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Financial Sector as a Backbone of Economic Growth: The Banking Sector

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Islamic Finance and Africa's Economic Resurgence

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Abstract

After spending decades at the periphery of the mainstream global financial system, Africa is now becoming one of the world’s fastest growing emerging markets and an increasingly popular investment destination. There are clear reasons for this reassessment, as illustrated in the previous chapter. African economies are expanding on the back of increasing commodity prices, trade, and foreign investment, while increasing consumer affluence is helping to drive the demand for goods and services.

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Notes

  1. 1.

    Noel Gordon & Others, At the Tipping Point: Financial Services in Africa comes of age How Financial Institutions can Capitalise on the Growth Opportunities in Africa, Accenture, 2011, www.mckinsey.com, p. 3.

  2. 2.

    World Bank, Finance for All? Policies and Pitfalls in Expanding Access, World Bank Policy Research Report. Washington World Bank, 2008, p. 2.

  3. 3.

    Mahmoud Mohieldin, Zamir Iqbal, Ahmed Rostom and Xiaochen Fu, The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries, p. 2.

  4. 4.

    Ibid, p. 6.

  5. 5.

    Patrick Imam and Kangni Kpodar, Islamic Banking: How Has it Diffused?, p. 3.

  6. 6.

    Mahmoud Mohieldin, Zamir Iqbal, Ahmed Rostom and Xiaochen Fu, The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries, p. 3.

  7. 7.

    Accenture, Africa The New Frontier for Growth, 2010, p. 8.

  8. 8.

    The Economist Intelligence Unit, Banking in Sub Saharah Africa to 2020 Promising Frontiers, p. 1.

  9. 9.

    William Wallis, Andrew England and Katrina Manson, “Africa: Ripe for Appraisal”, Financial Times May 18, 2011; Simon Freemantle, Africa Macro Insight, The Five Trends Powering Africa’s Enduring Allure, Trend 5 Africa Deepening Financial Sector, p. 5.

  10. 10.

    Paul Wallace, “What Kenya can teach the world about banking to the masses”, The Banker, February, 2012, p. 6.

  11. 11.

    Benno Ndulu, Tanzania’s mobile-fuelled banking revolution, The Banker October 2014, p. 197.

  12. 12.

    Ibid.

  13. 13.

    Noel Gordon & Others, At the Tipping Point: Financial Services in Africa comes of age How Financial Institutions can Capitalise on the Growth Opportunities in Africa, Accenture, 2011, p. 3.

  14. 14.

    Simon Freemantle, Africa Macro Insight, The Five Trends Powering Africa’s Enduring Allure, Trend 5 Africa Deepening Financial Sector, p. 1.

  15. 15.

    Hilary De Grandis and Gary Pinshaw, “Banking Building on Success”, in Africa’s Path to Growth Sector by Sector McKinnsey, June 2010, www.mckinseyquarterly.com, retrieved January 2011.

  16. 16.

    Franklin Allen & Others, “African Financial Systems: A Review” Review of Development Finance, vol. 1, Issue 2 April–June, pp. 79–113.

  17. 17.

    Gautam Bandyopadhyay, “Banking the Unbanked: Going Mobile in Africa”, Standard Chartered Asia, Africa and Middle East The Guide to Working Capital Management 2009/2010, pp. 59–67; Robert Ruthann, Africa’s Development Prospects Remain Intact, p. 5.

  18. 18.

    World Bank, Finance for All Policies and Pitfalls in Expanding Access, World Bank Policy Research Report. Washington World Bank, 2008, p. 28.

  19. 19.

    Andrianaivo and Charles Amo Yartey, Understanding the Growth of African Financial Markets, p. 5.

  20. 20.

    Ibid, pp. 6–7.

  21. 21.

    Gautam Bandyopadhyay, “Banking the Unbanked: Going Mobile in Africa”, Standard Chartered Asia, Africa and Middle East The Guide to Working Capital Management 2009/2010, pp. 59–67.

  22. 22.

    Erik Heinrich, “The Secret of Africa’s Banking Boom: Mobility”, Time Magazine, www.techland.time.com, August, 16, 2012, retrieved December 2012.

  23. 23.

    Chriatian Wessels and others, Inside Africa, Think: act study, p. 43.

  24. 24.

