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President Obama's plane. Six of the world's 10 fastest | :00:13. | :00:17. | |
growing economies are in sub- Saharan Africa. The World Bank | :00:17. | :00:22. | |
predicts a decade of African growth which Europe can only dream about. | :00:22. | :00:27. | |
But how realistic is the excitable talk of economic transformation in | :00:27. | :00:34. | |
the world's poorest continent? My Guest is Arnold Ekpe, CEO at | :00:34. | :00:40. | |
Ecobank, which boasts 8 million customers across 32 African nations. | :00:40. | :00:48. | |
Economic opportunity beckons. A African's ready to seize it? -- are | :00:48. | :00:58. | |
:00:58. | :01:16. | ||
A Arnold Ekpe, welcome to HARDtalk. You have lived a life devoted to | :01:16. | :01:20. | |
business and finance in Africa. Does this feel like a turning point | :01:20. | :01:29. | |
to you? I think so. I think what we're seeing in Africa has been | :01:29. | :01:36. | |
evidence of sustainable growth. It will be a better time for abaca. | :01:36. | :01:41. | |
People have said that before at the last 20 or 30 years. Applicants | :01:41. | :01:45. | |
have expressed great confidence that a corner has been toned and | :01:45. | :01:52. | |
the Continent is on a new park. They have been wrong. I think there | :01:52. | :01:58. | |
have been certain changes that we have to take of -- account of. For | :01:58. | :02:04. | |
the first time, the GDP in Africa is growing. Global economics have | :02:04. | :02:09. | |
changed. Africa is now benefiting from better terms of trade, much | :02:09. | :02:19. | |
:02:19. | :02:23. | ||
more need for African commodities, and major changes. Democracy has | :02:23. | :02:28. | |
taken root in Africa, the middle classes rising. The signs are | :02:28. | :02:33. | |
positive. The biggest in the long run are amazing. The prediction is | :02:33. | :02:40. | |
that there will be almost 1 billion middle class applicants by 2060. | :02:40. | :02:44. | |
But in the more immediate short- term, African economies are still | :02:44. | :02:50. | |
heavily reliant on exports to Europe, Asia, to none African | :02:50. | :02:58. | |
economies. It seems that in a moment of great economic stability, | :02:58. | :03:03. | |
Africa remains vulnerable. That is correct. Africa is potentially bomb | :03:03. | :03:10. | |
rubble. We have seen the ability of the African governments and to | :03:10. | :03:13. | |
decision-makers to manage economy is much better than they did in the | :03:13. | :03:19. | |
past. I think the impact of any slowdown in global economy -- The | :03:19. | :03:26. | |
Club economy will be less in terms of the overall impact. The Nigerian | :03:26. | :03:31. | |
Central Bank governor warned not long ago that serious spillover at | :03:31. | :03:40. | |
risk from the eurozone crisis -- he warned of this risk. Do you see | :03:40. | :03:50. | |
:03:50. | :03:50. | ||
this risk? I think there is some risk. If European banks decide to | :03:50. | :03:53. | |
reduce credit for international trade, that is bound to affect | :03:53. | :03:58. | |
every Cup. If China and Europe slowed down, the demand for African | :03:58. | :04:02. | |
commodities will come down. I want to talk about your bank, your | :04:03. | :04:08. | |
strategy and your vision for the future. It seems to me that what | :04:08. | :04:12. | |
underpins your business life is something that goes beyond | :04:12. | :04:17. | |
economics and is almost emotional. I have read things that you have | :04:17. | :04:27. | |
said in the past. For Ekka Bank -- Ecobank, have said at the pay is | :04:27. | :04:32. | |
your strategy. You see opportunity. You believe the NAB Cup. That does | :04:32. | :04:39. | |
not sound economic so much as emotional. That is not exactly true. | :04:39. | :04:47. | |
We're being very pragmatic. Bankers and businessmen. We present | :04:47. | :04:50. | |
shareholders with a good return. But I think Ecobank is a good | :04:50. | :04:56. | |
example. We have tried to Kobe and banking and see what is positive | :04:56. | :05:03. | |
and at the Kop. We took a view that the wars and under development | :05:03. | :05:11. | |
would not continue forever. Advocate -- Africa would emerge. | :05:11. | :05:15. | |
Most people who work for Ecobank will tell you that it is not just a | :05:15. | :05:22. | |
