International Courant
Earlier than he took up his place because the President of the West African Growth Financial institution (BOAD) in 2020, Serge Ekué had already established a stable repute as an excellent banker on the worldwide circuit.
He labored at a really senior stage with the Natixis company funding financial institution in Paris, Hong Kong and London earlier than the decision to return to Africa grew to become too sturdy to show down.
He subsequently introduced over 20 years of expertise in worldwide finance, structured finance and capital markets to his new function as head of BOAD, a multilateral improvement finance establishment devoted to selling improvement and financial integration amongst states within the regional bloc.
For Ekué, this pivot to improvement finance was a welcome alternative to use his abilities and expertise in additional concrete or “tangible finance”, as he phrases it.
That was the first push for him to swap London for Lomé, the place BOAD is headquartered. “I used to be primarily motivated by a need to assist foster the continent’s promising future and harness its extremely big assets and its capability to evolve and alter.
“Additionally, I wished to be a part of the efforts to handle key constraints – resembling energy autonomy, schooling entry, housing, employment, ladies empowerment and the necessity to lay the foundations in order that future generations can excel and succeed.”
He says the change additionally made it simpler for him to clarify the character of his work to his youngsters. “While you sit in Cannon Avenue [in the City of London] it’s tough to see the impact that your day-to-day actions have on the lives of individuals – however over right here, what we do has very seen and tangible results on the lives of individuals.”
Established in 1973, BOAD is the main widespread improvement finance establishment for the Financial Neighborhood of West African States (ECOWAS).
Through the years, BOAD has financed sectors resembling agriculture, schooling, healthcare, and transportation, contributing to improved infrastructure and social companies. It has helped scale back poverty and improve the general high quality of life within the area, the banker inform us.
Ekué says the financial institution has a lot to be happy with because it celebrates its golden jubilee 12 months. It has mobilised investments to the tune of billions of {dollars} into the area’s economies, with palpable impacts on the lives of residents, he says. The investments have expanded entry to electrical energy, constructed much-needed roads and different infrastructure options which have improved social companies like well being, schooling and entry to wash water.
Ekué may be very enthusiastic in regards to the affect of the Financial institution’s present plan, the Djoliba 2021-25 Plan. Named after the magnificent River Niger, which flows by the lands of many West African Financial and Financial Union (WAEMU) member international locations, it serves as a hyperlink between the peoples of West Africa and, in the end, the Atlantic Ocean.
The plan seeks to consolidate the function that the financial institution has been taking part in since its inception, deepening investments in transport, electrification, reasonably priced housing and digitalisation, in addition to supporting efforts to spice up manufacturing and the creation of regional worth chains. “The Djoliba Plan is successfully a further €5bn over 5 years, or a further €1.2bn [between now and 2025],” Ekué says.
As of June 2023, the financial institution disbursed about CFA1,500bn ($2.45bn) of the CFA3,300bn ($5.4bn) it has focused to boost and spend on tasks in member states’ economies below the plan.
Ekué explains that the determine will go up consistent with the financial institution’s personal capitalisation drive. A primary elevate elevated its capital by CFA554.35bn ($910m), which he says will “give our establishment the mandatory levers to implement its 2021-2025 Strategic Plan and keep its debt and capital adequacy ratios at snug ranges”.
The plan additionally entails adjustments to organisational construction and composition of the workforce to allow it to spice up its capability to ship on its objectives. In different phrases, he needs to turbo-charge disbursements and interventions.
For the long term, the financial institution will probably be saying, after in depth consultations with the related stakeholders, a 50-year roadmap that may information its actions for the following half-century of its existence.
“We will probably be holding thematic workshops on our 5 precedence areas. We may even have conferences with buyers and the non-public sector and a political summit which can assist current our plan to the WAEMU and Heads of State for validation.”
Basically, nevertheless, the financial institution’s function will stay the identical. “It’s evident that within the years to come back, BOAD, like another improvement financing establishments, will proceed to play its counter-cyclical function to help the event efforts of its member states, that are more and more confronted with challenges resembling budgetary constraints.”
Adapting to altering paradigms
Whereas the aim stays the identical, the instruments would possibly differ, owing, at the very least partly to the altering paradigm inside which the financial institution operates.
Within the post-Covid years, the fiscal place of a number of international locations within the area has deteriorated considerably and methods that will have made sense prior to now might not be so acceptable now.
However Ekué and the financial institution are hanging on. “As you recognize, I grew up on this business of innovation – funding banking – so the instruments that the business has are very pure to me.
“On the finish of the day, a very powerful factor is that we’re capable of finding a strategy to execute transactions with the most cost effective potential funding, originate the very best property and see how these can be utilized for the advantage of the individuals within the area.”
There’s a pragmatism hinted at right here that displays and underpins the sort of establishment Ekué says he needs BOAD to be – a solutions-driven financial institution.
