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The upshot at the conclave was the consensus that the continent’s financial institutions are beginning to emerge on the world stage
In Lomé, the capital city of Togo, the Africa Financial Industry Summit (AFIS), organized by the pan-African magazine Jeune Afrique, just concluded. It brought together more than 800 leaders in the banking and finance sectors. The upshot at the conclave was the consensus that the continent’s financial institutions are beginning to emerge on the world stage. As international competitors withdraw from the scene, the African financial industry should become more competitive to reap the emerging benefits, the participants felt.
The summit also flagged some of the pain points being faced by the continent, such as growing public debt, eroding currency values against the Greenback, climate change, etc, which have to be addressed on an urgent basis. Also important is the need for exploring new sources of funding since the existing windows available to the continent are fraught with conditions and other glitches. The summit also felt the importance of effective regulation for the rapid and sustainable growth of the sector.
The issue of international loans was discussed threadbare. The cost of borrowing from world markets has grown in recent years. In the case of sub-Saharan Africa, it has grown by 2.1% over the market benchmarks. This, the summit attendees said, is creating a significant burden for local governments. Another area of concern was the poor rating given by the international rating agencies, which invariably goes against the interest of the local governments in Africa. The summit has called upon the rating agencies to take greater account of structural factors in order to improve the situation. The need for developing Africa-centric rating agencies was also pressed, which should have transparent and credible benchmarks.
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Other areas that came up for discussion at the finance summit included insulating institutions from cyber-attacks, which of late, has become a menace and represents a major challenge for African banks. On average, 2,164 attacks per week are taking place creating major disruptions in the banking sector.
