Dialectic Africa Analyst

Dear Africa Interested Individuals:                                                           I am going to give a rundown of some of my major policy opinions with insights on certain matters and decisions taken by policy makers thus far.  All these insights are contained in one or more of my 64 articles (and counting) on this blog. 1. I said that Nigeria should do crude oil swaps (total overhaul of the existing system) in exchange for imported petroleum products.  This will save foreign exchange that is dwindling in supply given the steep drop in crude oil prices over the past twelve months.  Nigeria is aggressively working on this as we speak.  The Nigerian oil company also wants to be the major importer of gasoline into the country to reduce subsidy fraud by diverse downstream oil marketers.  Foreign reserves have been on a consistent increase over the past three month and counting as leakages are being plugged.    2.  I said that the fuel subsidy should not be removed n

Dear Africa Interested Individuals:                                                            Stanbic IBTC about four months ago made known its intention to raise fresh equity in the amount of $102m (N20.4B) from its existing shareholders (the way Nigerian banks blaze through capital should be a case study for Harvard & Darden Business Schools - the two largest producers of business school case studies worldwide) at a price of N25.50 per share later in 2015.  About two months after expressing its intention, Stanbic IBTC releases its H1 2015 earnings and tells the world its profit attributable to shareholders has declined 46% year-on-year for the first six months of 2015 after rising by 57% from FY 2013 - 2014. The result was released (in record time) within the first week after the end of the reporting period on June 30th, 2015.  What does a bank that wants its shareholders to grant it fresh equity in the amount of $102m do?  It gives out $45m (N0.90 per share) in the for

Dear Africa Interested Individuals:                                                         This is based on the performance of the nineteen (19) banks reviewed as at June 30th, 2015.  Standard Bank and ETI were excluded due to a particular line item not being disclosed.  Half-year basic earnings per share was annualized for all banks.  Prices used were today.  Figures used were as published by the bank whether audited or unaudited.  All banks have a December fiscal year-end.  This value-discovery approach is self-created .  I will give you a straight ranking and then provide my best picks in each country.     Best Value 1. Ghana Commercial Bank 2. CAL Bank Ghana 3. Credit Agricole Egypt 4.  Ecobank Ghana 5. Access Bank Nigeria 6. UBA Nigeria 7. GT Bank Nigeria 8. Barclays Kenya 9. Zenith Bank Nigeria 10. First Bank Nigeria 11. KCB Group Kenya 12. CBZ Holdings Zimbabwe 13.   Equity Group Kenya 14. SCB Ghana 15. Comm.

Dear Africa Interested Individuals:                                                          A country is not a person; a country is made up of people.  A country gets its identity from its people.  While people are referred to as human capital by companies, I consider people as human identity by countries.  So, how are multinational companies rating Nigerian and Ghanaian C-level executives presently?  Recent developments are ominous for Nigerian executives and those in the pipeline and blossoming for Ghanaians executives and bodes well for those in the pipeline. Diageo appointed its first Nigerian CEO for Guinness Nigeria in 2012 (appointment took effect July 1st, 2012) since the appointment of Ralph Alabi in 1991.  He was prior to that the CEO of East African Breweries Kenya and before that Guinness Ghana.  He was removed from the position of CEO of Guinness Nigeria in October 2014 after a brief tenure that was deemed unsatisfactory.  His current professional whereabout is

Dear Africa Interested Individuals:                                                         The clamor continues for commodities export dependent (especially oil) economies to further devalue their currencies.  I keep asking myself "when is enough finally enough?"  The clamor is largely driven by global economists across the spectrum loyal to economic theory and the countries they are domiciled in, portfolio managers and large commercial banks in the countries of focus with net positive (more dollar inflows expected than dollar outflows) dollar exposures.   What does devaluation do to the people in the countries that have devalued their currencies multiple times (or one devaluation of 20% or more) over a short period? 1. Inflation rises quickly and is driven by those directly and indirectly impacted which is everybody .   2. Chances are high that the Central Bank (Fed in the USA) will have to raise interest rates to stem inflationary pressures in the economy. T

Dear Africa Interested Individuals:                                                        United Bank for Africa (UBA) has released its half-year audited result for 2015.  Beyond the progressive numbers, the bank knows where its problems are and is tackling them and making progress as the numbers can confirm.  This bodes well for the future when fresh challenges arise.  Let us start with where the bank had success. Net income rose by 40% and gross earnings rose by 21% .  More earnings trickled down to the bottom-line and boosted net income growth relative to gross earnings. PBT margin was 23.4% . Management has been focused on consolidation (not expansion) for about three years now and this is paying off and still has more room to further impress going forward.  Fixed assets declined by 0.3% over the first six months of 2015.  23% of group net income came from Africa subsidiaries excluding Nigeria.  This has perennially been the bane of UBA from a group perspective; the bank w

Dear Africa Interested Individuals:                                                         In the past two years, some banks across Africa have undergone restructuring and adopted a holding company structure with the approval of their shareholders.  This new structure is supposed to be an asset to these banks and allow them to continue their strategy of being diversified business groups across the African banking space while dominating other banks that are not holding companies and have to stick to core banking and closely related activities.   How are these holding companies faring across the continent and in comparison to banks without the holding company structure?  Is being diversified dazzling the income statement or damaging it?  Let us find out. SBM Holdings Mauritius (Adopted holding company model less than a year ago) SBM Holdings (SBMH) PBT margin for H1 2015 is 20.9% .   Net income declined 55% year-on-year to MUR 607m, largely due to an unforeseen impairmen