to handle such a crisis.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

Kenyan Businesses to Pay Tax in July Instead of Year End

February 12, 2020

Companies and individuals in Kenya will start paying new taxes at the start of a financial year every July 1 if lawmakers adopt a proposed law that seeks an earlier approval of the Finance Bill to cure delays in collection of duty that has in the past hurt revenue collection targets.

The National Assembly shall consider and pass the Finance Bill, with or without amendments, in time for it to be assented to by 30th June each year,” reads the Bill, which seeks to amend Section 39 of PFM Act to correct this anomaly.

Here Is All You Need To Know

The Business Laws (Amendment) Bill, 2019 requires that Kenya’s Treasury table the Finance Bill in Parliament before April 30 and have it approved by the President as law by June 30. This is a departure from the current trend where the Finance Bill is tabled in Parliament after the third week of June and takes months before it becomes law.

The government-backed Bill was tabled in Parliament by Leader of Majority in the National Assembly Aden Duale.

The resulting delays have deferred collection of new taxes, which have made it difficult for the Kenya Revenue Authority (KRA) to meet its revenue collection targets, prompting frequent review of to the national Budget to accommodate the lower revenue collection.President Uhuru Kenyatta signed the Finance Bill for the current financial year on November 7, meaning that by then, KRA had lost four months of collecting new taxes outlined in the Budget.

The period between the tabling of the Finance Bill — which spells out the new taxes to fund annual State operations — in Parliament and the proposal becoming law is usually punctuated by back and forth discussions among MPs, the Treasury and State House.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com

Nigeria, Others Invest Fresh $500 Million New Shareholder Equity in Afriximbank

January 23, 2020

Nigeria leading other major shareholders invested fresh equity into Africa’s premier trade finance institution, the African Export-Import Bank (Afreximbank). The new injection which came from existing shareholders was led by the Federal Republic of Nigeria and the Arab Bank for Economic Development in Africa have invested $200 million through Class A, B and C shares and $300 million in callable capital, bringing the total value of new shares issued by the Bank in 2019 to $500 million. The majority of the proceeds of the capital raise were used by the Bank to retire warrants that were issued in December 2018.

The new equity also puts the Bank in a strong position to continue its growth in line with its strategic plan, particularly in the wake of the recently launched African Continental Free Trade Area, the largest free trade area created worldwide since the formation of the World Trade Organization.The Bank continues to monitor market conditions to find the appropriate window to re-launch its initial public offering in London.

This new injection is a show of confidence in the Bank, says the President Prof. Benedict Oramah who added that “the equity injection reflects the confidence which our existing shareholders have in the Bank and the Bank welcomes their decision to rapidly take up additional equity. We are well positioned to take advantage of our relationships with our member states to provide a platform for trade and investment flows across the continent, delivering returns for the Bank and growth for African businesses.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Daniel Mminele Takes Over as CEO of ABSA Group

January 6, 2020

ABSA Group, Africa’s third largest financial institution with a tier 1 capital of $6.8 billion has named Daniel Nminele, former Deputy Governor of South Africa’s Reserve Bank as its permanent Chief Executive Officer. He succeeds Maria Ramos who was CEO of ABSA group for a decade before stepping aside early 2019. Ramos exit created a leadership vacuum in the Bank that led to the appointment of René van Wyk as interim CEO.

Speculation that Mminele was to be the permanent successor to Maria Ramos began almost as soon as Ramos stepped aside in February 2019 after 10 years as CEO of the bank that was for most of her tenure a subsidiary of British banking behemoth, Barclays Plc. In one of Ramos’s final acts, Barclays Africa Group negotiated a separation from Barclays which involved the parent company paying R12.6bn to fund the costs required to untangle hundreds of systems the two companies shared.

Absa had earlier acquired Barclays’s African operations in 2013, giving it an immediate presence in eight other African countries outside SA. Mminele brought down the curtain on a long and distinguished career as a central banker in June 2019, after serving in various capacities at the Reserve Bank for 20 years, the last 10 of which as deputy governor.

In some of the highlights of his time at the central bank, Mminele oversaw the monetary authority’s response to the global financial crisis and was intricately involved in crafting the successful bailout and rehabilitation of African Bank after the lender collapsed in August 2014.

In his final stint, he took responsibility for financial markets and international economic policy and relations representing the Reserve Bank at various high-level central banking forums alongside governor Lesetja Kganyago.

Kganyago said of Mminele in a letter to staff that he “has left an indelible mark on this fine institution and his contribution to the Bank has been invaluable and immeasurable”. Mminele served a six-month “cooling off” period until the end of December 2019 as mandated by the Reserve Bank for senior executives switching jobs at any of the country’s key financial institutions.

In June 2019 Absa chairperson Wendy Lucas-Bull told Business Day that the bank was looking to recruit someone with the necessary “stature and recognition in the market” for the top job. But Mminele has his work cut out for him. For a variety of reasons, Absa has lagged behind its competitors under the ownership of Barclays, and lost market share in several key product segments, including card, new vehicle finance and its flagship home loans business.

Ramos began to address this in the aftermath of the separation by using the occasion to initiate a “cultural reset” of the organisation. Besides restructuring, changes were made to the way employees are incentivised and rewarded that begun to turn in the interim period to end-June 2019. Home loan registrations grew at 16% during the period, more than double the growth in total home loan registrations in the country.

Mminele will now oversee the tail-end of the separation from Barclays and will inherit a structure that has involved Absa’s devolving its various businesses into three operating divisions: Retail and Business Banking led by Arrie Rautenbach, Corporate and Investment Banking (CIB) headed by Charles Russon, and the Africa regions led by Peter Matlare. Van Wyk, will step down as CEO on January 14 2020, but will remain with the group as an executive director, for handover purposes until January 31 2020.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry