Tony
Elumelu, the Chairman of Heirs Holdings; a pan-African investment firm
focused on investing in key sectors, including financial services, real
estate and resources, as well as health care and infrastructure, has
again reiterated the need to deepen the capital markets in Africa.
The
immediate past chief executive of United Bank for Africa, who spoke at
the Commonwealth Economic Partnership Forum organised by the
Commonwealth Business Council in London, said incentivising the
increasingly regional African growth companies, as well as subsidiaries
of multinationals to become listed on African stock exchanges is crucial
to deepening the African capital markets, increasing liquidity and
ensuring wealth creation.
He was however quick to point out that the markets in spite of the global challenges have been supportive of local institutions, enabling them to continue to raise finance for their businesses, even when international markets remain effectively closed. Citing UBA as an example during the panel discussion on “Accessing Commonwealth Financial Markets”, he said the Bank has through the market raised funds including equity and debt, to finance its Africa expansion agenda. “UBA recently, raised N20 billion through a 7-year tenured bond from the capital market. The corporate bond issue was over-subscribed by local investors”.
He was however quick to point out that the markets in spite of the global challenges have been supportive of local institutions, enabling them to continue to raise finance for their businesses, even when international markets remain effectively closed. Citing UBA as an example during the panel discussion on “Accessing Commonwealth Financial Markets”, he said the Bank has through the market raised funds including equity and debt, to finance its Africa expansion agenda. “UBA recently, raised N20 billion through a 7-year tenured bond from the capital market. The corporate bond issue was over-subscribed by local investors”.
Responding
to a question on how SMEs can access funds from the capital market, Mr.
Elumelu urged SME operators across Africa to focus on capacity building
and ensuring their businesses are institutionalised, implementing well
defined strategies and operating structures as a first step, before
approaching the capital market for finance. Domestic and international
institutions were targeting the SME sector, and for the right business,
capital was clearly available. Capital markets should not be seen as the
first port of call for these entities, but only after the SMEs were
well established and looking to expand operations and grow market
share.
The
Commonwealth Economic Partnerships Forum brought together over 250
business and government leaders from 30 Commonwealth countries. Hosted
by the Commonwealth Business Council in collaboration with the City of
London Corporation, the Forum was addressed by the Right Hon Kamla
Persad-Bissessar, Prime Minister of the Republic of Trinidad and Tobago
and Commonwealth Chairperson in Office, His Excellency Mr Shaukat Aziz,
former Prime Minister of Pakistan, Ministers from the United Kingdom,
Barbados, Kenya, Trinidad, and over 50 business leaders and
international experts.
The
Forum provided a good opportunity to reassess the trade and investment
linkages amongst the Commonwealth countries and reinvigorate the role
the private sector can play in creating economic growth for the benefit
of all Commonwealth countries. Participants noted that there is a new
sense of dynamism emerging from the Commonwealth relationships with the
possibility of economic partnerships based on the ‘Commonwealth factor’,
drawing on English as a common language, similar governmental and legal
frameworks as well as business systems.
Prime
Minister Persad-Bissessar said, “The Commonwealth market potential of 2
billion people is an attractive proposition for trade and investment,
also as a gateway to other lucrative markets.” The Forum welcomed the
new British Government’s emphasis on leveraging the Commonwealth and
linkages with emerging markets. Given the role of new global structures,
particularly the G20, participants urged the Commonwealth countries in
the G20 to advocate priority issues for the broader Commonwealth
membership.
The Forum agreed that the future role of the Commonwealth should emphasize trade and investment for economic growth, building on partnerships between governments and the private sector. There is now over $4 trillion worth of trade carried out by Commonwealth countries, with the potential to grow significantly. By 2020, the Commonwealth will have a market with over 1 billion middle class consumers and 40% of the global workforce. From advanced manufacturing to pioneering developments in the energy, engineering, ICT, education, scientific research and agriculture sectors – there are Commonwealth companies leading the way. The Forum highlighted opportunities and partnerships in different regions of the Commonwealth, including Africa, the Americas , and Asia
The Forum agreed that the future role of the Commonwealth should emphasize trade and investment for economic growth, building on partnerships between governments and the private sector. There is now over $4 trillion worth of trade carried out by Commonwealth countries, with the potential to grow significantly. By 2020, the Commonwealth will have a market with over 1 billion middle class consumers and 40% of the global workforce. From advanced manufacturing to pioneering developments in the energy, engineering, ICT, education, scientific research and agriculture sectors – there are Commonwealth companies leading the way. The Forum highlighted opportunities and partnerships in different regions of the Commonwealth, including Africa, the Americas , and Asia
Four
key areas were identified for action. Firstly, the Forum called for
sharing of experience between Commonwealth stock exchanges to strengthen
good practices for capital market development. Secondly it emphasised
that greater focus should be given to expanding intra-Commonwealth
trade, particularly intra- regional trade and thirdly called for the
harnessing of entrepreneurship and new business models for broad-based
growth. The Forum fourthly called for greater partnership between
institutions on research and sharing of results stating that skills
development should be developed further through private-public
collaboration and private sector delivery of training programme.
