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Top 10 African Countries With the Most Developed Financial Market

South Africa, Mauritius and Nigeria maintained their first to third positions respectively in 2022 Africa’s Most Developed Financial Market. 

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Traders Wall Street

South Africa, Mauritius and Nigeria maintained their first to third positions respectively in 2022 Africa’s Most Developed Financial Market. 

According to a report released by Absa Group, South Africa, Mauritius and Nigeria are the top three most developed financial markets in Africa.

The analytical report “Absa Africa Financial Markets Index, 2022” which was done in conjunction with The Official Monetary and Financial Institutions Forum, (OMFIF) evaluates financial market development in 26 African countries. 

Investors King understands the report highlights economies with the most supportive environment that could enhance market performance using six pillars; access to foreign exchange; market transparency, tax and regulatory environment; capacity of local investors; macroeconomic opportunity; and enforceability of financial contracts.

According to this year’s report, Namibia, Uganda and Kenya featured among the countries with the greatest increase in overall scores. The three countries are recognised for the work done to improve their environmental, social and governance market frameworks. 

For instance, the Government of Kenya has incorporated climate risks into the financial stability regulation. 

A full list of the countries that appeared on this year’s ranking includes South Africa which came first with an overall score of 88 points, dropping 2 points when compared with 90 points the country had in 2021.

Mauritius was ranked second with an overall score of 76 points, the same point the small country along the Indian ocean had in 2021. Nigeria also maintained its third position with 69 points while adding 2 points to the 67 points it had in 2021.

Other countries on the list include Uganda which has 66 points to emerge fourth, bagging additional six points from the 60 it had in 2021. Botswana ranked fifth with 66 points, adding four points from the 62 points it recorded in 2021. 

Featuring on the top ten list include Namibia, Ghana, Kenya, Morocco and Egypt which ranked 6th, 7th, 8th, 9th and 10th respectively. 

Below is a top 10 list of Africa’s Most Developed Financial Market

         Country                        2022.        2021.   

  1. South Africa.              88.            90.     
  2. Mauritius.                  76.             76. 
  3. Nigeria.                       69.            67. 
  4. Uganda.                       66.            60.  
  5. Botswana.                   66.            62. 
  6. Namibia.                     65.            58. 
  7. Ghana.                         65.            64.  
  8. Kenya.                          61.            65. 
  9. Morocco.                      60.            56. 
  10. Egypt.                           57.            56. 

 

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Banking Sector

Ecobank Reports $401 Million Before Tax in Nine Months to September 2022

Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.

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Ecobank - Investors King

Ecobank Group on Thursday reported a 7% increase in revenue for the nine months ended September 2022, the leading financial institution announced in its audited financial statement.

Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.

The bank’s operating profit expanded by 12% to $593 million, up from $528 million filed in the corresponding period of 2021, Investors King reports.

Profit before tax rose to $401 million, a 14% increase from $352 million achieved in 2021. Profit paid to shareholders grew by 7% from $182 million to $196 million.

Gross loans and advances to customers increased 5% from $9.469 billion to $9.917 billion. Similarly, deposits from customers increased by declined by 2% to

Commenting on the bank’s performance, Ade Ayeyemi, CEO, Ecobank Group, said: “We continued to deliver on our strategic priorities and are on track to meet full-year targets despite the complex operating environment. Group-wide return on tangible equity reached a record 21%, and profit before tax increased by 14%, or 48% at constant currency (i.e., excluding currency movements).

“These results reflect the resilience, strong brand and diversification of our pan-African franchise. We saw decent client activity in consumer and wholesale payments, trade finance and foreign currency markets. Additionally,
despite inflationary pressures, we maintained a tight lid on costs, thereby improving our cost-to-income ratio to 56.3% from 58.3% in the previous year.

“The dampened economic outlook necessitated maintaining a sound balance sheet with adequate levels of liquidity and capital. As a result, our total capital adequacy ratio at 14.4% is well above our internal and minimum regulatory limits. Also, we hold sufficient gross impairment reserves that fully cover our non-performing loans. Moreover, we have fully repaid the five-year $400 million convertible debt we issued in September and October of 2017.

