AfDB, IDB, IFAD Vote Additional $1bn To Fund Nigeria’s Agribusiness In 24 States

October 30, 2023 News Editor

The African Development Bank (AfDB), Islamic Development Bank (IDB) and the International Fund for Agricultural Development (IFAD), have voted $1 billion to further deliver Special Agro-industrial Processing Zones in 24 States of Nigeria.

This is in addition to an initial $520 million voted by the development partners for the development of eight special agro-industrial processing zones in Nigeria.

President of African Development Bank Group, Dr. Akinwumi A. Adesina, made this disclosure at the on-going Norman Borlaug International Dialogue, World Food Prize 2023, in Des Moines, Iowa, United States of America.

Delivering his address titled, “From Dakar to Des Moines,” Adesina noted that the decision to pump such huge funds into Nigeria’s agribusiness was part of the resolve to develop Special Agro-Industrial Processing Zones (SAPZs) in 13 countries.

Explaining that it was the core of the food and agriculture delivery compacts from the Dakar 2 Summit held earlier this year in Dakar, Senegal, the AfDB President said, “We are investing heavily in the development of SAPZs to support the development of agricultural value chains, food processing and value addition, enabling infrastructure and logistics to promote local, regional, and international trade in food.

“The African Development Bank Group is investing $853 million in the development of the Special Agro-Industrial Processing Zones, and it has mobilized additional co-financing of $661 million, for a total commitment of $1.5 billion. We are deploying effective partnerships at scale. We are currently implementing 25 Special Agro-industrial Processing Zones in 13 countries.

“For example, the African Development Bank, Islamic Development Bank, and the International Fund for Agricultural Development provided $520 million for the development of eight special agro-industrial processing zones in Nigeria. The second phase of the program aims to mobilize an additional $1 billion to deliver special agro-industrial processing zones in 24 States of Nigeria”.

Adesina regretted that while much progress had “been made in African agriculture, 283 million people still go to bed hungry in Africa, about a third of the 828 million people that suffer hunger globally.”

He however described the Norman Borlaug International Dialogue World Food Prize 2023, as a “journey and narrative of how we are combining the power of science, technology, policies, and politics to ensure that Africa fully unlocks its agricultural potential, and feeds itself, with pride.”

The AfDB President thanked Vice President Kashim Shettima, and the President of Ethiopia, Sahle-Work Zewde, for participating in the global event, saying their presence is an indication “that Africa has the political will and is fully ready to tackle food insecurity and make hunger history” on the continent.

Also speaking during the sideline chat with the AfDB President, Vice President Shettima who spoke on the Tinubu administration’s initiatives for food security said the quality of present leadership in Nigeria and the rest of Africa will drive transformation in agriculture and other sectors.

According to him, “a nation falls or rises fundamentally due to the quality of its leadership. Right now Africa is blessed with quite a handful of quality leaders that have the drive, passion and skills set to redefine the meaning and concept of modern leadership.

“Bola Ahmed Tinubu, my boss, is a good example, Macky Sall of Senegal and of course, Abdel Fattah El-Sisi of Egypt are doing wonderfully well, just to mention a few of the African leaders that are distinguishing themselves in leadership.

“I want to assure this gathering of investors and stakeholders in the agricultural sector that my boss, President Tinubu is a quintessential 21st century modern African leader who is determined to redefine the meaning and concept of modern leadership.

“Be rest assured that there will be a sea change in the fortunes of the Nigerian nation and by extention the African continent in the next couple of years because Nigeria is an anchor nation”.

On wheat production, Shettima disclosed that “our target towards wheat production in Nigeria is to achieve 50% self sufficiency in the next three cycles. It is inconceivable that we are the second largest wheat importer in the world.

“Luckily, we have already procured the heat tolerant variety of wheat seeds and we are going to drive that process by supporting the farmers with the heat tolerant variety, agricultural extention services, fertilizer and also hope to increase the irrigation areas to one million hectares in the next cropping cycle.

“We need to produce about 2.4 million tonnes of wheat grains in Nigeria. We are going to reach out to our farmers through small irrigation schemes and through digitalisation. All the actors in the value chain will be sufficiently taken care of through innovative finance, partial credit guarantees and crop insurance,” he emphasized.