band. It is a movement for change. You have used the word at the | :05:22. | :05:26. | |
Palace of it is a sort of monolithic Continent. One of the | :05:26. | :05:30. | |
things we have seen recently is that as some parts of the African | :05:30. | :05:38. | |
continent have begun to thrive, we have seen a greater fragmentation | :05:38. | :05:48. | |
of the Continent. Other countries like Mali or Chad or Guinea-Bissau | :05:48. | :05:53. | |
uttering horribly badly. There are bound to be blips along the way of | :05:53. | :06:01. | |
development. Africa is the Continent of 55 countries. -- a | :06:01. | :06:05. | |
Continent. They will all grow at different rates. But overall Africa | :06:05. | :06:10. | |
is growing. The future of app allies in further integration | :06:10. | :06:15. | |
rather than fragmentation. I am wondering whether there are many | :06:15. | :06:20. | |
business leaders and political leaders in Africa today who think | :06:20. | :06:26. | |
about the interests of the Continent as a whole be on to their | :06:26. | :06:30. | |
own national short-term parochial interests? I think there are very | :06:30. | :06:37. | |
many. I have been doing banking in Africa for 32 years. What is not | :06:37. | :06:42. | |
often realised is how much Africans are investing in Africa. The PIC of | :06:42. | :06:51. | |
South Africa is investing 7 billion. It is the Public Investment | :06:51. | :06:58. | |
Corporation. A Nigerian businessman is looking to invest 3 billion. | :06:58. | :07:04. | |
cement King, one of the richest man on the continent? He is investing 3 | :07:04. | :07:13. | |
billion in Africa. There is a bully for NAB Cup. You proudly announce | :07:13. | :07:20. | |
that you employ more Africans than any other bank on the continent | :07:20. | :07:27. | |
across 32 nations, but some of the activities and operation to have a | :07:27. | :07:36. | |
run in countries where it seems the opportunities for you to make money | :07:36. | :07:40. | |
amid political uncertainty must be minimal. That has been built into | :07:40. | :07:44. | |
our business model. We accept that there might be occasional problems | :07:44. | :07:51. | |
in some countries. It is more than that. Surely you wake up as CEO, | :07:51. | :07:54. | |
switch on the radio and wonder whether the assets you have been a | :07:54. | :07:59. | |
country like Mali are still in existence? As we speak, we have put | :07:59. | :08:09. | |
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into practice in Mali. -- 42 branches. Is this a viable model? | :08:12. | :08:15. | |
think in the long-term it is. Condition -- companies like | :08:15. | :08:25. | |
Guinness, Nestle, Unilever, they have never left Africa. Mabey ask | :08:25. | :08:32. | |
you how banks work in Africa? Across many countries in Africa, it | :08:32. | :08:38. | |
will be different than people might be used to. How would you reach out | :08:38. | :08:44. | |
to the hundreds of millions of Africans who will not necessarily | :08:44. | :08:50. | |
see a bricks-and-mortar bank in that town? One aspect of banking in | :08:51. | :08:55. | |
which Africa is a leader his mobile banking. There are more applicants | :08:55. | :09:00. | |
using mobile banking platforms for payments than in any other part of | :09:00. | :09:05. | |
the world. We have seen in nations like Kenya an extraordinary number | :09:05. | :09:10. | |
of people doing their financial business by mobile telephone. How | :09:10. | :09:19. | |
far can that go? My belief is that it can go very far. Kenya has up to | :09:19. | :09:28. | |
60%. It is used for basic banking. I think that is really the bulk of | :09:28. | :09:36. | |
banking for most people and Africa. Banking penetration in Africa will | :09:37. | :09:43. | |
ride on top of mobile penetration. We can't get away from the trust | :09:43. | :09:49. | |
issue. In the west we have had a profound problem with trusting | :09:50. | :09:53. | |
banks that we have traditionally relied upon. Ken Africans trust | :09:53. | :10:03. | |
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African Bank's? I think they're doing so. And I think they should. | :10:04. | :10:14. | |
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Banking is a means for economic development. Banks are necessary. | :10:16. | :10:20. | |
