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U.S. Export-Import Bank’s Sub-Saharan Africa Advisory Committee Shows Strong US Commitment to Africa

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Central Bank

The latest appointment by the U.S. Export-Import Bank of its Sub-Saharan Advisory Committee for 2020 and 2021 confirms the renewed and increased appetite of US financial institutions for the continent.

The Committee is composed of pro-investment and pro-business advisors who understand Africa and will be instrumental in growing the US-African cooperation and flows of goods, services and technology.

The Sub-Saharan Advisory Committee is chaired by Daniel Runde, Senior Vice President and Director of the Program on Prosperity and Development at the Center for Strategic and International Studies (CSIS). It is composed of:

C. Derek Campbell, Chief Executive Officer, Energy and Natural Resource Security, Inc.
Scott Eisner, Senior Vice President, African Affairs; President, U.S.-Africa Business Center, U.S. Chamber of Commerce
Rebecca Enonchong, Founder and Chief Executive Officer. AppsTech
Lori Helmers, Executive Director / Americas Export Finance Head, JPMorgan Chase Bank
Florizelle Liser, President and Chief Executive Officer, Corporate Council on Africa
Mima Nedelcovych, Chairman, AfricaGlobal Schaffer
EE Okpa, Principal, The OKPA Co.
Marise Duff Stewart, Director Customer and Industry Relations, Progress Rail, a Caterpillar Company
Paul Sullivan, President – International Business, Acrow Bridge
Sola Yomi-Ajayi, Chief Executive Officer, United Bank for Africa (UBA), America

By working to provide funding for trade and development deals in Africa for American companies, the US EXIM Bank can become an increasingly important source of financing for Africa’s critical energy infrastructure. US companies have important products, experience and expertise in several key segments of the energy value chain that would be extremely beneficial if properly matched with opportunities on the continent. This is especially relevant to the natural gas value-chain which has become a key priority for most African governments, and for which American technology and services can help transform the continent’s energy industry.

Equally important is the focus given to small and medium-sized enterprises (SMEs) within the Committee. The African Energy Chamber’s own US-Africa Committee has identified the collaboration between US and African SMEs as a major requirement to grow investment and technology transfers between the US and Africa. The increased attention given to SMEs on both sides of the Atlantic is extremely encouraging for the future of US-African cooperation and its ability to create jobs and value for both regions.

“The African Energy Chamber notes and welcomes the recent appointment of the US Exim Bank’s Sub-Saharan Advisory Committee. The renewed interest and appetite for investing in Africa shown by Exim Bank and other US trade agencies is welcome in Africa, and the continent’s energy sector is listening and open to doing business and making the kind of deals that will propel the continent towards a prosperous future. The African Energy Chamber looks forward to supporting further US involvement in Africa and to developing new ways of working together and pushing for a pro-African investment agenda in the US public and private sectors,” said Jude Kearney, a prominent member of the Africa Energy Chamber’s US-Africa Committee. Kearney is the former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce during the Clinton Administration and currently President of Kearney Africa Advisors.

“We are very proud to see Rebecca Enonchong on this board. She more than anyone understands the challenges of small businesses and has personally built and mentored many such businesses. With her you know you have someone who will work towards making America a good partner of the African business community and ensuring that civil society is not left behind. She is an inspiration for so many women in business” Said Mickael Vogel, Director of Strategy at the Africa Energy Chamber.

“We are grateful that our own C. Derek Campbell will add value to this work. Derek has a proven track-record on issues that concern trade with Africa and also on Energy Security. Advancing and protecting Africa’s energy sector, empowering Africans and openings doors for so many that he has never met has been the work of his life”, concluded NJ Ayuk, Executive Chairman at the African Energy Chamber.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Ghana/Kenya: Eurobonds to Decouple as Fiscal Challenges Come to Fore

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Ghana and Kenya, two of the sub-Saharan African sovereigns with the highest amount of outstanding Eurobonds, could see a widening of their risk premiums over 2021, according to a Senior Credit Analyst at Redd Intelligence, Mark Bohlund.

Faced with fiscal challenges, the two African nations are expected to return to the Eurobond market in the first quarter of 2021, but this time with bigger risk premiums as investors are expected to incorporate a higher likelihood of frontier-market issuers being pushed into debt restructuring.

