Arnold Ekpe - CEO Ecobank Transnational Inc HARDtalk


Arnold Ekpe - CEO Ecobank Transnational Inc

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President Obama's plane. Six of the world's 10 fastest

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growing economies are in sub- Saharan Africa. The World Bank

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predicts a decade of African growth which Europe can only dream about.

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But how realistic is the excitable talk of economic transformation in

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the world's poorest continent? My Guest is Arnold Ekpe, CEO at

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Ecobank, which boasts 8 million customers across 32 African nations.

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Economic opportunity beckons. A African's ready to seize it? -- are

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A Arnold Ekpe, welcome to HARDtalk. You have lived a life devoted to

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business and finance in Africa. Does this feel like a turning point

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to you? I think so. I think what we're seeing in Africa has been

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evidence of sustainable growth. It will be a better time for abaca.

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People have said that before at the last 20 or 30 years. Applicants

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have expressed great confidence that a corner has been toned and

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the Continent is on a new park. They have been wrong. I think there

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have been certain changes that we have to take of -- account of. For

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the first time, the GDP in Africa is growing. Global economics have

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changed. Africa is now benefiting from better terms of trade, much

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more need for African commodities, and major changes. Democracy has

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taken root in Africa, the middle classes rising. The signs are

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positive. The biggest in the long run are amazing. The prediction is

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that there will be almost 1 billion middle class applicants by 2060.

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But in the more immediate short- term, African economies are still

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heavily reliant on exports to Europe, Asia, to none African

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economies. It seems that in a moment of great economic stability,

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Africa remains vulnerable. That is correct. Africa is potentially bomb

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rubble. We have seen the ability of the African governments and to

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decision-makers to manage economy is much better than they did in the

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past. I think the impact of any slowdown in global economy -- The

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Club economy will be less in terms of the overall impact. The Nigerian

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Central Bank governor warned not long ago that serious spillover at

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risk from the eurozone crisis -- he warned of this risk. Do you see

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this risk? I think there is some risk. If European banks decide to

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reduce credit for international trade, that is bound to affect

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every Cup. If China and Europe slowed down, the demand for African

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commodities will come down. I want to talk about your bank, your

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strategy and your vision for the future. It seems to me that what

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underpins your business life is something that goes beyond

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economics and is almost emotional. I have read things that you have

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said in the past. For Ekka Bank -- Ecobank, have said at the pay is

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your strategy. You see opportunity. You believe the NAB Cup. That does

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not sound economic so much as emotional. That is not exactly true.

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We're being very pragmatic. Bankers and businessmen. We present

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shareholders with a good return. But I think Ecobank is a good

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example. We have tried to Kobe and banking and see what is positive

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and at the Kop. We took a view that the wars and under development

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would not continue forever. Advocate -- Africa would emerge.

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Most people who work for Ecobank will tell you that it is not just a

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band. It is a movement for change. You have used the word at the

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Palace of it is a sort of monolithic Continent. One of the

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things we have seen recently is that as some parts of the African

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continent have begun to thrive, we have seen a greater fragmentation

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of the Continent. Other countries like Mali or Chad or Guinea-Bissau

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uttering horribly badly. There are bound to be blips along the way of

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development. Africa is the Continent of 55 countries. -- a

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Continent. They will all grow at different rates. But overall Africa

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is growing. The future of app allies in further integration

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rather than fragmentation. I am wondering whether there are many

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business leaders and political leaders in Africa today who think

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about the interests of the Continent as a whole be on to their

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own national short-term parochial interests? I think there are very

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many. I have been doing banking in Africa for 32 years. What is not

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often realised is how much Africans are investing in Africa. The PIC of

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South Africa is investing 7 billion. It is the Public Investment

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Corporation. A Nigerian businessman is looking to invest 3 billion.

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cement King, one of the richest man on the continent? He is investing 3

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billion in Africa. There is a bully for NAB Cup. You proudly announce

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that you employ more Africans than any other bank on the continent

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across 32 nations, but some of the activities and operation to have a

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run in countries where it seems the opportunities for you to make money

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amid political uncertainty must be minimal. That has been built into

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our business model. We accept that there might be occasional problems

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in some countries. It is more than that. Surely you wake up as CEO,

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switch on the radio and wonder whether the assets you have been a

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country like Mali are still in existence? As we speak, we have put

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into practice in Mali. -- 42 branches. Is this a viable model?