    Infosys Technologies Limited, “Banking the Unbanked: Going Mobile in Africa”, www.infosys.com, retrieved January 2013, p. 8.

  25. 25.

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  26. 26.

    Chriatian Wessels and others, Inside Africa, Think: act study, p. 16.

  27. 27.

    The Banker, “African Returns Make it the Place to be”, June 2011, p. 6.

  28. 28.

    Ibid.

  29. 29.

    The Economist Intelligence Unit, Banking in Sub Saharah Africa to 2020 Promising Frontiers, p. 1.

  30. 30.

    Nick Page & Others, Into Africa: Investment Prospects in the Sub-Saharan Banking Sector, PricewaterhouseCoopers, 2008, p. 1.

  31. 31.

    Paul Wallace, “Banks on the Climb”, The Banker, August 2011, pp. 16–18.

  32. 32.

    See Brian Caplen, “Top 100 Banks in Africa Ranking: Africa Continues to Outperform”, The Banker, January 5, 2015, p. 54.

  33. 33.

    Ibid.

  34. 34.

    Ibid.

  35. 35.

    Paul Wallace, “Africa’s Banks on the Brink of the Big Time”, The Banker, January, 2012, p. 114.

  36. 36.

    Paul Wallace, “Banks on the Climb”, The Banker, August 2011, p. 16–18.

  37. 37.

    The Economist Intelligence Unit, Banking in Sub Sahara Africa to 2020 Promising Frontiers, p. 1.

  38. 38.

    William Wallis, Andrew England and Katrina Manson, “Africa: Ripe for Appraisal”, Financial Times May 18, 2011.

  39. 39.

    Ibid.

  40. 40.

    Noel Gordon & Others, At the Tipping Point: Financial Services in Africa comes of age How Financial Institutions can Capitalise on the Growth Opportunities in Africa, Accenture, 2011, p. 3.

  41. 41.

    Hilary De Grandis and Gary Pinshaw, “Banking Building on Success”, in Africa‘s Path to Growth Sector by Sector June 2010, www.mckinseyquarterly.com retrieved January 2011.

  42. 42.

    Noel Gordon & Others, At the Tipping Point: Financial Services in Africa comes of age How Financial Institutions can Capitalise on the Growth Opportunities in Africa, p. 23.

  43. 43.

    Ibid.

  44. 44.

    David Dolan, “Citi eyes three new Africa markets”, Reuters, March 7, 2011, www.reuters.com, retrieved June 2011.

  45. 45.

    Citigroup Inc. (NYSE: C), Citi to Source $2.5 Billion to “Power Africa”, August 5, 2014, www.citigroup.com

  46. 46.

    Bloomberg, “JPMorgan Says Kenya May Be Part of Future Africa Expansion”, November 25, 2014, www.bloomberg.com

  47. 47.

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  48. 48.

    Autumn St John, “Islamic Wealth Management Opportunities in Africa”, Global Islamic Finance, November, 2010, pp. 32–36.

  49. 49.

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  50. 50.

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  51. 51.

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  52. 52.

    Bonorchis &Nasreen Seria, “The Rise of Middle Africa”, Bloomberg Markets, June 2011, vol. 6, no. 6, pp. 107–111.

  53. 53.

    Chongo Kabange, “Standard Chartered Top African banks” Africa news, www.africanews.com, March 30, 2010.

  54. 54.

    Ibid.

  55. 55.

    Bonorchis &Nasreen Seria. The Rise of Middle Africa”, pp. 107–111.

  56. 56.

    The Economist, “Africa’s banking boom, Scrambled in Africa “Chinese and Western banks are flocking to Africa but finding a strategy that works isn’t easy”, September 16, 2010, www.economist.com, retrieved January 2011.

  57. 57.

    Bonorchis &Nasreen Seria, “The Rise of Middle Africa”, pp. 107–111.

  58. 58.

    The Economist, “Africa’s banking boom, Scrambled in Africa”, September 16, 2010, www.economist.com, retrieved January 2011.

  59. 59.

    Alec Russell and William MacNamara, “ICBC Pays $5.5bn for Standard Bank stake”, Financial Times, October 25, 2007, www.ft.com, retrieved June 2012.

  60. 60.

    The Economist, “Africa’s banking boom, Scrambled in Africa”, September 16, 2010, www.economist.com, retrieved January 2011.

