African Centre for Development Finance- ACDF

Workshop on Research Methods, Co-Organized by African Centre for Development Finance at the University of Stellenbosch Business School (USB-ACDF) with Darla Moore School of Business at the University of South Carolina, Sonoco International Business Department, U.S.A. Date: 3 -7 December, 2018

A common obstacle to these outcomes for all scholars is limited experience in sourcing, preparing, and analysing high quality data. This workshop will combine instructive tutorials with hands-on experience in writing code in statistical analysis packages (e.g. STATA, R, etc.).

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Research Methods Workshop 3-7 December 2018 Workshop on Research Methods is Co-Organized by: African Centre for Development Finance at the University of Stellenbosch Business School (USB-ACDF) with Darla Moore School of Business at the University of South Carolina, Sonoco International Business Department, U.S.A. Date: 3 -7 December, 2018 The...

Blockchain Opens Up Kenya’s $20 Billion Informal Economy

://www.bloomberg.com/news/articles/2018-06-14/blockchain-is-opening-up-kenya-s-20-billion-informal-economy

Janeffer Wacheke’s fresh-vegetable stall in Nairobi uses technology that’s helping crack a problem Kenyan banks have so far failed to solve -- measuring the creditworthiness of traders in the country’s $20 billion informal economy.

The 40-year-old mother of two is among hundreds of small-scale retailers who can use her mobile phone to access loans to buy tomatoes, onions or bananas directly from producers and have them delivered by Kenyan startup Twiga Foods Ltd. That saves Wacheke a trip to the market, where she would have to haggle over prices and then transport the goods herself. It’s cutting her costs and helping her build a credit track record.

“My prayers have been answered,” Wacheke said as she packed tomatoes into a crate under a corrugated-iron roof at her stall on the outskirts of Nairobi’s city center. “In business, you need to be fast. The more you pay, the more you get bigger loans, and the more you can sell. It has really helped me.”
Neglected Data
The application offered by Twiga, which derives its income from buying wholesale fresh produce and selling it to retailers like Wacheke, uses the same technology that powers cryptocurrencies like Bitcoin to monitor how she orders stock and her repayment habits. The mobile blockchain platform -- developed by International Business Machines Corp. -- is one of a growing number of apps trying to address a major hindrance to Africa’s growth: a lack of finance.

Access to credit in the informal sector is not well-known because the data is neglected,” said Anzetse Were, a development economist based in Nairobi. “If you want to pe*****te markets in Africa, you need to have a strategy for the informal sector.”

Small businesses in Africa face a $331 billion lending gap, according to the International Finance Corp., the World Bank’s private lending arm. In Kenya, demand from micro-, small- and medium-sized enterprises, or MSMEs, is estimated at $6.5 billion a year, according to 4G Capital, a Nairobi-based provider of loans to small companies in Kenya and Uganda.

“Sub-Saharan Africa has some way to go in building the financial infrastructure needed for MSMEs,” said 4G Chief Executive Officer Wayne Hennessy-Barrett. The company expects to lend $40 million to so-called MSMEs in the next 12 months, double the amount it lent out last year, he said.

Blockchain Opens Up Kenya’s $20 Billion Informal Economy Janeffer Wacheke’s fresh-vegetable stall in Nairobi uses technology that’s helping crack a problem Kenyan banks have so far failed to solve -- measuring the creditworthiness of traders in the country’s $20 billion informal economy.

A two days syposuim (12 – 13th June 2018) between the Centre and the The Centre for Financial Inclusion (CFI) set up by the Ministry of Finance to drive the Swaziland’s Government’s Financial Inclusion Strategy for inclusive growth with the purpose of among other things, accelerating sustainable socio-economic development and improving the quality of life of the citizenry by driving financial and non-financial capacity building investments in the social and economic infrastructure sectors. This represents Government’s commitment to creating an enabling environment, therefore making it easier for Swazis to save, invest, do business and mitigate risks, as well as access appropriate financial products in order to enhance sustainable livelihoods.

These are the 10 countries that have pumped the most capital into Nigeria in 2018

United Kingdom, United States and South Africa top the list of countries with the most capital inflows into Nigeria in the first three months of 2018.

Capital inflow is the amount of money that comes into a country's economy from other countries within a particular period of time for the purpose of trade, investment or business production. The total capital inflow into Nigeria rose by 594.03% year-on-year to $6,303.63 million in the first quarter of 2018 compared to $908.3 million recorded in same period of 2017, as banking remained the leading sector.

The National Bureau of Statistics (NBS) in its ‘Capital Importation (Q1)’ report, released Friday, May 11, 2018, acknowledged that this is the fourth consecutive quarterly increase since Q2 2017, following last year’s liberalisation of the currency for foreign investors and steps to tighten liquidity to attract offshore funds.

In the report, capital importation to Lagos increased marginally by 4.59% from $2.55 billion in the last quarter to $2.67 billion in Q1, 2018, while capital importation to Akwa Ibom was $43.62 million, which is a decline of 65.05% from the figure reported last quarter ($124.85 million).

