Africa-Press – Mauritius. The Chief Executive Officer of AfrAsia Bank explains that Mauritius is the base of operations of his bank, « being a bridge for trade and investments between Asia, India and Africa ».
? How is AfrAsia Bank performing? Brilliantly.
We have just successfully raised our Tier 1 capital by Rs 476m, bringing total regulatory capital to nearly Rs 2 billion to support our regional growth, including a stake in Kingdom Financial Holdings Limited, Zimbabwe.
We remain focused in our activities in Mauritius and the region. Nearly half of our activities are in the region and this is expected to grow as more and more companies are using Mauritius as their financial centre of choice.
We also bank nearly 70% of the top 100 companies in Mauritius and with our joint venture with AXYS Capital Management, we are one of the leading private client banks.
AfrAsia has quickly become a formidable competitor here. ? What are your ambitions in the Mauritius banking sector? Mauritius is our base of operations, being a bridge for trade and investments between Asia, India and Africa for our regional corporate and private banking clients.
Our core niche business segment in Mauritius is performing well and we will keep investing and developing our capabilities in the market. ? You have been quoted by Bloomberg as one of the banks considering to buy HSBC (Mauritius) retail banking unit.
Can you tell us more about it? We would not comment on market speculations. ? Why have you chosen a development/growth strategy focused on Africa? For AfrAsia, the future remains linked to Africa and Mauritius.
Over the past decade, six of the world’s ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including Japan.
Even allowing for the knock-on effect of the northern hemisphere’s slowdown, the IMF expects Africa to grow by nearly 6% in 2012, about the same as Asia.
As the continent becomes gradually more prosperous, levels of private investment are set to increase significantly, especially since (according to World Bank figures) Africa currently offers ‘the highest returns on foreign direct investment of any region in the world’.
? How can you explain Africa’s growth? According the The Economist, around a quarter of Africa’s growth came from higher revenues from natural resources from 2000 to 2008.
Favourable demography is another cause. With fertility rates crashing in Asia and Latin America, half of the increase in population over the next 40 years will be in Africa.
? Are there any other reasons? The growth also has a lot to do with the manufacturing and service economies that African countries are beginning to develop.
China’s arrival has improved Africa’s infrastructure and boosted its manufacturing sector. Other non-Western countries, from Brazil and Turkey to Malaysia and India, are following its lead.
Africa could break into the global market for light manufacturing and services such as call centres. Africa’s enthusiasm for technology is also boosting growth. It has more than 600m mobile phone users—more than America or Europe.
In the best-case scenario, Africa could be part of a virtuous circle of investment, in which the increasing size of the markets and the growth in foreign direct investment (FDI) inflows boost credibility in Africa’s exchanges, making it easier to raise capital and encouraging more Africans to invest in them.
? You’ve just acquired a stake in a financial group in Zimbabwe. Why invest in this country?
Zimbabwe, arguably one of the most controversial African nations over the last decade, is beginning to show signs of economic reform with the recent dollarization of the economy as well as the adoption of stringent banking regulations in the form of Basel II.
The Zimbabwean economy has been stable since the formation of the unity government in 2009. This has resulted in increased FDI and robust economic growth with GDP increasing by 7.5% and 8.1% in 2009 and 2010, respectively.
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