  61. 61.

    Peter Wise, “A Colonial Lifeline? “The Banker, May 2011, p. 84.

  62. 62.

    Ibid.

  63. 63.

    The Economist, “Africa’s banking boom, Scrambled in Africa”, September 16, 2010, www.economist.com, retrieved January 2011.

  64. 64.

    EUROMONNEY Magazine, “The Scramble for Angola”, March 2011, vol. 42, Number 503, p. 60.

  65. 65.

    Sudip Roy “Angola’s Elite Looks to Clean up In Portugal” EUROMONEY March 2011, vol. 42, Number 503, pp. 55–61.

  66. 66.

    Ibid.

  67. 67.

    Ibid.

  68. 68.

    The Economist, “Africa’s banking boom, Scrambled in Africa”, September 16 2010, www.economist.com, retrieved January 2011.

  69. 69.

    Jean-Louis Mattei, “A French bank’s vision of the African banking sector’s evolution,” Private Sector & Development, www.proparco.fr, issue 16, May 2013, pp. 26–28.

  70. 70.

    The Economist, “Africa’s banking boom, Scrambled in Africa”, September 16 2010, www.economist.com, retrieved January 2011.

  71. 71.

    Reuters, “Forget China, Invest in Africa says Russia Renaissance” Dec2, 2011, www.reuters.com, retrieved February 2012.

  72. 72.

    Reuters, “Forget China, Invest in Africa says Russia Renaissance” www.reuters.com, retrieved February 2012.

  73. 73.

    This is Africa, “The Future of African Banking”, This is Africa, www.thisisafricaonline.com, retrieved January 2012.

  74. 74.

    Godwin, I Emefiele, “Thoughts on Building Effective Supervision in the Era of Cross- Border Banks in Africa”, Keynote Speech by Governor Central Bank of Nigeria on the Occasion of the 17th Regular Meeting of the College of Supervisors of the West African Monetary Zone (CSWAMZ), CBN International Training Institute, July 2014.

  75. 75.

    Ibid.

  76. 76.

    Arnold Ekpe, “Motives for a Multiple Listing on African Stock Exchanges: The Ecobank Experience”, Private Sector Development, Proparco’s Magazine, Issue 5–March 2010–Africa’s Financial Markets: A Real Development Tool?, pp. 14–16.

  77. 77.

    Ibid.

  78. 78.

    Dominic O′ Neil, “Ecobank: Africa Banking Champion Leaps Forward”, Euromoney, September, 2011, vol. 42, no. 509, p. 336.

  79. 79.

    Ibid.

  80. 80.

    Renee Bonorchis & Nasreen Seria “The Rise of Middle Africa”, pp. 107–111.

  81. 81.

    Dominic O′ Neil, “Ecobank: Africa Banking Champion Leaps Forward”, p. 332.

  82. 82.

    Ibid.

  83. 83.

    Ibid, p. 336.

  84. 84.

    Ibid.

  85. 85.

    Autumn St John, “Islamic Wealth Management Opportunities in Africa” Global Islamic Finance, November, 2010, pp. 32–36.

  86. 86.

    Ibid.

  87. 87.

    Reuters, “Nigeria’s Stanbic wins approval for Islamic banking”, July 4, 2011, www.reuters.com, retrieved December 2011.

  88. 88.

    James Watson & Others, Into Africa Institutional investor intentions to 2016, p. 11.

  89. 89.

    See Groupe Attijariwafa bank, www.attijaribank.com as of April 2016.

  90. 90.

    Erik Heinrich, “Africa: Growth of Pan –African Banks” Global Finance, February 2011, www.gfmag.com, retrieved May 2011.

  91. 91.

    The Economist, “Africa’s banking boom, Scrambled”, September 16, 2010, www.economist.com, retrieved January 2011.

  92. 92.

    Ibid.

  93. 93.

    Ibid.

  94. 94.

    Olaf Meier, “It is still possible to Gain Access To Attractive Investment Targets with Relatively Low Capital Input” in Ernst & Young’s 2011 Africa Attractiveness Survey, It is Time for Africa, May 2011, p. 18.

  95. 95.

    The 3rd COMESA Investment Forum Connecting Africa to the World 12–13 April, 2010, Sharm El Sheikh, Egypt, Conference Report, p. 22.

