African business leaders have been advised to seek win-win agreements with pension funds that have money to invest in the long-term.
Davis Pwele, Head of Business Development at South Africa Development Bank told delegates attending the annual Exim Bank of India conclave that although most countries face challenges of getting good financiers in infrastructure projects, pension funds remain the best option.
“A lot of money is sitting in pension funds unused. Fund managers want projects that generate regular income for their members. Infrastructure funding is long-term and likewise, pension funds need to own assets that give a good return,” said Pwele.
He said banks and other financiers should provide money for construction of roads, rail, and other amenities.
They can then hand over the projects after completion to pension funds to manage them for over 30 years. “This is a win-win situation for banks, pension funds as the country develops. This is the way to do more with less,” he said.
Dr Kapir Kapoor, Director General of South Africa office of African Development Bank, said the problem in Africa is not lack of financing but the perception that the region is risky for investment.
“Annually, Africa needs Sh78 trillion ($780 billion) for investment but only gets Sh7 trillion ($70 billion). This is a big gap. China is doing 15 per cent of all African financing needs while the private sector accounts for less than 10 per cent and the government raises 40per cent in taxes,” noted Kapoor.
“About Sh12,000 trillion ($120 trillion) is available worldwide for financing projects. Africa should attract just 0.1 per cent to support its development programmes. So why are we unable to attract,” he asked the delegates.
Kapoor urged African leaders to deal with basics such as making policies friendly to business, proper regulatory framework and deal with the perception of the risky region.
“We need insurance, political stability, stable exchange rates, growing domestic markets and prepare projects well before commencement,” he said, adding that public-private partnership has been a good model but has only attracted Sh500 billion ($5 billion) financing in the last five years.
Gambia’s Minister for Economic Affairs Mambury Njie said his country was relying on diaspora remittances which they convert to bonds for project financing.
He noted that commercial loans financing is still the most readily available model of funding big projects.
Exim Bank of India Managing Director David Rasquinha observed that his country once relied on remittances in the early development phase and was ready to share the knowledge with Africa.
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This was backed by Andrew Asira of East Africa Development Bank, who explained that the region needs to deepen local capital markets so that projects are funded in local currency.
He gave the example of Lake Victoria now under threat of water hyacinth as one big opportunity for investors to provide a unique solution.
A third of the lake is currently covered by the invasive weed preventing fishing and transport between Kenya, Uganda, and Tanzania.
The leaders spoke at a session on financing during the annual conclave of Confederation of India Industry and Exim Bank of India held at Taj Palace hotel in New Dehli, India.
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.