The Trump administration recently appointed Donald Yamamoto as acting Assistant Secretary of State for Africa.
Prior to this appointment the main signal Africa has gotten with regard to the US approach to foreign policy was through statements by former US Secretary of State Rex Tillerson, and his concerns with the growing economic strength of China in Africa.
On September 18, the US government, through Tibor Nagy, assistant secretary, Bureau of African Affairs, provided clearer direction of the focus areas for the US in Africa going forward. It seems US strategy will be focused on promoting stronger trade and commercial ties, and advancing peace and security.
This is good because, rather than focus on China in Africa, the US has ample strengths it can leverage in the continent.
If one focuses on the economic engagement potential between Africa and the US, there is considerable room for both parties to benefit particularly with a focus on private sector development. To be clear, the term private sector here refers both to formal and informal businesses, large players and micro, small and medium enterprises (MSMEs).
The first opportunity is in financing options in Africa that can be met by US financiers.
A key strength of the funding options presented by America is that opportunities fall along a spectrum of more mission-oriented to more-business oriented financing.
A major funding gap Africa has right now is patient capital for MSME development, a gap which cripples private sector development in Africa.
This funding gap can be met by financing options already provided by entities in the US, particularly impact and angel investors. Business-focused grants and affordable debt can be channelled to develop SMEs that deliver social and economic value and strengthens their commercial returns and business activity.
There is also an opportunity for more bottom-line oriented financing for more established and large players in Africa. But the reality is that without the development of MSMEs, the pipeline of viable projects for mainstream investors will continue to be narrow. The US has a blend of financing options that can be leveraged for MSME development and the creation of a pipeline of deeper financing options for everyone.
This blend of financing can be more effectively coordinated and leveraged for private sector development to the benefit of both US and African players.
The second opportunity the US presents Africa is a focus on environmental, social and governance (ESG) issues.
While parties from other parts of the world may be more willing to be lax on ESG issues, the fact that US businesses view these as core concerns is important. Although the centrality of healthy ESG practices from US business may be due to legal compliance issues and high ESG expectations at home, African businesses financed with this approach are likely to be stronger business entities going forward.
Thus, the focus on ESG performance is a strength US financiers can use to support the growth of holistically sustainable businesses in Africa.
African businesses benefit by ensuring they not only meet legal ESG requirements but actually develop a brand of being responsible businesses that support the development of their continent.
The two points elucidated above are only the surface of the economic opportunities that exist between Africa and the US. Therefore, rather than being concerned with what other entities are doing in Africa, the US ought clearly see it can be an important partner for private sector development in the continent and leverage this strength going forward.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.