Ecobank Transnational Incorporated is considering exiting some countries where it is presently facing decline in profit margin as part of holistic review of its business model going forward.
This followed a declaration made by Ecobank’s Chairman, Emmanuel Ikazoboh and reported by Reuters thus: “In the last pocket of least promising countries, we really want to take a decision as to whether we continue to operate in those markets,” said Ikazoboh.
But the bank quickly reacted to the statement of its chairman, saying it does not plan to close any of its subsidiaries. It confirms that “Ecobank is currently reviewing its business model… However, this does not in any way translate to the planned closure of any of subsidiaries.”
Despite the statement, the Group admitted that under its revision process, it could exit some products from its markets or close some branches, but in case would fully exit any country as this is highly complex.
“The closure of any Ecobank subsidiary would require a thorough situation analysis and approval by the Board of Directors and shareholders of Ecobank,” said Uku.
Ecobank is present in 36 African countries and is currently the largest group across the continent.

Meanwhile, in its annual report, Ecobank revealed that while reducing wages of its personnel by 9% in 2015 to $525 million from $576 million, it paid its executive directors $7.3 million. This figure which includes salaries and short-term benefits rose by 9% compared to 2014’s $6.6 million.
Ecobank recently sacked hundreds of staff in Nigeria, claiming it was a cost reduction measure in view of declining profit.
The Group explained the increase by the need to draw more talents, as well as protect its executives against some of the regulations implemented in the markets where it is present. The group takes into account governance regulations that hold Board members individually and collectively responsible for its actions.
“Consistent with Ecobank’s objective of being an employer of choice in our markets and attracting the best talent, Senior Executives are compensated with a mix of fixed compensation (salary, benefits and pension) and variable compensation (bonuses and share options scheme),” said Ecobank in its report.
In opposition to executive directors, non-executive directors of the Board of Administration received a total remuneration of $1.4 million, down 4% compared to 2014. Non-executive directors receive fixed fees of $100,000 per annum for services on the Board of ETI. The Chairman receives $150,000.
In addition, Directors receive sitting fees for attendance at Board and for attendance at Board and Board Committee meetings.
However, the group added “non-executive directors do not receive any short-term or long-term performance incentives”. Some of them which are shareholders will nevertheless receive part of the $48.2 million dividend recommended in 2015.
Let’s recall that the group’s performances, provision excluded and at constant exchange rates, were not strong. Net global profit generated in 2015 across the group’s various representations was $420.3 million against $530.2 million in 2014.
According to its consolidated financial statements, the Group’s profit after tax stood at $107.5 million against $394.7 million the previous year, thus slumping by 73%.
Remuneration should keep decreasing in 2016, as Ecobank plans to, in various markets, close some of its agencies and retrieve some of its products from these markets. This should lead to job cutting.

–Idriss Linge

The Board of Directors of the African Development Bank (AfDB) approved on Monday, June 27, 2016, in Abidjan, US $300-million and US 50-million Trade Finance Loans to First Bank of Nigeria (FBN) and FSDH Merchant Bank Nigeria (FSDH), respectively.
The two facilities are part of the AfDB’s broader efforts to provide countercyclical support to the Nigerian economy at a time of falling commodity prices, which has caused shortages in foreign currency supply and led to unmet demand for trade finance instruments to support Nigeria’s on-going economic transitions. The facilities will support local enterprises involved in import-export activity.
The Project will help address critical market demand for trade finance and dollar liquidity by supporting vital economic sectors such as agri-business, chemicals, construction, engineering, food processing, manufacturing and non-traditional exports.
It will foster financial sector development, enhance regional integration, contributing to increased government revenue generation at a time when the Nigerian economy is facing fiscal pressures and foreign currency liquidity challenges.
It will enhance support to domestic enterprises whose businesses are being hamstrung by shortages in dollar funding. If fully utilised, counting rollovers, the interventions are expected facilitate about US $2.5 billion of export-import related activity in intermediate and finished goods, raw materials and equipment to support economic growth and tax generation over a 3.5-year period.
The facilities will contribute to the attainment of AfDB’s five operational priorities (the High 5s), namely: Light up and Power Africa, Feed Africa, Industrialise Africa, Integrate Africa and Improve the quality of life of the people of Africa.
The project also aligns with AfDB’s Ten Year Strategy, particularly the Bank’s Financial Sector Development Strategy, which seeks to increase access to financial services for the underserved, and broaden and deepen Africa’s financial systems.
It also aligns with the Bank’s Private Sector Strategy by contributing to the improvement of the investment and business climate in Nigeria with medium-term trade finance; promoting enterprise development through increased access to appropriate levels of trade finance for SMEs and local corporates.

The African Development Bank (AfDB) recently endorsed its “Feed Africa: Strategy for Agricultural Transformation in Africa 2016-2025 project” which aims to develop a competitive agro-food industry in Africa and improve living standards of agriculture-depending populations.
In fact, between 315 and 400 million dollars will be injected in 15 priority commodity value chains in order to achieve self-sufficiency in key commodities and “move up the value chain in key export-oriented commodities cocoa, coffee, cotton, cashew.”
The bank which projects a yearly return on investment of $85 billion in case the project is fully-funded, will directly invest $24 billion and mobilise the remaining funds through diverse mechanisms.
Emphasising on the importance of this program, AfDB indicated that Africa imports every year $35.4 billion of food products while it detains 65% of the world’s unexploited arable lands.
–Aaron Akinocho

In a statement published on June 22, Africa Finance Corporation (AFC) announced it has obtained a $150 million loan from the German bank KfW, to finance infrastructure projects in Africa.

The agreement related to the loan, repayable over 15 years, was signed in London by AFC’s CEO, Andrew Alli, and KfW’s infrastructure division’s head, Jan Martin Witte.

“Not only will this loan facility from KfW add valuable capital to our finance reserves but the 15-year tenor period is particularly suited to funding the long-term, large-scale infrastructure projects that are so needed across Africa,”said Andrew Alli, cited in the statement.

AFC is multilateral financial institution established in 2007 with an initial capital of $1.1 billion and whose mission is to mobilise investments for Africa’s infrastructure sector.

Its shareholders are the Central Bank of Nigeria (42.5%), other African commercial banks like Ecobank, United Bank of Africa and First Bank of Nigeria (47.6%) and other investors (9.8%).

Overall, the institution has mobilised $2.5 billion of investment for Africa.