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think in the long-term it is. Condition -- companies like

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Guinness, Nestle, Unilever, they have never left Africa. Mabey ask

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you how banks work in Africa? Across many countries in Africa, it

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will be different than people might be used to. How would you reach out

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to the hundreds of millions of Africans who will not necessarily

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see a bricks-and-mortar bank in that town? One aspect of banking in

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which Africa is a leader his mobile banking. There are more applicants

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using mobile banking platforms for payments than in any other part of

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the world. We have seen in nations like Kenya an extraordinary number

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of people doing their financial business by mobile telephone. How

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far can that go? My belief is that it can go very far. Kenya has up to

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60%. It is used for basic banking. I think that is really the bulk of

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banking for most people and Africa. Banking penetration in Africa will

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ride on top of mobile penetration. We can't get away from the trust

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issue. In the west we have had a profound problem with trusting

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banks that we have traditionally relied upon. Ken Africans trust

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African Bank's? I think they're doing so. And I think they should.

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Banking is a means for economic development. Banks are necessary.

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But to make a decision about whether or not to trust a financial

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institution, people need transparency and accountability.

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They need to know how a bank is being run and whether a reasonable

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risk is being taken. Whether the people running the banker a must.

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Can they be confident of the Avoca? I think the regulators and

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effort they have done a pretty good job. Let me bring a specific case

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to you. Oceanic Bank. Four years ago, I sat in the office of one of

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Nigeria's best known bankers. The CEO of oceanic band. She told me

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she was running a dynamic new sort of bank. Cheers -- she used some of

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the language used about her ambitions and hoped for Africa. Two

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years later, she was in prison, convicted of fraud and charged with

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$1 billion worth of ASIC fraud. You have taken over that Bank, how can

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we be sure that some of the practices she was responsible for

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had not continued? I think the Central Bank of Nigeria had two

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years to clean out the bend. Ecobank has a reputation across the

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two countries that it operates within full compliance of rules and

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regulations. But those rules and regulations failed to stop Oceanic

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Bank from open of many people in the past. Have they really been

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strengthened so much that it can never happen again? I don't think

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happen again. But in Africa, regulators have become more

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stringent to the sort of abuses just about banks. You are in a

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part of an part of an system. The economic Intelligence Unit did a

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very interesting survey of business perceptions in Africa. More than

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concern as corruption. The next biggest concern was barely out of

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governance and regulatory authority. -- failure of governments. These

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are profound problems you presumably have to deal with every

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day. Corruption is a matter of choice. We have taken the view that

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we would rather not go that part and run a b and run a bm. We

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band band that has integrity and which

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operates within the rules of the country. That is what we have done

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for the last 24 years. Your answer suggests that some of your

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competitors may take a different view. A view of cutting corners?

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can't speak, competitors. You must consider what the model will work.

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Before Ecobank, he worked for Citibank. I believe they had major

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operations in Latin America. It was almost a running joke in Citibank

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that you could either be a morally good band or you could be a

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successful band but not both. Is that the choice you have to make in

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Africa? We have chosen to be a good band. I think in the long run --

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the long run, could banks become successful. You think you can

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change the paradigm? I think if circumstances change, the paradigm

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something something many people want to know

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about. Are you confident that Ecobank and other African home-

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grown banks can co-exist with and thrive in an environment where

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outsiders increasingly want to get I am convinced that is the case.

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The largest banks in the UK are British. The largest banks in China

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are genies. I think the largest banks in Africa will be African.

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But they are not right now. They are on the way. Your profits are

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dwarfed by a Standard Chartered and JP Morgan. African banks are not

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tossing the growth. -- charting. are seeing African banks filling

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that space that has been left by the victories of international

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banks. Maybe that was the story of last decade but the story of this

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decade is different. JP Morgan are pouring investment into Africa.

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Standard Chartered are very proud of their expansion plan in Africa.

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This is a reality you have to face. I have been in this business for 22

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years. We have had this story before. Africa it is a strategy. We

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own one of the largest banks in Liberia. We will see. It is not

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just about Western banks. Perhaps more importantly is the question of

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China. It is pouring money into African economies. You cannot

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compete with them. But we can do business with them. It is a small

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operation. You have won a small office in Ghana. To take the

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example of Ghana, I believe the Chinese have offered various loan

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facilities to the Ghanaian government, worth more than a $10

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billion. A lot of the loan money that is going over to Ghanaian

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Enterprises coming -- enterprise is coming from China. I do not think

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that is a problem. We begin to play a role where we support government

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efforts. For example we have been financing crude oil exports from

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Nigeria to Ghana. Many foreign banks do not want to take the risk

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but we took the risk because we have operations in both countries.