For rice production, the Vice President said the major challenge for Nigeria is the insufficiency of paddy rice and noted that Nigeria has adequate milling capacity but “we need to produce three to four million tonnes of paddy rice to meet our requirement of about 2.5 million tonnes per annum. We have 75 million hectares of arable land and most of it suited for rice cultivation.”

He added that “we will provide our farmers with certified seeds, fertilzer, extension services, the digitlization of services, inputs, finance and market information. Our target is to achieve self sufficiency in rice latest by 2027.”

Shettima also spoke about the Special Agro-Industrial Processing Zones (SAPZs), reiterating the Tinubu administration’s commitment to providing an enabling environment for investors in the zones.

He said government would create an SAPZ development authority that will operate like a one-stop shop where regulatory and associated issues will be addressed.

Prepaid cards expand in India

October 26, 2023 News Editor

Indian fintech Pepper Money is collaborating with the National Payments Corporation of India and merchant technology company Pine Labs to issue a prepaid card via the national Rupay payment network.

The product, called the Pepper Money Dreams Card, is expected to reach more than a million consumers within the next year.

The card is designed for smaller towns and rural areas, where financial services are not as accessible as in India’s larger cities. Pepper Money will partner with about 100 local businesses in fashion, travel, electronics, dining and health care at launch.

The NPCI estimates the Indian prepaid card market is about $119 billion and is expanding at a compound annual growth rate of 36%.

India’s government has encouraged expansion of non-cash payments for years, often through controversial steps such as removing huge amounts of paper money from circulation and taking a hard line on U.S. payment firms that could cut into Rupay’s share.

Fiserv joins Swift’s partner program

October 26, 2023 News Editor

Fiserv has joined the Swift Partner Program, allowing the bank technology seller to enable connectivity to Swift’s application programming interfaces and support Swift’s Global Payment Initiative.

Swift’s GPI lets parties track payments across different banks and countries through a single source — a capability that’s considered a key cog in Swift’s real-time and cross border payment strategy.

Fiserv is attempting to make it easier for its financial institution clients to offer cross-border digital payments, or to set up digital payments in new countries.

Like many bank technology firms, Fiserv is in the midst of expanding its ability to connect banks to real-time payment networks, which will require technology upgrades to support interoperability across borders.

Canadian tech firms lobby for open banking

October 26, 2023 News Editor

A group of payment technology companies including Wise, Wealthsimple, Xero Canada, Borrowell and fintech industry lobbyist Fintechs Canada have started the Choose More campaign, which is pushing for open banking.

Open banking refers to using data sharing to enable a single log in (usually a payment credential) to access financial and nonfinancial products from other companies.

Adoption of open banking in Canada is relatively low, and there isn’t a formal framework to govern open banking in Canada.

The Choose More campaign is designed to pressure faster work on data portability regulations, while educating consumers about data sharing and real-time payments, which are also delayed in Canada. Small financial institutions and credit unions are also advocating for open banking in Canada.

Nigeria Fintech Week: Keynote Address by Dr. Akinwumi Adesina, President of the African Development Bank

October 26, 2023 News Editor

The first day of Nigeria Fintech Week 2023 was packed with innovative minds from across the financial sector, with eye opening insights to help push the nation’s economy forward.

The first day of Nigeria Fintech Week 2023 was packed with innovative minds from across the financial sector, with eye opening insights to help push the nation’s economy forward.

Dr. Akinwumi Adesina, the President of the African Development Bank, gave a compelling keynote address. His insights shed light on the programme’s theme “Fintech: Resilience, Innovation, & Diversification” in the fintech industry, not only in Nigeria but across the entire African continent and the global fintech arena.

Nigeria Fintech Week has evolved into a pioneering event for financial sector leaders, not just within Nigeria but on a global scale. It serves as a platform for dialogue and collaboration between industry leaders, offering a unique opportunity to explore the latest trends and developments in fintech.

“The theme for this year’s Fintech Week, ‘Resilience, Innovation, and Diversification,’ resonates particularly with the current global economic landscape,” Adesina said speaking through Lamin Barrow, the Director General of Nigeria, African Development Bank (AfDB).