In contrast, Ogun, Bauchi, and Kano States witnessed strong growth in foreign capital inflow in the first quarter, each recording respective growth rates of 182.06%, 370.59%, and 154.84% on a quarter-on-quarter basis.

These are the top 10 countries with the most capital inflow into Nigeria in Q1 2018
1. United Kingdom (UK) - $2.25 billion
2. United States, accounting for $1.26 billion
3. South Africa - $493.22 million
4. Ghana - $380.14 million
5. Mauritania - $360.54 million
6. Belgium - $319.50 million
7. Singapore - $242.96 million
8. Cayman Islands - $214.87 million
9. UAE - $185.06 million
10. Netherlands - $103.57 million.
Meanwhile, Nigeria is leading major African countries in foreign reserves, according to data from the central banks as at the end of April 2018.

An intensive week of workshop on Applied Efficiency and Productivity Analysis using Data Envelopment Analysis (DEA). The workshop connected with a deep appreciation of the principles underlying DEA and competence on empirical modeling for DEA using R and STATA. Workshop handled by Dr Kwaku Ohene-Asare (University of Ghana Business School) and Dr Nyankomo Marwa (University of Stellenbosch Business School) The workshop is organised by Dr Olusola Oduwole of African Centre for Development Finance.

HOW DIGITAL FINANCE COULD BOOST GROWTH IN EMERGING ECONOMIES LIKE ETHIOPIA AND NIGERIA

Two billion individuals and 200 million micro, small, and midsize businesses in emerging economies today lack access to savings and credit. Even those with access must often pay high fees for a limited range of products. Economic growth suffers. But a solution is right in people’s hands: a mobile phone. Digital finance—payments and financial services delivered via mobile phones and the Internet—could transform the lives and economic prospects of individuals, businesses, and governments across the developing world, boosting GDP and making the aspiration of financial inclusion a reality.

A new report from the McKinsey Global Institute (MGI), Digital finance for all: Powering inclusive growth in emerging economies, is the first attempt to quantify the full impact of digital finance. In addition to extensive economic modeling, the report draws on the findings of field visits to seven countries—Brazil, China, Ethiopia, India, Mexico, Nigeria, and Pakistan—and more than 150 expert interviews. It also lays out the key conditions that will need to be met to capture the benefits.

The research finds that widespread adoption and use of digital finance could increase the GDPs of all emerging economies by 6 percent, or a total of $3.7 trillion, by 2025. This is the equivalent of adding to the world an economy the size of Germany, or one that’s larger than all the economies of Africa. This additional GDP could create up to 95 million new jobs across all sectors of the economy.

Many stakeholders would benefit. Digital finance could provide access to 1.6 billion unbanked people, more than half of them women. An additional $2.1 trillion of loans to individuals and small businesses could be made sustainably, as providers gain newfound ability to assess credit risk for a wider pool of borrowers. Governments could gain $110 billion per year by reducing leakage in public spending and tax collection. Providers of financial services would benefit, too.

They stand to save $400 billion annually in direct costs by shifting from traditional to digital accounts, which can be 80 to 90 percent less expensive to service. By expanding their customer base, providers increase revenue opportunities and could sustainably increase their balance sheets by as much as $4.2 trillion.

The economic potential varies significantly, depending on a country’s starting position. Lower-income countries such as Ethiopia, India, and Nigeria have the largest potential, with the opportunity to add 10 to 12 percent to their GDP, given low levels of financial inclusion and digital payments today. Pakistan has a somewhat lower GDP potential, at 7 percent. Middle-income countries such as Brazil, China, and Mexico could add 4 to 5 percent to GDP—still a substantial boost.

Digital payments and financial services are part of the vital infrastructure of a modern economy, enabling individuals, businesses, and governments to transact cheaply and efficiently. For a range of companies, including banks, telecommunications companies, payments providers, financial-technologystart-ups, retailers, and others, the potential business opportunity is large. In most countries, which players will dominate is still up for grabs.

The opportunity to accelerate inclusive growth could be addressed rapidly and without the need for major investment in costly additional infrastructure. Mobile phones are the game changer that make this all possible. In 2014, nearly 80 percent of adults in emerging economies had a mobile phone, while only 55 percent had financial accounts. Almost 90 percent of people in emerging economies have access to a network, and the share of those with 3G or 4G coverage is growing.

To capture the opportunity, businesses and government leaders will need to make a concerted and coordinated effort. Three building blocks are required: widespread mobile and digital infrastructure, a dynamic business environment for financial services, and digital finance products that meet the needs of individuals and small businesses in ways that are superior to the informal financial tools they use today.

Widely used digital finance has the power to transform the economic prospects of billions of people and inject new dynamism into small businesses that today are held back for lack of credit. Rather than waiting a generation for incomes to rise and traditional banks to extend their reach, emerging economies have an opportunity to use mobile technologies to provide digital financial services for all, rapidly unlocking economic opportunity and accelerating social development.

