The Banking & Financial Services Cluster
Background
Between 2001 and 2008, Africa grew by an average of 5.9% in GDP, improving by an impressive 5.2% in 2008 alone. Accordingly, Africa has doubled its FDI intake from 2003 to 2007. FDI to Africa rose to $48 billion in 2006, surpassing foreign aid for the first time.
A recent Oxford University study of 2002-2007 data shows Africa-based publicly traded companies offer the highest rate of return on investment in the world, outperforming, on average, companies in Asia and South America.
A 2009 World Bank study of 2007 data concludes branches of foreign banks operating in sub-Saharan Africa yield higher returns on assets and equity than branches of the same banks located in other continents.
One of the driving forces behind this growth is a recent continent-wide improvement in the institutional framework for banking and finance, such as macroeconomic stability and an enhanced regulatory environment.
Perhaps Nigeria lends itself best as an example of this trend. After a 2005 CBN-coordinated bank consolidation exercise that resulted in 26 strong banks emerging out of 87 weakly-capitalized ones, the Nigerian banking sector strengthened considerably from 2006-2008, with Nigerian banks rapidly expanding across Africa. As at August 15, 2009, Nigerian banks (on average) were remarkably outperforming the FTSE EuroFirst 300, the S&P 500, the Nikkei 225 and the Nigerian Stock Exchange (NSE) All-Share Index averages.
Overall, the ongoing global financial crisis has had a relatively low impact on African financial markets. This has led investors to increasingly consider diversifying into investments in Africa. Many now regard Africa as the “last investment frontier,” which can simply no longer be ignored. However, the political environment in Africa remains relatively unstable and thus intimidating to potential investors.
About the B&M Banking & Financial Services Cluster
The B&M Banking & Financial Services Cluster is a highly specialized research group that provides clients with timely analysis on political, economic, security and social developments affecting the Banking and Financial Services sector in Africa, and forecasts the impact of these developments on a client’s bottom-line.
The Applications for Business and Investment
Banking & Financial Services Cluster analysts help clients incorporate political risk management into their plans for investing in Africa, especially at the point of entry and expansion.
Our flexible research model and pioneering AfriRisk Index©, the first comparative country risk index modeled to monitor, measure, and forecast political, economic, social, and security risks unique to Africa, can be adapted to track categories of risks prevalent in the banking sector in Africa and pertinent to a client’s investment plans, including the risk of expropriation and vandalism.
For example, B&M currently monitors and forecasts risks threatening the multiple municipalities, provinces, states, countries, regions, and sectors represented in a renowned Fund consisting 50 securities of African companies, the majority of which are in the banking and financial services sector.
For more information, please contact the B&M Banking & Financial Services Cluster directly at banking@bmconsultancy.net
Banking & Financial Services Analysts
Our analysts are experts on the banking and financial services sector, as well as on general African politics, history and business, possessing the requisite multinational language skills.
They monitor all developments affecting the banking sector in Africa, including those occurring within and outside of the continent.
The cluster is supported by field research analysts and on-the-ground monitors based in several key producing countries, strategically positioned to help our clients navigate and manage the day-to-day political, security and social risks of doing business on the ground in Africa.
The Space
B&M’s Banking & Financial Services Cluster conducts its research on a continental, sub-regional, national, provincial, municipal, and industry level.
It covers any combination of African cities, states, countries, and regions pertinent to a client’s business plans.
Our analysts work in close collaboration with B&M’s regional and geographic research groups to provide clients with insightful comparative analysis of the financial services sector across multiple regions.
Sectors Covered
Banking and Financial Services
Coverage Area
B&M’s Banking and Financial Services Cluster measures and forecasts risk in any combination of African cities, states, countries, and regions pertinent to a client’s business plans.
For more information, please contact the B&M Banking & Financial Services Cluster directly at banking@bmconsultancy.net |