Lamin Barrow, the Director General of Nigeria, African Development Bank (AfDB), representing Dr. Akinwumi Adesina at NFW 2023

“Fintech companies are grappling with the need to adapt to rapidly changing conditions, particularly in the wake of global economic downturns characterized by volatility and heightened uncertainties. These challenges are particularly evident in Nigeria and other African nations, with manifestations in macroeconomic instability, rapid forex depreciation, and rising inflation. Consequently, Africa’s GDP growth has seen a decline, estimated at 2.8% in 2022, down from 4.8% in 2021.”

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Nigeria Fintech Week: Keynote Address by Dr. Akinwumi Adesina, President of the African Development Bank

Joan Aimuengheuwa by Joan Aimuengheuwa October 24, 2023

Nigeria Fintech Week: Keynote Address by Dr. Akinwumi Adesina, President of the African Development Bank

Dr. Akinwumi Adesina, President, African Development Bank

Sifax

Central Bank of Ireland approves Freemarket for European market entry

October 26, 2023 News Editor

London-based fintech Freemarket secures a payment institution licence from the Central Bank of Ireland, paving the way for its expansion into the European Economic Area.

London-based FX fintech Freemarket has been granted a payment institution licence from the Central Bank of Ireland enabling the company’s expansion to Europe. The B2B cross-border payments and currency exchange company now has market access to the entire European Economic Area (EEA).

With an estimated 24.4 million SMBs across the EU, the B2B cross-border payment market is set to grow globally by 43 percent by 2030 giving Freemarket plenty of expansion opportunities.

Founded in 2010, using an API the firm automates the full lifecycle of cross-border payments and consolidates the entire process onto a single platform. It has expanded to Dublin where it now wishes to grow its team and partner with European banks, nonbanking financial institutions and foreign currency providers to support its European expansion.

“We are delighted that our new Irish Payment Institution licence will enable us to expedite our mission to make cross-border payments faster, more affordable and more transparent for millions of European businesses,” says Stephen Fletcher, CEO Ireland, Freemarket.

UAE banks’ gross assets surge to more than $1trln

October 26, 2023 News Editor

UAE banks’ gross assets jumped by 10.7% to more than AED3.9 trillion ($1.062 trillion) at the end of August 2023, compared to the previous year, the Central Bank of the UAE revealed.

The gross assets, which also include bankers’ acceptances, posted a 0.5% increase compared to AED3.8 trillion recorded at the end of July 2023.

The lenders’ total reserves at the Central Bank increased by 34.5% year-on-year to AED486.3 billion at the end of August, while gross credit went up by 5.5% to more than AED1.9 trillion.

Bank deposits reached around AED2.4 trillion in August, up by 10.9% year-on-year and 0.4% month-on-month.

Private sector bank deposits posted the biggest increase of 18% to approximately AED1.5 trillion.

Resident deposits went up by 13.7% year-on-year to AED2.19 trillion.

The UAE’s banking sector was previously forecast to post significant growth in 2022 and beyond, driven by advancements in technology and improvement in the global economy.

In its H1 2023 report, EY noted that the UAE banking sector could further benefit from the recent initiatives that have been introduced to boost the financial sector.

“The banking sector is expected to benefit further from the recent introduction of a host of regulatory measures, aimed at strengthening the country’s overall financial industry along with the Central Bank of the UAE’s vision to be among the top central banks globally in promoting monetary and financial stability…,” the report noted.

Emirates Islamic is latest UAE bank to hit a record on 9-month 2023 profit, at Dh1.65b

October 26, 2023 News Editor

Emirates Islamic Bank’s third quarter 2023 returns were particularly impressive.

Record highs are what UAE’s leading banks are reporting with their nine-month results for 2023, with Dubai-headquartered EIB seeing a 56 per cent growth in profit to Dh1.65 billion. It was put together by higher ‘funded and non-funded income’ and which in turn reflected ‘improved business sentiment’.

In the July to September period alone, the Emirates Islamic Bank income grew 46 per cent from a year ago period to Dh1.2 billion. On the expenses side, they were up 35 per cent at the end of the nine months, given the focus to invest for future growth.

