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SOUTHERN AFRICA ROUND TABLE MEETING ON MAKING FINANCE WORK FOR AFRICA STRUCTURED FINANCE: OPPORTUNITIES AND INNOVATION

WORLD BANK DFID SIDA USAID BANK OF ZAMBIA. SOUTHERN AFRICA ROUND TABLE MEETING ON MAKING FINANCE WORK FOR AFRICA STRUCTURED FINANCE: OPPORTUNITIES AND INNOVATIONS INTRODUCTORY REMARKS BY: SIYANGA MALUMO FIELDSTONE AFRICA (PTY) LTD JOHANNESBURG

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SOUTHERN AFRICA ROUND TABLE MEETING ON MAKING FINANCE WORK FOR AFRICA STRUCTURED FINANCE: OPPORTUNITIES AND INNOVATION

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  1. WORLD BANK DFID SIDA USAID BANK OF ZAMBIA SOUTHERN AFRICA ROUND TABLE MEETING ON MAKING FINANCE WORK FOR AFRICA STRUCTURED FINANCE: OPPORTUNITIES AND INNOVATIONS INTRODUCTORY REMARKS BY: SIYANGA MALUMO FIELDSTONE AFRICA (PTY) LTD JOHANNESBURG LIVINGSTONE, ZAMBIA 7TH MAY 2007

  2. AFRICA TODAY Old JSE Johannesburg Poverty in Africa Zimbabwean Woman Market Scene Road in Nigeria

  3. AFRICA TODAY Rwandese Refugees Upmarket Apartments Subsistence Farming Learning Under a Tree Prosperous Farmer

  4. AFRICA TODAY • Geography • 30 million Sq. km • 53 Countries, including the Islands • Demographics (2002) • 800 Million People • The Economy (2002) • Gross Domestic Product: US$ 560 Billion • Average Per Capita Income: US$ 720 • Total Debt: US$ 300 Billion

  5. CONSTRAINTS TO AFRICAN DEVELOPMENT • Low Incomes, Low Savings, Low Capital Formation • Low Levels of Investment • Underdeveloped Formal Economy • Underdeveloped Middle Class (Key to Accelerated Development) • High Cost of Funds • Irresponsible Management of Public Funds • High Risk Perception • Shallow and Narrow Financial Markets • Lack of Individual Ambition & Individual Initiative (Looking to Government for Everything)

  6. CONSTRAINTS TO AFRICAN DEVELOPMENT • Culture of Financial Irresponsibility (Borrowing with No Intention to Repay) • Culture of Extravagance and Conspicuous Consumption (A Mercedes is Preferred to Investment) • Lack of Political Stability • Policy Fluidity • Unreliable Legal Systems • Bountiful Nature (Good Climate, Benevolent Forests & Rivers) • Perpetual Despair (Leaving it all to God) • Proclivity for Reliance on “Khaki Envelopes” (Chai, Dash, Baksheesh, Cold Drink) • Too Many Talking Shops

  7. Pan African Approach to Development (Make NEPAD Work!) • Develop Effective Financial Intermediation (Banks to Reduce “Locking” Funds in T-Bills at Expense of Lending) • Promote Coordinated Approach in the Financial Sector (Banks, Insurance, Pension Funds, Mortgage Institutions to Synchronise) • Accelerate Africanisation of the Financial Sector (to Facilitate Better Appreciation & Management of African Risk) • Promote Creation of Continent-Wide Investment & Credit Guarantee Institutions (to Complement Afrexim Bank, to Promote Project Funding & Investments) • Increase Intervention of Bilateral & Multilateral Development Finance Institutions in Funding Private Sector in Africa REMEDIES

  8. ADVANTAGES OF STRUCTURED FINANCE • Creative Management of Financial Risk • Innovative Technique (That Makes the “Impossible Possible”) • Facilitates Transactions (Especially Project Finance and M & A) • Facilitates Economic Development • Facilitates Indigenous Empowerment • Creates Wealth

  9. THE END

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