  96. 96.

    Nick Page & Others, Into Africa: Investment Prospects in the Sub-Saharan Banking Sector, PricewaterhouseCoopers, 2008, p. 13.

  97. 97.

    Ibid.

  98. 98.

    Ibid.

  99. 99.

    Mariama Olatunde Ashcroft, Microfinance in Africa the Challenges Realities and Success, Micro Banking Bulletin Issue 17 Autumn 2008, www.themix.org, retrieved March 2012, p. 6.

  100. 100.

    Bransdma. Judith and Laurence Hart, Making Microfinance Work Better in the Middle East and North Africa. World Bank Institute and Private and Financial Sector Development Group, Middle East and North Africa Region, World Bank, 2000,Washington, DC, p. 1.

  101. 101.

    Anouar Hassoune Adel Satel, Islamic Finance Explores New Horizons in Africa, p. 5.

  102. 102.

    Karim, Nimrah, Michael Tarazi, and Xavier Reille. “Islamic Microfinance: An Emerging Market Niche”, p. 1.

  103. 103.

    Ibid, p. 5.

  104. 104.

    Africa Microfinance Action Forum, Diagnostic to Action: Microfinance in Africa, p. 8.

  105. 105.

    Ibid.

  106. 106.

    Ibid.

  107. 107.

    Karim, Nimrah, Michael Tarazi, and Xavier Reille. 2008. “Islamic Microfinance: An Emerging Market Niche.”, p. 6.

  108. 108.

    Ibid, p. 5.

  109. 109.

    Ibid, p. 1.

  110. 110.

    Douglas Pearce, Financial Inclusion in the Middle East and North Africa: Analysis and Roadmap Recommendations, p. 14.

  111. 111.

    Nazneen Halim, “Banking on Microfinance,” Islamic Finance News Supplement -IFN Supplement Africa- 29-July-2011, www.islamicfinancenews.com, retrieved December 2011.

  112. 112.

    Mayada El Zoghbi and Michael Tarazi, “Trends in Sharia-Compliant Financial Inclusion”, Consultative Group to Assist the Poor (CGAP), no. 84, March 2013, www.cgap.org, p. 7.

  113. 113.

    Nazneen Halim, “Banking on Microfinance,” Islamic Finance News, special Supplement Africa the Sleeping Giant, August 2011, p. 10.

  114. 114.

    International Fund for Agriculture Development (IFDA), Islamic Microfinance: Unlocking New Potential to Fight Rural Poverty, December 2012 www.ifad.org, pp. 2–4.

  115. 115.

    Nazneen Halim, “Banking on Microfinance,” Islamic Finance News, special Supplement Africa the Sleeping Giant, August 2011, p. 10.

  116. 116.

    Ibid.

  117. 117.

    Karim, Nimrah, Michael Tarazi, and Xavier Reille. 2008. Islamic Microfinance: An Emerging Market Niche, pp. 12–13.

  118. 118.

    Nazneen Halim, “Banking on Microfinance”, p. 10.

  119. 119.

    Franklin Allen & Others, “African Financial Systems: A Review” Review of Development Finance, vol. 1 issue 2 April–June, pp. 79–113.

  120. 120.

    Charles Roxburgh & Others, Lion on the Move: The progress and Potential of African Economies, p. 8.

  121. 121.

    The 3rd COMESA Investment Forum Connecting Africa to the World 12–13 April, 2010, Sharm El Sheikh, Egypt, Conference Report, p. 7.

  122. 122.

    Ibid.

  123. 123.

    Ekmeleddin Ihsanoglu, Keynote Address on Enhancing Economic Cooperation Among Muslim Countries- The Role of OIC H.E. by the Secretary General, Organization of Islamic Cooperation IIUM Journal of Economics and Management The International Islamic University Malaysia 17, no. 1 (2009): 13–30.

  124. 124.

    Eswar Prasad “Is Africa Poised to Steady, Rapid Growth?” The Economist, September 7, 2010, www.economist.com, retrieved May 2011.

  125. 125.

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  126. 126.

    Ibid.

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    Muhammad Al Bashir Muhammad Al Amine

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Muhammad Al Amine, M. (2016). Financial Sector as a Backbone of Economic Growth: The Banking Sector . In: Islamic Finance and Africa's Economic Resurgence. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-28835-2_5

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