“The one factor I’m consistently inquisitive about is the way in which that we could be seen to be an actual options home. That implies that we do no matter it takes to carry options to the desk; to search out the perfect methods, the most cost effective funding and longer maturity funds and to originate property. The main focus is basically on the way to discover options for our purchasers and options for our shareholders.”
Which means, he explains, that the financial institution is just not wedded to any explicit approaches and is as an alternative targeted on the top, somewhat than the means. “It’s actually a options mindset, way more than about course of and procedures.”
He has been pleasantly stunned, he provides, on the calibre of the groups he discovered at BOAD. They’ve been agile, reactive and open to new concepts. Finally, he says, they’re those who execute on the bottom.
What the financial institution wants to offer is capital and BOAD has plans in place to spice up its capital by $1.5bn over two phases. “The primary CFA554.35bn ($910m), agreed and accomplished this 12 months, will improve our tier one capital and that may come from the contributions by class A and class B shareholders by quite simple devices.
“So as to add to that, we’re engaged on hybrid constructions with extremely subordinated transactions with the very best potential fairness content material of about $600m and that will lead us to $1.5bn.
“Our establishment will need to have its personal funds and a very good monetary construction that enables it to extend its assets,” Ekué asserts.
African DFIs sprang into motion
Current crises have confirmed the numerous function of African improvement finance establishments to African international locations and their economies. As non-public capital markets have shut doorways to them and multilaterals are much less agile than is good, it’s African DFIs which have sprung into motion to supply well timed help.
Properly capitalised establishments current an insurance coverage choice for a area that even on good days, has usually obtained much less funding or help than it so clearly wants.
As capital turns into costlier and the geopolitical waters turn out to be choppier, the sensation across the continent is that African international locations might have to rely extra on their very own establishments and the modern devices that these establishments can deploy to help them.
Ekué shares this view. “As a matter of truth, capital is essential to sustaining improvement, and monetary useful resource mobilisation is a continuing problem.
“Ever since I’ve been on the helm of BOAD, I’ve noticed at first hand the necessity to strengthen our capability to leverage reasonably priced capital to finance our improvement tasks.
“So we’re working intently with our overseas companions, regional and worldwide capital markets and buyers to diversify our sources of funding and enhance our capability to boost funds successfully and in beneficial circumstances. This additional entails selling financial and political stability within the area to spice up buyers’ confidence,” he says.
For Ekué, a super method is one the place there’s shut collaboration and complementarity between African DFIs with their intimate data of the native terrains and MFIs with their higher rankings and better capability to boost and disburse capital. At the same time as African DFIs broaden their roles, this collaboration presents a brand new strategy to disburse improvement finance on the continent.
“Establishments like ours have the origination capability. We all know our area and we all know what now we have to do. So I imagine that establishments with higher rankings should work with us to, in a way, assist de-risk our portfolios as a result of we’re the pure risk-takers in our areas.”
As African DFIs turn out to be extra assured and assertive, that is an method that’s gaining help. It might utilise the immense, helpful and above all, related capabilities constructed on the continent whereas addressing the problem of finance, which is more likely to persist at the very least into the medium time period.
A seat on the desk
The collaborative method is an concept that requires thought and maybe, motion. That’s the reason Ekué has positioned it on the centre of his pitch to be the following chair of the Worldwide Growth Finance Membership (IDFC), a world affiliation of 26 nationwide, regional, and multilateral improvement banks that BOAD has been a member of for the previous decade.
The group works to advance widespread improvement aims, together with the Sustainable Growth Objectives and the Paris Local weather Settlement.
It selects its chairman from a steering group. The present chair is Rémy Rioux, chief govt of the French Growth Company. Ekué believes that from the presiding chair, he would be capable of canvas this proposition extra successfully and maybe, assist result in a number of the adjustments to the worldwide monetary system that has turn out to be a trigger célèbre on the worldwide circuit in current instances.
Ekué’s management of such an organisation would come on the proper time for the continent and the worldwide monetary system, he argues. He seems clear-eyed in regards to the points that he’d must confront from the primary day.
“We’ve got quite a lot of challenges that we share. We’ve got the scenario in South America, which has been in comparison with that in Asia. The thought is that now we have to share finest practices, share knowledge and be a part of forces to advertise our varied regional banks in order that they’re as soon as once more seen as related in the case of enhancing improvement.”
His platform consists of proposals to strengthen public improvement banks (PDB) in challenge design and execution; align PDBs with the 2030 local weather objectives; promote a brand new monetary structure that’s attuned to the local weather problem and allocates the particular drawing rights in accordance to that want; and place social affect and innovation on the coronary heart of improvement planning.
For the continent, an African management of one more international establishment that has, till now, solely had Europeans on the helm could be an enormous increase. It might imply a chance to offer African points the eye and understanding that’s not at all times assured. At a time of profound change, when era-defining choices are being contemplated, the continent that’s at the moment the youngest and can quickly be probably the most populous, Africa, ought to have a seat or a number of on the tables the place these choices are being made.
Positioning BOAD as a options home
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