But to make a decision about whether or not to trust a financial | :10:20. | :10:23. | |
institution, people need transparency and accountability. | :10:23. | :10:27. | |
They need to know how a bank is being run and whether a reasonable | :10:27. | :10:31. | |
risk is being taken. Whether the people running the banker a must. | :10:32. | :10:40. | |
Can they be confident of the Avoca? I think the regulators and | :10:40. | :10:47. | |
effort they have done a pretty good job. Let me bring a specific case | :10:47. | :10:54. | |
to you. Oceanic Bank. Four years ago, I sat in the office of one of | :10:54. | :10:59. | |
Nigeria's best known bankers. The CEO of oceanic band. She told me | :10:59. | :11:05. | |
she was running a dynamic new sort of bank. Cheers -- she used some of | :11:06. | :11:10. | |
the language used about her ambitions and hoped for Africa. Two | :11:10. | :11:16. | |
years later, she was in prison, convicted of fraud and charged with | :11:16. | :11:21. | |
$1 billion worth of ASIC fraud. You have taken over that Bank, how can | :11:21. | :11:25. | |
we be sure that some of the practices she was responsible for | :11:25. | :11:31. | |
had not continued? I think the Central Bank of Nigeria had two | :11:31. | :11:38. | |
years to clean out the bend. Ecobank has a reputation across the | :11:38. | :11:42. | |
two countries that it operates within full compliance of rules and | :11:42. | :11:47. | |
regulations. But those rules and regulations failed to stop Oceanic | :11:47. | :11:51. | |
Bank from open of many people in the past. Have they really been | :11:51. | :11:55. | |
strengthened so much that it can never happen again? I don't think | :11:55. | :12:04. | |
happen again. But in Africa, regulators have become more | :12:04. | :12:12. | |
stringent to the sort of abuses just about banks. You are in a | :12:12. | :12:21. | |
part of an part of an system. The economic Intelligence Unit did a | :12:21. | :12:27. | |
very interesting survey of business perceptions in Africa. More than | :12:27. | :12:35. | |
concern as corruption. The next biggest concern was barely out of | :12:35. | :12:41. | |
governance and regulatory authority. -- failure of governments. These | :12:41. | :12:44. | |
are profound problems you presumably have to deal with every | :12:44. | :12:50. | |
day. Corruption is a matter of choice. We have taken the view that | :12:50. | :12:56. | |
we would rather not go that part and run a b and run a bm. We | :12:56. | :13:03. | |
band band that has integrity and which | :13:03. | :13:10. | |
operates within the rules of the country. That is what we have done | :13:10. | :13:15. | |
for the last 24 years. Your answer suggests that some of your | :13:15. | :13:21. | |
competitors may take a different view. A view of cutting corners? | :13:21. | :13:27. | |
can't speak, competitors. You must consider what the model will work. | :13:27. | :13:34. | |
Before Ecobank, he worked for Citibank. I believe they had major | :13:34. | :13:39. | |
operations in Latin America. It was almost a running joke in Citibank | :13:39. | :13:42. | |
that you could either be a morally good band or you could be a | :13:42. | :13:47. | |
successful band but not both. Is that the choice you have to make in | :13:47. | :13:52. | |
Africa? We have chosen to be a good band. I think in the long run -- | :13:52. | :13:58. | |
the long run, could banks become successful. You think you can | :13:58. | :14:02. | |
change the paradigm? I think if circumstances change, the paradigm | :14:02. | :14:10. | |
something something many people want to know | :14:10. | :14:16. | |
about. Are you confident that Ecobank and other African home- | :14:16. | :14:24. | |
grown banks can co-exist with and thrive in an environment where | :14:24. | :14:34. | |
:14:34. | :14:34. | ||
outsiders increasingly want to get I am convinced that is the case. | :14:34. | :14:39. | |
The largest banks in the UK are British. The largest banks in China | :14:39. | :14:46. | |
are genies. I think the largest banks in Africa will be African. | :14:46. | :14:53. | |
But they are not right now. They are on the way. Your profits are | :14:53. | :14:57. | |
dwarfed by a Standard Chartered and JP Morgan. African banks are not | :14:57. | :15:05. | |
tossing the growth. -- charting. are seeing African banks filling | :15:05. | :15:08. | |