About the author(s) James Manyika is a director of the McKinsey Global Institute, where Susan Lund is a partner; Marc Singer is a senior partner in McKinsey’s San Francisco office, where Olivia White is a partner; and Chris Berry is a consultant in the Vancouver office.

BARCLAYS AFRICA PLANS TO CHANGE NAME BACK TO ABSA GROUP.

Barclays Africa Group today announced that it has agreed terms for operational separation with UK-based Barclays PLC, which is reducing its shareholding in Barclays Africa. The agreement is expected to unlock opportunities for Barclays Africa as an independent pan African bank. UK-based Barclays PLC announced last March that it intends to sell the majority of its shareholding in Barclays Africa over a period of two to three years.

Barclays PLC currently owns 50.1% of Barclays Africa. Following the reduction of Barclays PLC’s shareholding below the 50% mark, Barclays Africa will be able to continue using the Barclays brand at its operations outside of South Africa for three years. Barclays Africa will receive certain services from Barclays PLC on arms’ length basis for a transitional period, typically up to three years.

Barclays Africa Group Ltd., South Africa’s third-biggest bank, will split into four operating units as the lender outlines its growth strategy after the sale by its U.K. parent.

The Johannesburg-based firm will separate retail and business banking, investment banking, wealth and insurance, and its operations in the rest of Africa, it said in a statement on Monday. Deputy Chief Executive Officer David Hodnett, who became finance director in 2010, will take a two-month sabbatical, while Arrie Rautenbach will become head of retail and business banking in South Africa.

Barclays Africa is separating its business from its U.K. parent in a process that started in 2016 and is due to be completed in early 2021. The London-based bank paid 765 million pounds ($1.1 billion) for the split and the deal has allowed Barclays Africa to set out its own strategy for growth in South Africa and on the rest of the continent where it has operations in more than 10 countries.

IMF SEES ETHIOPIA BEATING GHANA AS FASTEST-GROWING AFRICA ECONOMY.
By Ana Monteiro and Ntando Thukwana

♦︎ East African economy has held position for most of past decade
♦︎ Ghana GDP surged 8.5% in 2017 as Sankofa field started output

Ghana has lost its mantle as the African economy likely to grow the quickest this year to Ethiopia, which has held the position for most of the past decade, International Monetary Fund data showed.

West Africa’s second-biggest economy should expand 6.3 percent this year, the IMF said in its World Economic Outlook released Tuesday. That’s lower than the 8.9 percent forecast in October, and is also less than the raised 7.4 percent estimate for Ivory Coast and the prediction for Ethiopia, which was held at 8.5 percent.

Commodities including oil, gold and cocoa are the mainstay of Ghana’s $43 billion economy, which surged 8.5 percent last year as the Sankofa crude field started up in May. Its growth booms and busts have been closely linked to oil since it became a producer in 2010. Ethiopia, whose gross domestic product is almost double Ghana’s, has drawn investors including General Electric Co., Johannesburg-based Standard Bank Group and hundreds of Chinese companies.

The IMF increased its forecast for expansion in sub-Saharan Africa to 3.4 percent this year and 3.7 percent the next “as the challenging outlook in commodity exporters gradually improves,” it said.

Nigeria, the region’s most-populous nation and top crude producer, will grow 2.1 percent, matching the lender’s estimate released in the Jan. 22 update to the outlook, while South Africa, the world’s biggest source of platinum, will expand 1.5 percent, more than the 0.9 percent prediction three months ago. The two economies account for almost half of the region’s GDP.

Forecasts from the World Bank and African Development Bank in January also showed Ghana would expand the fastest this year.

The World Bank reduced its forecast for economic growth in sub-Saharan Africa this year to 3.1 percent from 3.4 percent seen in October, it said in the Africa Pulse report released Wednesday.

https://www.bloomberg.com/news/articles/2018-04-17/ethiopia-pips-ghana-as-africa-s-fastest-growing-economy-for-imf

MOBILE MONEY IS THE KEY TO GROWING AFRICA'S BANKING

SectorMobile money providers, like M-Pesa, are key to key to growing Africa's retail banking space.

Africa is a global leader in mobile money, with telecom operators embracing innovative practices that allow customers to not only pay bills but also access services including loans, insurance, and savings.

Yet increasingly, fintech startups with access to greater funding and banks are trying to permeate the mobile financial services (MFS) sector and pull some of these customers their way. This strategy is dependent on the recognition that the future is digital, and that mobile money presents a lucrative opportunity to grow revenue and deposits.

Banking institutions across Africa currently face numerous challenges, including high-cost models and fees that make it unaffordable for low-income segments, a high preference for cash over digital transactions, and a predisposition towards cooperatives. As such, Africa’s retail-banking pe*******on stands at half the global average for emerging markets at 38% of the gross domestic product, according to management consulting firm McKinsey.

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