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Standard Chartered shuts operations in 5 African countries, reviews stands in 2. Here’s why

Published

3 years ago

April 16, 2022

Standard Chartered Bank said it has decided to end its operations in seven countries in the Middle East and Africa. According to the Group, the decision is “as set out in its full-year 2021 results presentation to accelerate its strategy, deliver efficiencies, reduce complexity and drive scale.”

The decision was made public in a statement africanewswatch.com retrieved on the company’s website.

“Today the Group announces a set of actions to redirect resources within its Africa and the Middle East (“AME”) region to those areas where it can have the greatest scale and growth potential, in order to better support its clients.” The statement reads.

The decision is however subject to regulatory approval as the Group now intends to exit onshore operations in seven markets in AME. “The seven markets where there will be a full exit of operations are Angola, Cameroon, Gambia, Jordan, Lebanon, Sierra Leone, and Zimbabwe.”

Standard Chartered also reviewed its position in two other African countries. “In Tanzania and Cote d’Ivoire, the Consumer, Private and Business Banking businesses will be exited and the focus will turn solely to CCIB.”

The exit decision is a course for worry, particularly for African countries, many of which largely depends on foreign investment to drive their economy. Exit or lack of foreign investment are developments that threaten fragile economies like Africa. Slamreportsafrica.com reported on Thursday that Ride-hailing company, Uber, has suspended its services in Tanzania as a result of regulations that are not business-friendly which has made its operation in the East African country.

Also recall that Nigeria’s official data source, for one of Africa’s biggest economies earlier this month, released data (Pdf), which indicated that 24 out of 36 states of the Nigerian Federation got no Foreign Direct Investment (FDI) in the year 2021.

As Standard Chartered Group CEO, Bill Winters, said, the group as with other profitably structured companies “focuses on the most significant opportunities for growth while also simplifying business”, African countries most beyond their leaders holidaying across the world in the guise of looking for foreign investors, rather position their economies for growth opportunities for potential investors.

Related Topics:Africa Economy Featured standard bank

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Finance minister says reduced oil prices pressuring Angola

Published

1 hour ago

October 26, 2024

Ifeoluwa Dada

Angola’s finance minister has told journalists that falling oil prices put “lots of pressure” on the nation, predicting that prices would average between $70 and $72 per barrel in 2024 as opposed to $75.

In an interview conducted on the fringes of the IMF and World Bank annual meetings in Washington, Finance Minister Vera Daves de Sousa stated that the government of the continent’s second-largest crude oil exporter will likewise keep phasing down fuel subsidies.

“How many steps we didn’t decide yet, but our idea is to do it in steps,” she said, confirming that subsidies were amounting to around 4% of GDP this year.

At the start of this year, Angola departed from the Organisation of the Petroleum Exporting Countries.

On Friday, Brent crude futures rose 2.25% to $76.05 a barrel. Analysts have cautioned that next year’s high supply and weak demand will put pressure on oil prices.

According to Daves de Sousa, the administration will submit its budget to Parliament the following week, and during the next few days, the numbers regarding the amount of outside funding that will be required will be finalised.

Angola is considering internally whether to apply for a loan program from the International Monetary Fund, she said.

“We asked for a note with options of programs in case we request, and considering our current situation, what they understand as a good program for us,” she said.

According to her, the administration was also looking at other options, such as combining funds from domestic banks and capital markets with support from other multilateral sources like the World Bank and the African Development Bank.

Angola’s most recent IMF program, worth $3.7 billion, was approved in December 2018 after the country’s earnings were severely damaged by the collapse of global petroleum prices.

Angola’s finance minister has told journalists that falling oil prices puts “lots of pressure” on the nation, predicting that prices would average between $70 and $72 per barrel in 2024 as opposed to $75.

“How many steps we didn’t decide yet, but our idea is to do it in steps,” she said, confirming that subsidies were amounting to around 4% of GDP this year.

At the start of this year, Angola departed from the Organisation of the Petroleum Exporting Countries.

On Friday, Brent crude futures rose 2.25% to $76.05 a barrel. Analysts have cautioned that next year’s high supply and weak demand will put pressure on oil prices.

Angola is considering internally whether to apply for a loan program from the International Monetary Fund, she said.

“We asked for a note with options of programs in case we request, and considering our current situation, what they understand as a good program for us,” she said.

Angola’s most recent IMF program, worth $3.7 billion, was approved in December 2018 after the country’s earnings were severely damaged by the collapse of global petroleum prices.

VenturesNow

IMF recommends exporting African countries make crucial changes. Here’s why

Published

1 hour ago

October 26, 2024

Ifeoluwa Dada

Abebe Aemro Selassie, director of the International Monetary Fund (IMF) Africa, has stated that countries in Sub-Saharan Africa that rely on commodity exports must change their economies to address uneven regional economic growth.

According to the IMF’s most recent World Economic Outlook, which was released this week, the region is predicted to develop by 3.6% this year, which is unchanged from last year and lower than an April prediction of 3.8%. Commodity economies are likely to lag behind their more diverse rivals.

According to the IMF’s assessment, the growth of the commodity-intensive nations is around half that of the rest of the region, with oil exporters bearing the brunt of what it called “subdued and uneven” regional growth.

“South Sudan, Nigeria, Angola are all very much in that camp,” Abebe told Reuters.

The IMF’s regional economic outlook for Sub-Saharan Africa was released on Friday, and while diverse economies like Senegal and Tanzania are predicted to develop at a rate higher than the regional average, Nigeria would only grow at a rate of 2.9%.

“They have had very large macroeconomic imbalances, financing challenges which have held back growth,” Abebe said.

He claimed that because those issues had led to rising inflation and pressure on the expense of living, the Nigerian government needed to “squarely address” them.

The administration of President Bola Tinubu has started a number of measures that it claims are intended to boost economic expansion and draw in foreign investment. The IMF predicted that South Africa, whose growth has been hampered by debilitating power outages, would expand by 1.1% this year.

The IMF stated that armed conflicts are also impeding growth, pointing to the fact that South Sudan’s oil exports are impeded by fighting in neighbouring Sudan, where the crude export pipeline is located.

“They (oil exporters) need to find new sources of growth, get more private sector investment – so working on reforms that will facilitate that is important,” Abebe said.

According to the IMF research, Sub-Saharan Africa’s economic growth is anticipated to improve marginally to 4.2% in the upcoming year.

Although Sub-Saharan Africa accounted for almost half of the world’s 20 fastest-growing economies this year, the research issued a warning that greater growth rates were necessary to combat pervasive poverty and inequality.

According to the IMF, as nations grapple with high debt loads and high debt servicing costs, one of the primary barriers to higher growth is a lack of access to inexpensive financing.

The fresh money was expensive, even though some nations were able to sell bonds on global capital markets this year after a two-year break brought on by geopolitical shocks and high interest rates in developed nations like the US.

“The old development finance architecture is not delivering, and, if anything, kind of is in the process of disintegrating,” Abebe said, citing “very problematic levels” of official bilateral funding for poor countries.