that space that has been left by the victories of international | :15:08. | :15:15. | |
banks. Maybe that was the story of last decade but the story of this | :15:15. | :15:22. | |
decade is different. JP Morgan are pouring investment into Africa. | :15:22. | :15:26. | |
Standard Chartered are very proud of their expansion plan in Africa. | :15:26. | :15:32. | |
This is a reality you have to face. I have been in this business for 22 | :15:32. | :15:39. | |
years. We have had this story before. Africa it is a strategy. We | :15:39. | :15:47. | |
own one of the largest banks in Liberia. We will see. It is not | :15:47. | :15:55. | |
just about Western banks. Perhaps more importantly is the question of | :15:55. | :15:59. | |
China. It is pouring money into African economies. You cannot | :15:59. | :16:09. | |
compete with them. But we can do business with them. It is a small | :16:09. | :16:14. | |
operation. You have won a small office in Ghana. To take the | :16:14. | :16:20. | |
example of Ghana, I believe the Chinese have offered various loan | :16:20. | :16:24. | |
facilities to the Ghanaian government, worth more than a $10 | :16:24. | :16:28. | |
billion. A lot of the loan money that is going over to Ghanaian | :16:29. | :16:36. | |
Enterprises coming -- enterprise is coming from China. I do not think | :16:36. | :16:45. | |
that is a problem. We begin to play a role where we support government | :16:45. | :16:51. | |
efforts. For example we have been financing crude oil exports from | :16:51. | :16:55. | |
Nigeria to Ghana. Many foreign banks do not want to take the risk | :16:55. | :16:59. | |
but we took the risk because we have operations in both countries. | :16:59. | :17:03. | |
When you look good the new Chinese way of doing business in Africa and | :17:03. | :17:11. | |
you know it is a no questions asked deal where China gets what it wants | :17:11. | :17:16. | |
with commodities and in return it sells man defected goods to Africa, | :17:17. | :17:24. | |
offering loan facilities and capital to Africans. Is it the sort | :17:24. | :17:28. | |
of deal that you think is in the best interest of Africa's in the | :17:28. | :17:34. | |
long run? China brings a different flavour to investing in Africa. It | :17:34. | :17:40. | |
does not mean it is worse or better, it is different. Africa needs as | :17:40. | :17:47. | |
much support and capital to develop its infrastructure, to develop its | :17:47. | :17:53. | |
cities, to build power plants. That can come from the West or China. We | :17:53. | :17:58. | |
have to decide in Africa the terms under which we accept the help. | :17:58. | :18:04. | |
That is what most people are trying to come to terms with. It is a | :18:04. | :18:09. | |
different approach to the West. It is not necessarily better or worse. | :18:09. | :18:12. | |
Do you think African leaders are getting it right in terms of the | :18:12. | :18:16. | |
deals they are striking? I am thinking of Angola where billions | :18:16. | :18:21. | |
of dollars has been put in by the Chinese government. We know, for | :18:21. | :18:27. | |
example, from NGO campaigners like Rafael Marques, a well-known | :18:27. | :18:32. | |
Angolan activist, some of the highways built by the Chinese and | :18:32. | :18:36. | |
the hospitals they have constructed, some of the housing they have put | :18:36. | :18:40. | |
up, is of poor quality. Some is falling down only years after it | :18:40. | :18:45. | |
has been built. That is not good for for Picken it is not just the | :18:45. | :18:55. | |
:18:55. | :18:55. | ||
Chinese that can build housing that falls down -- not good for Africa. | :18:55. | :18:59. | |
In many markets we have seen if they have brought positive things. | :18:59. | :19:04. | |
New stadiums, schools. They have done many positive things. It is | :19:04. | :19:14. | |
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easy to pick on one or two negative things. You have talked about York | :19:16. | :19:20. | |
rove across Africa and we have talked about specific economy is | :19:20. | :19:28. | |
but there seems to be a specific point to be made -- York -- your | :19:28. | :19:38. | |
growth. Alongside the growth we have the growing gap between the | :19:38. | :19:42. | |
poor and the rich. Inequality is growing as the size of the economy | :19:42. | :19:51. | |