“Ecobankers have worked extremely hard to serve our customers’ financial needs, and I am proud of them. As always, we will passionately work towards realising our vision and remaining the bank that Africa and friends of Africa trust.”

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Finance

POS Operators Kicked Against CBN Withdrawal Policy

Nigeria does not have the infrastructure to run a cashless society given the size of cash transactions done daily.

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POS Business in Nigeria

Point of Sale (POS) operators in Nigeria under the umbrella of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) have kicked against the new CBN policy which pegs withdrawal on POS to N20,000 daily. 

Investors King earlier reported that the Central Bank of Nigeria (CBN) plans to limit daily withdrawals for both POS and ATMs to N20,000 daily and N100,000 per week.

The policy which was announced in a circular sent to commercial banks yesterday also restricted cash withdrawals from over-the-counter, Automated Teller Machines (ATMs) to N100,000 and N500,000 per week for individuals and corporate organisations, respectively.

Similarly, the memo directed commercial banks to load only N200 and lower denominations into their ATMs

While commenting on the new policy, AMMBAN President, Olojo Victor stated that the new policy is capable of sending members of the association out of business. 

“They want to send us out of business. We are against this. It is counter-productive. It does not represent what the CBN initially stood for in terms of financial inclusion. This is not driving us forward” Olojo lamented. 

He wondered how an average Nigerian will be able to cope with the new policy, stating that not many Nigerians can transact without the use of cash. 

“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitised.

“There is no alternative and you are taking out cash. You are running a cash-dominant economy as we speak.

“Cash still remains king whether we like it or not. Go to the average market we still have more cash transactions than PoS and suddenly you want to seal cash without bringing alternatives and education and sensitising Nigerians on how the alternatives work.

“This will not fly. It is not suitable. It is a good idea but not at the right time,” he concluded. 

Meanwhile, the president of the Bank Customers Association of Nigeria, BCAN, Dr. Uju Ogubunka, commended the CBN on the policy.

He, however, noted that the policy would be difficult to implement owing to some issues such as broadband connection and sensitisation among others. 

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Finance

Nigeria’s External Debt Rose From $18.3bn in 2010 to $103bn in 2022; Says World Bank

Nigeria spent $9.6 billion on debt servicing in 12 years

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The World Bank stated yesterday that Nigeria’s external debt increased from $18.3 billion in 2010 to $103 billion in 2022. The bank added that the country spent $9.6 billion on debt servicing in 12 years. 

According to the “International Debt Report” released by the bank, Nigeria’s foreign debts rose astronomically by 305 per cent during the 12 years.

The report added that external debt stood at $76.21 billion in 2021 but rose quickly to $103 billion by the first half of 2022 (H2 2022).

Furthermore, cumulative annual interest payments on external debts rose sharply by 2,819 per cent to $1.73 billion in 2021 from $59.3 million in 2010.  

Investors King understands that the implementation of Nigeria’s budget heavily relies on external borrowings.  

An example is the construction of railway tracks which are heavily funded by the Chinese loan while the country’s 2023 budget proposal also has a deficit of about N10 billion which will be significantly sourced from international creditors.

Experts have warned that Nigeria’s rising debt could hamper the nation’s overall development, especially if the debts are not tied to projects with economic value.

Meanwhile, the report added further that principal repayment on the external debt gulped $30.66 billion during the 12 years period with annual principal repayment rising by 469 percent to $6.77 million in 2021 from $1.189 million in 2010. 

In the executive summary, the report noted that Nigeria and other developing countries are at risk of serious debt-related issues. The report cautioned that rising interest rates coupled with the recent sluggish economic movement may force a number of developing countries into a debt crisis. 

Speaking on the report, World Bank Country Director for Nigeria, Shubham Chaudhuri stated that Nigeria’s economy does not reflect the huge level of debt stock, adding that multilateral institution is worried that the cost of servicing debt could exceed the nation’s revenue.  

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