Loita Hosts Panel at African Development Bank Annual Meetings

The Loita Group of companies hosted a highly successful breakfast panel addressing the convergence of financial services and information technology at the annual meetings of the African Development Bank held in Valencia.

Entitled "Building Bridges: The Critical Role of Information Technology in Developing African Financial Services," the panel assembled top representatives of banks, stock exchanges, technology companies and investment funds to discuss current trends and future projections for synergies in the two industries in Africa. Approximately 120 people attended the breakfast panel.

Some of the issues, observations and suggestions raised during the course of the panel were as follows:

Cost-sharing was determined to be absolutely necessary to enable African institutions to leapfrog ahead of middle-income countries in technological advancement in the financial arena, a point advanced by Mr. Alf Karrim (Managing Director of Orbicom). He noted that to take advantage of the best in satellite technology, several financial institutions often share the capital investment burden to bring more reliable services to their customers.

The issue of the just balance between high technology and reaching the greatest number of Africans was raised by Mrs. Akapelwa-Ehueni (Division Manager, Information Technology at the African Development Bank). She noted that while the African Development Bank had installed satellite technology to communicate with its member countries, it wished to focus investment on reaching average Africans with on-line banking. It was noted that some banks, were bridging the gap with cyber-cafés and free internet access. Internet access must become a top priority.

Investors will seek larger-scale, multinational investments in technology, said Mr. Papa Madiau Ndiaye (Director of the AIG African Infrastructure Fund). He observed that the number of IT companies of substantial scale to absorb a foreign private equity fund investment (and thus attract its consideration) are few. His fund and others are more interested in the infrastructural side of IT than "window" services such as, for example, web-hosting companies. Consolidation and partnership across borders are thus critical benchmarks for foreign investors. He also noted, importantly, that the understanding and involvement of top management is non-negotiable in any investment target.

Technology is absolutely indispensable if African capital markets are to develop, agreed Dr. Mrs. Okereke Oniyuke (Chairperson of the Nigerian Stock Exchange), but funding is a common problem for stock exchanges. She suggested as a remedy that the Nigerian Stock Exchange (NSE) may list itself on the NSE or on another major exchange such as the LSE. Furthermore, while the NSE had invested heavily in a fully automated trading system and central depository, banks (including the central bank) still lagged in their clearing times, and thus the exchange is critically dependent on the upgrading of the whole financial system. She agreed that partnership is necessary, as the NSE will do via VSAT with the BVRM in Côte d'Ivoire.

Human capital will be a major determinant of Africa's long-term growth in this area, Mr. Barry Ryan (Managing Director of Fintech International) pointed out. He noted that a phenomenon has already begun wherein Africa is a net exporter of its highly-skilled people in the IT sector, whereas human resource strategies must seek to retain them to offer services from Africa.

Africa appropriateness must be given due consideration, suggested Mr. Lepain (of the Oracle Corporation). While he doubted competitive e-banking may be a long way off, he reasoned that the time had come for African commodity trading on an e-commerce platform.