is growing. A business leader -- as a business leader in Africa what do | :19:51. | :19:57. | |
you intend to do about it? Provide opportunities to alleviate their | :19:57. | :20:03. | |
situation. We are also running microfinance bangs in advocates to | :20:03. | :20:10. | |
focus on wealth-creation rather than poverty -- banks. So we are | :20:10. | :20:15. | |
doing our little bit to support the development of Africa and reduce | :20:15. | :20:21. | |
the gap between the rich and poor. This goes back to the beginning and | :20:21. | :20:30. | |
me talking about this sense of African-ness, do you believe for | :20:30. | :20:34. | |
the transformation to continue in Africa there has to be a more | :20:34. | :20:39. | |
common purpose amongst African businesses and political leaders? | :20:39. | :20:45. | |
So there must be more integration of the African economy? I think | :20:45. | :20:49. | |
that is the case and that is beginning to happen. In the past | :20:49. | :20:53. | |
the focus has been on fixing political issues, the Waughs and | :20:53. | :20:58. | |
lack of democracy. As that is going away we are seeing a greater focus. | :20:58. | :21:02. | |
I am spending a bottle time with decision-makers and we are trying | :21:02. | :21:07. | |
to look at improving the economic well-being of countries. That is a | :21:07. | :21:12. | |
good thing. Some of the African visionaries of the past talks about | :21:12. | :21:17. | |
currency union and even a United States of Africa with a political | :21:17. | :21:22. | |
union. If we are realistic we have seen some form of currency union in | :21:22. | :21:27. | |
western Africa but beyond that it has never happened. In terms of | :21:27. | :21:31. | |
freedom of movement, free Labour movement, border controls, all | :21:31. | :21:37. | |
sorts of other things, Africa, far from co-ordinating and into racing, | :21:37. | :21:45. | |
seems as fragmented as ever? -- integrating. That is ours entirely | :21:45. | :21:51. | |
true. Five African communities came together to form a union. -- that | :21:51. | :21:56. | |
is not. What you are seeing is different stages of development | :21:56. | :22:01. | |
across Africa but the direction is clear. The direction is towards | :22:01. | :22:11. | |
:22:11. | :22:13. | ||
greater integration. We have Togo and Cote d'Ivoire with much larger | :22:13. | :22:21. | |
economies. Togo needs to integrate. Many African leaders are thinking | :22:21. | :22:24. | |
along these lines. I have to ask you about the leadership of the | :22:24. | :22:31. | |
World Bank. There was a great hope in Africa that the Nigerian Finance | :22:31. | :22:34. | |
Minister Ngozi would get the job. She wanted the job but she did not | :22:34. | :22:39. | |
get the job and now she says she is bitter because it was not a fair | :22:39. | :22:43. | |
fight. Do you believe that was a symbolic moment when the West | :22:43. | :22:51. | |
showed it still does not get it when it comes to the changing and - | :22:51. | :22:55. | |
- economies in Africa? I do not think she is better. She put up a | :22:55. | :23:03. | |
good five. She was angry. She may have been angry -- fight. | :23:04. | :23:08. | |
Ibrahim, the leading philanthropist, says if the West thinks it can | :23:08. | :23:14. | |
lecture us about transparency and accountability and then handle the | :23:14. | :23:18. | |
leadership of the World Bank like this, it has another thing coming. | :23:18. | :23:23. | |
I think the West needs to change. What she has done is cut across | :23:23. | :23:33. | |
:23:33. | :23:34. | ||
that. I think that is what our bank has also tried to do. I think | :23:34. | :23:38. | |
others will come a long and probably do better. Final question. | :23:38. | :23:43. | |
You are quitting your post. Why are you doing that when we just spent | :23:43. | :23:47. | |
the whole conversation talking about the rise of Africa? It seems | :23:47. | :23:52. | |
like you are getting out as the plane is taking off. We have a | :23:52. | :23:56. | |
mandatory retirement age of 60. I want to spend more time with my | :23:56. | :24:03. | |
family. I think my wife and my kids deserve to see more of me than they | :24:03. | :24:06. | |
have done in the past. Will you still the building business in | :24:06. | :24:13. | |
Africa? Certainly. That is by passion. The Africa of the future | :24:14. | :24:18. |