“We have seen growth across all our operating segments, including consumer, business and corporate banking segments,” said Farid Al Mulla, CEO. “The bank’s Sukuk book size reached a record Dh10 billion, marking both the highest absolute value and the highest percentage of total assets to date.”

We have seen growth across all our operating segments, including Consumer, Business and Corporate banking segments.

– Farid Al Mulla

Total assets shot up 15 per cent to Dh86 billion as customer financing grew 7 per cent to Dh52 billion. These are the headline numbers for EIB at the end of September:

Total assets increased to Dh86 billion and ‘maintaining a solid asset base’.
Customer financing topped Dh52 billion, which is 7% up from 2022.
Customer deposits came to Dh61 billion, an increased of 7% from 2022. CASA balances were at 75% of deposits.

Paris won the race for banking jobs after Brexit. What’s next?

October 25, 2023 News Editor

Frankfurt was ready to celebrate.

Only a year after the 2016 Brexit referendum, the vast majority of US banks had set up their EU hubs in the German city. International school places were being block-booked ahead of relocations from the UK and property prices were rocketing.

But the French government had other ideas.

Emmanuel Macron, victorious after defeating far‑right candidate Marine Le Pen in France’s presidential elections, started courting the world’s biggest investment banks.

“Their people were texting our people photos of magnificent, historic buildings we could open trading floors in, saying they had amazing food and great infrastructure,” said the CEO of one major Wall Street bank. “They said they would cut income taxes, corporation taxes and make it easier for us to fire people. Everything they said they would do, they did.”

Six years on and while Frankfurt remains the formal EU headquarters for many banks, Paris has won the battle for talent.

Bank of America was the first of the Wall Street banks to nail its colours to the Paris mast after Brexit. It now has 600 staff in the French capital, 180 of whom work in fixed income sales and trading roles — that’s up from 20 before Brexit.

Goldman Sachs had just 17 people in Paris before Brexit — it now has 500. JPMorgan has 900 staff in its Paris office, around 600 of whom work in markets; it plans to up that to 1,000. Citigroup and Morgan Stanley are also all building in Paris.

“There are huge opportunities coming out of Paris,” said Vanessa Holtz, CEO of BofA Securities Europe SA and France country executive. “Since Brexit, the landscape has become even more dynamic and competitive. Paris has established itself as a major European financial centre and now offers a very wide spectrum of financial services.”

A talent crunch

However, Paris’s success as an EU financial centre is facing growing pains. The surge in international banks has led to a talent crunch as firms switch from relocating staff from London to hiring on the ground. Meanwhile, highly paid traders are scrambling for limited places at top international schools after moving their families from the UK.

“We’ve been moving people from London to Paris, but there are plenty of employees who have family ties in the UK who don’t want to move and that makes it more complicated, because very often we have to recruit locally and that is challenging,” said Fabio Lisanti, head of European markets at Citigroup, who moved to the French capital last year.

“There’s a big ecosystem of talent in Paris, but it’s not as liquid as London,” said Marc d’Andlau, co-head of Goldman Sachs’s Paris office. “It will happen, but a lot of people who have relocated are happy in their jobs right now.”

That talent crunch is leading to friction with French banks, which have had to battle an exodus of staff. The likes of BNP Paribas, Crédit Agricole and Societe Generale have scores of markets staff in Paris, but the incoming US firms offer bigger pay packets and have more financial firepower. That enables the them to poach some of the native banks’ best staff, frequently offering them a 30% premium and more capital, which in turn feeds through to bigger bonuses.

One head of markets at a top US bank said he had arranged to have lunch with a peer at a French rival. But when details emerged about a big hiring spree at the Wall Street lender, they suddenly cancelled. They’ve never rescheduled their lunch.

“This clearly rubs them up the wrong way,” the head of markets said. “We’re taking their best people, but so are seven of our rivals and some hedge funds. It’s driving up their costs massively.”

Hedge funds including Millennium Management, Point72 and Exodus Point have also been expanding in the French capital and that’s having an effect, too

“The arrival of hedge funds in Paris has prompted people on the ground in banks to move,” said Goldman’s d’Andlau. “That may create more movement in the job market.”