Mark Bohlund said, “Ghana and Kenya are likely to return to the Eurobond market in 1Q21 but see a widening of their risk premiums over 2021 as investors incorporate a higher likelihood of frontier-market issuers being pushed into debt restructuring.”

With Ghana’s outstanding Eurobonds presently estimated at US$10.3 billion and Kenya’s outstanding Eurobonds put at US$6.1 billion, spreads on Ghana’s Eurobonds will increase over those of Kenya in 2021.

It is likely that spreads on Ghana’s eurobonds over those of Kenya will increase over 2021 as concerns rise over its weak fiscal position and high reliance on commercial overseas financing,” Bohlund stated.

Commenting on the countries’ fiscal positions, Bohlund said both countries are likely to post double-digit fiscal deficits this year, as contracting economies add to already faltering government revenue.

“With interest costs absorbing close to 50% of government revenue, Ghana will struggle to find sufficient cost- savings in other areas to reduce the fiscal deficit substantially in 2021.”

“In contrast to Kenya, Ghana has already cut back its capital expenditure to a bare minimum. The Bank of Ghana stepped up its purchases of government bonds sharply in September and we expect this to continue during 2021.

“In Kenya, part of the solution should be to encourage county governments to raise more revenue, but this will be challenging to implement before the August 2022 elections.

“Having shied away from bi- and multilateral creditors in favor of commercial borrowing, Ghana is likely to struggle to secure sufficient external financing in 2021. This makes increased central bank financing likely and poses downside risks to the cedi.

“Neither Ghana nor Kenya is likely to seek DSSI participation in 1H21 even if they deem that international bond issuance will not be possible.

“We have changed our view and now expect both Ghana and Kenya to issue Eurobonds in 1H21.

“Kenya is likely to continue to draw on funding from the IMF, the World Bank and other multilateral creditors, as well as bilateral financial support from China as the Standard Gauge Railway, continues to bleed funds.”

Bohlund added that the spreads between Ghana and Kenya Eurobonds are likely to widen further as a higher risk of a debt restructuring is priced into Ghanaian assets.

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Finance

Insider Dealing: Paul Miyonmide Gbededo Adds Another 612,326 Shares of Flour Mills to His Stake

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Paul Miyonmide Gbededo, the Group Managing Director, Flour Mills of Nigeria Plc bought an additional 612,326 shares of the company.

The management stated this in a disclosure statement sent to the Nigerian Stock Exchange on Monday.

The managing director purchased the shares at N27.75 per share on November 20, 2020 at the Nigerian Stock Exchange in Lagos, Nigeria. Meaning, Gbededo has invested another N16,992,046.5 into the company.

This was in addition to the 3,284,867 shares valued at N91,642,269 and 4,200,852 shares worth N117.62 million purchased by Gbededo earlier in the month of November. Bringing his recent purchases to 8,098,045 million shares worth N226,254,315.5. See the details of the latest transaction below.

 

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FCMB Reports 16.4 Percent Increase in Profit After Tax in Q3 2020

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FCMB

FCMB Group Plc, one of the leading financial institutions in Nigeria, reported a 16.4 percent increase in profit after tax for the third quarter of the year.

In the unaudited financial statements released through the Nigerian Stock Exchange (NSE), the lender’s profit before tax grew by 10.2 percent year-on-year to N4.8 billion while profit after tax increased by 16.4 percent to N4.2 billion.

FCBMB Group Plc expanded gross earnings by 4.8 percent to N48.3 billion during the period under review. Similarly, the bank’s net interest income rose by 30.03 percent year-on-year to N22.7 billion.

The strong performance continued across the board as net fee and commission income increased by 0.29 percent to N5.2 billion. Net trading income rose by 39.4 percent year-on-year to N1.82 billion.

Personnel expenses dropped by 7.9 percent to N6.9 billion during the quarter while general and administrative expenses declined by 7.52 percent year-on-year to N7.6 billion. Largely due to the COVID-19 lockdown.

Loans and advances to customers rose by 10.8 percent to N793.14 billion between December 2019 and September 2020. Total desposits from customers during the same period grew by 26.7 percent to N1.2 trillion.

The bank’s total assets increased by 22.12 percent to N2.04 trillion.

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