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Thu, Sep

Reaching out to Africa’s markets

Several banks operating in Ghana are parts of pan-African financial groups that are facilitating their customers’ trade and investment activities across the continent. TOMA IMIRHE and ELORM DESEWU have uncovered one that is proving to be the most effective way of doing this.

Ghana is taking its place at the vanguard of Africa’s determined efforts to promote and facilitate intra-continental trade and investment. The country is enthusiastically involved in virtually every trans- continental, multilateral initiative aimed at spurring trade and investment flows between African countries with a view to nurturing indigenous African multinationals and international commerce enterprises, thereby creating wealth all around the continent.

This has huge potentials for Ghanaian enterprises and the country’s economy as a whole. It is instructive that nearly half of Ghana’s entire non-traditional exports are sold in West Africa and adding on sales to countries in the continent’s other sub-regions, this figure rises to well over 60 percent.

The financial services required to facilitate all these; particularly trade finance, international funds transfer, confirmation of letters of credit and the likes are delivered by several banks operating in Ghana which are part of international banking networks that reach around the continent and indeed beyond.

The most renowned of these among Ghana’s banking public is Ecobank, which is part of a trans-continental group that stretches across 33 African countries, having been deliberately set up to fulfil this purpose. But there are several others too, that have earned respectable reputations for their capacities in providing financial intermediation and transaction platforms across parts of Africa or indeed the entire continent. These include Stanbic Bank, part of the South Africa headquartered Standard Bank Group, which stretches across 20 countries; and the Nigeria headquartered United Bank for Africa (UBA) Group with operations in 19 countries. Others are the British-headquartered Standard Chartered Bank with 15 banks across the continent and Barclays Bank with 12.

Curiously though, the bank with arguably the best reach around the continent has gone relatively unheralded so far, despite its name which clearly indicates its huge trans-continental presence.

This is Bank of Africa (BOA) a bank that has one of the widest networks across Africa with regards to a number of subsidiaries and affiliates, with a direct presence and activities across 17 African countries, including Ghana. The others are Benin Republic, Burkina Faso, Cote d’Ivoire, Mali, Niger, Togo, Senegal, Democratic Republic of Congo, Madagascar, Ethiopia, Rwanda, Kenya, Tanzania and Uganda.  Even more importantly, Groupe Bank of Africa has the most balanced representation: it is not just represented in seven West African countries, where most of its competitors in Ghana are primarily represented, but has a presence in seven countries in East Africa and the Indian Ocean, as well as in Central Africa and – in a situation where it has virtually no direct competition – in North Africa too.

The latter arises from its ownership by BMCE Bank of Africa, Morroco’s second-largest privately owned bank, which acquired a majority equity stake in Groupe BOA in 2010. The BOA Group itself was established in Mali in 1982 and has over the past three and a half decades built up the strongest presence in Francophone Africa, the western part in particular, among any multinational banking group on the continent.

Indeed it is instructive that BOA Ghana represents the Group’s first entry into Anglophone West Africa. This has proved pivotal for many Ghanaian enterprises with sub-regional or trans-continental business ambitions, giving them a conduit across the continent, particularly the Francophone segment, that hitherto was simply not available in this country.

In Ghana itself, BOA is firmly established as a mid-sized bank, its GH¢1,144.5 million in total assets as at the end of 2016 placing it 18th among the 33 universal banks currently operating in the country. Instructively, it ranks higher by shareholders funds, its GH¢163.941 million as at the end of 2016 ranking it 16th in this regard and giving it a solid capital adequacy ratio of 14.32 percent, nearly one and a half