“We had to work hard on talent retention because we were the first bank to set up in Paris, and as a result we have been one of the obvious places to hire from,” added Jan Smorczewski, co-head of Emea FICC trading at Bank of America. “However, as Paris has grown into a significant hub, it has also helped attract talent.”

Paris is a key battleground that banking leaders are still trying to work out

One reason many traders are content to stay put is France’s Le régime des impatriés — commonly known as the ‘expatriate tax law’. This offers tax breaks that can see up to 30% of expats’ earnings remain tax-free and was key in luring highly paid traders to Paris.

But the benefit disappears when employees move jobs, meaning that any potential new employer has to shell out more to make up for traders’ lost earnings. Banks and lobby groups are pushing for change, Financial News reported, in a bid to allow talent to move more freely.

“We’ve hired some amazing people from domestic platforms that have really benefited from joining a platform like ours where there is more balance sheet,” said Citi’s Lisanti. “We’ve uncovered some exceptional talent, which were underperforming because of their current platform.”

While the infrastructure in Paris is well-developed, there has been some strain on the residential rental market as bankers have flocked to the French capital. Many have clustered around the well-to-do 15th and 16th arrondissements, which is pushing up prices, according to conversations with senior bankers.

Estate agent Savills said rental prices in Paris have increased just 3.6% since 2016, compared with 7.6% in London and 15.3% in New York. But demand for property is high, according to Kelcie Sellers, an associate in Savills’ world research team.

“The rental market in Paris has seen high levels of demand, particularly for prime furnished assets, with demand emanating from expats returning from Asia, London bankers, and French nationals looking for a pied-à-terre to use for a few days during the working week,” she said.

Meanwhile, senior traders and bankers relocating from the UK have also complained about the lack of places available for their children at international schools in the French capital. One school is particularly popular, senior bankers told FN — L’École Jeannine Manuel, which charges up to €28,000 a year for higher education.

“It’s becoming very hard and complicated to get in,” said one senior trader. “It’s something that needs to be looked at.”

Why Paris?

Paris became the preferred location for most major investment banks because they were being led by staff demand, senior bankers said. Many bankers or traders, unable to deal with clients in the EU after Brexit, faced the stark choice of relocating to the bloc or losing their jobs. The French capital, which is just a two-hour Eurostar journey to London, became the popular choice.

“In the immediate aftermath of Brexit, we didn’t have a grand plan to focus on France, but we wanted to increase our presence in continental Europe,” said Goldman’s d’Andlau. “But step-by-step, Paris has become the preferred location for a lot of our staff over other cities, so that drove some of our thinking. The pro-business agenda under President Macron was also very helpful.”

“The biggest driver for us choosing Paris was access to talent, and the ability to more easily persuade people to move from London than to other European cities,” added Citigroup’s Lisanti. “People are now permanently relocating, but the Eurostar and ease of access to London definitely has a bearing on people’s willingness to move.”

Paris has already seen an influx of bankers bringing in big pay packets. The European Banking Authority said in its latest EBA Report on High Earners that there were 371 bankers earning more than €1m in France in 2021; this was up from 226 a year earlier.

“It was a move born out of necessity, but one that has turned into a real competitive advantage,” said Jim DeMare, president of global markets at Bank of America, about its EU hub. “We hear that from our clients. We see it in our flows.”

Building up

After the initial flood of Brexit relocations, banks are now focused on building out their operations on the ground as they get more established.

Jean-Charles Simon, chief executive of Paris Europlace, which develops and promotes the French financial sector internationally, said France is now looking beyond front office jobs. It is also hoping to attract banks from emerging markets as well as the US, Canada and other countries.

“The biggest international banks are continuing to expand their workforce, but I think we have the potential to continue to grow in financial services in different kinds of activities and jobs,” he said.

Citigroup is in the process of opening a new trading floor in its Paris office that will house 80-90 people in addition to its current space, which contains 130 staff. It plans to end the year with around 170 employees in its markets business and will expand to 250 over the next couple of years, Lisanti said.

It is now considering revamping its internship programme in Paris to mirror its London scheme. Students would then come in for nine weeks over the summer, rather than for an extended period as per the French system.