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When you look good the new Chinese way of doing business in Africa and

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you know it is a no questions asked deal where China gets what it wants

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with commodities and in return it sells man defected goods to Africa,

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offering loan facilities and capital to Africans. Is it the sort

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of deal that you think is in the best interest of Africa's in the

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long run? China brings a different flavour to investing in Africa. It

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does not mean it is worse or better, it is different. Africa needs as

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much support and capital to develop its infrastructure, to develop its

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cities, to build power plants. That can come from the West or China. We

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have to decide in Africa the terms under which we accept the help.

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That is what most people are trying to come to terms with. It is a

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different approach to the West. It is not necessarily better or worse.

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Do you think African leaders are getting it right in terms of the

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deals they are striking? I am thinking of Angola where billions

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of dollars has been put in by the Chinese government. We know, for

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example, from NGO campaigners like Rafael Marques, a well-known

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Angolan activist, some of the highways built by the Chinese and

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the hospitals they have constructed, some of the housing they have put

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up, is of poor quality. Some is falling down only years after it

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has been built. That is not good for for Picken it is not just the

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Chinese that can build housing that falls down -- not good for Africa.

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In many markets we have seen if they have brought positive things.

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New stadiums, schools. They have done many positive things. It is

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easy to pick on one or two negative things. You have talked about York

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rove across Africa and we have talked about specific economy is

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but there seems to be a specific point to be made -- York -- your

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growth. Alongside the growth we have the growing gap between the

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poor and the rich. Inequality is growing as the size of the economy

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is growing. A business leader -- as a business leader in Africa what do

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you intend to do about it? Provide opportunities to alleviate their

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situation. We are also running microfinance bangs in advocates to

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focus on wealth-creation rather than poverty -- banks. So we are

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doing our little bit to support the development of Africa and reduce

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the gap between the rich and poor. This goes back to the beginning and

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me talking about this sense of African-ness, do you believe for

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the transformation to continue in Africa there has to be a more

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common purpose amongst African businesses and political leaders?

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So there must be more integration of the African economy? I think

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that is the case and that is beginning to happen. In the past

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the focus has been on fixing political issues, the Waughs and

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lack of democracy. As that is going away we are seeing a greater focus.

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I am spending a bottle time with decision-makers and we are trying

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to look at improving the economic well-being of countries. That is a

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good thing. Some of the African visionaries of the past talks about

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currency union and even a United States of Africa with a political

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union. If we are realistic we have seen some form of currency union in

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western Africa but beyond that it has never happened. In terms of

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freedom of movement, free Labour movement, border controls, all

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sorts of other things, Africa, far from co-ordinating and into racing,

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seems as fragmented as ever? -- integrating. That is ours entirely

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true. Five African communities came together to form a union. -- that

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is not. What you are seeing is different stages of development

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across Africa but the direction is clear. The direction is towards

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greater integration. We have Togo and Cote d'Ivoire with much larger

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economies. Togo needs to integrate. Many African leaders are thinking

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along these lines. I have to ask you about the leadership of the

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World Bank. There was a great hope in Africa that the Nigerian Finance

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Minister Ngozi would get the job. She wanted the job but she did not

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get the job and now she says she is bitter because it was not a fair

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fight. Do you believe that was a symbolic moment when the West

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showed it still does not get it when it comes to the changing and -

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- economies in Africa? I do not think she is better. She put up a

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good five. She was angry. She may have been angry -- fight.

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Ibrahim, the leading philanthropist, says if the West thinks it can

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lecture us about transparency and accountability and then handle the

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leadership of the World Bank like this, it has another thing coming.

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I think the West needs to change. What she has done is cut across

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that. I think that is what our bank has also tried to do. I think

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others will come a long and probably do better. Final question.

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You are quitting your post. Why are you doing that when we just spent

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the whole conversation talking about the rise of Africa? It seems

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like you are getting out as the plane is taking off. We have a

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mandatory retirement age of 60. I want to spend more time with my

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family. I think my wife and my kids deserve to see more of me than they

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have done in the past. Will you still the building business in

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Africa? Certainly. That is by passion. The Africa of the future

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