“We are growing from within in a tight labour market and this means recruiting from entry level,” said Lisanti. “The summer internship allows us to hire international students, rather than relying on French‑style internships that tend to attract only students from French universities.”

Bank of America is also likely to expand into other areas, Holtz said.

“We plan to build on our success in Paris and continue to offer our global connectivity to clients in France and the EU more and more products, services and counsel to help them meet their ever-evolving needs in France, the EU and around the world,” she said.

The French expat community

For all the growing pains around France as a financial centre since Brexit, senior bankers said that it has developed from a relative backwater for international banks into a place where employees are choosing to be based for the long-term.

“If you move to Paris, you are no longer moving to an office of 20 people — it’s a chance to have a career that simply wasn’t there before Brexit when it would have been seen as a hardship posting,” said Lisanti. “People can see it’s a growing office and a little bit more entrepreneurial. Our people are moving with their families, so it’s a community.”

Banks want to see their Paris offices less as French outposts and more as European hubs with a multitude of backgrounds and nationalities, bankers said.

“Before Brexit, it could be tough to convince people to move to Paris, because they felt removed from Goldman’s main business in Europe,” added Goldman’s d’Andlau. “That has changed and people are embracing the new careers they can have in France. We have 26 nationalities in Paris and people are now happy to be here.”

Culled from Financial News

Britain scraps cap on banker bonuses inherited from EU

October 25, 2023 News Editor

Britain on Tuesday scrapped a decade-old cap on banker bonuses inherited from the European Union, signalling a clear divergence in post-Brexit financial rules from the 27-country bloc it left in 2020.

Britain was outvoted in the EU when the cap was introduced in 2014 to try to prevent the kind of behaviour that led to the global financial crisis of 2008 and its accompanying taxpayer bailouts of lenders.

The move to ditch the cap drew criticism from trade unions and campaigners on Tuesday, who dubbed it inappropriate at a time when many households were struggling in a cost of living crisis.

Most bankers affected by the cap are based in London, and the Bank of England (BoE) has long said the cap, which limits bonuses to twice basic pay if shareholders approve, has simply led to higher fixed salaries to circumvent it.

The BoE and Financial Conduct Authority proposed scrapping the cap in a public consultation earlier this year, and its abolition was confirmed in final policy published on Tuesday.

Both regulators have a remit to aid the competitiveness of London as a global financial centre as it competes with New York, where there are no bonus caps.

Allowing bankers to implement the change earlier than originally proposed will also help them meet their goal.

In a joint statement, the regulators said the changes would enter force from Oct. 31, earlier than the original 2024 proposed start date.

“We support the removal of the bonus cap, which will ensure the financial services industry is globally competitive and make the UK a more attractive place to work for international professionals,” banking industry body UK Finance said.

GRADUAL SHIFT FROM CAP

The change is still probably too late for some banks to adapt their systems in time for this year’s bonus allocations that will be paid in early 2024.

In any case, bonuses may not rise for bankers on a high basic salary that contractually cannot be reduced, as banks try to avoid allegations of adding to inflationary pressures.

A source at one multinational bank, who declined to be named, said it was too early to say if this year’s bonus round would be affected, adding that while the change was disruptive it could help attract talent from the United States and Asia.

The regulators said companies had full flexibility over when or if they changed pay structures.

“What is more likely is that the shift away from capped bonuses will evolve gradually,” said Suzanne Horne, a partner at Paul Hastings law firm.

Other curbs on bonuses remain, such as requiring 40% to be deferred over at least four years, with half the bonus paid in shares, making it easier for regulators to claw back awards if any misconduct emerges.

The TUC confederation of labour unions said the decision to scrap the bonus cap was “obscene”.

“At a time when millions up and down the country are struggling to make ends meet – this is an insult to working people,” TUC General Secretary Paul Nowak said in a statement.

Positive Money, a group that campaigns for a fair financial system, called the policy a “risky move” that prioritised banks over public wellbeing.

Law firm Linklaters said scrapping the cap puts Britain back into line with the rest of the world, apart from the EU, but it would continue to apply to staff working at EU banks in London who are regulated under the bloc’s rules.