SOUTHERN AFRICA ROUND TABLE MEETING

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• SOUTHERN AFRICA ROUND TABLE MEETING
• ON
• MAKING FINANCE WORK FOR AFRICA
• STRUCTURED FINANCE
• OPPORTUNITIES AND INNOVATIONS
• INTRODUCTORY REMARKS BY
• SIYANGA MALUMO
• FIELDSTONE AFRICA (PTY) LTD
• JOHANNESBURG
• LIVINGSTONE, ZAMBIA 7TH MAY 2007

WORLD BANK DFID SIDA
USAID BANK OF ZAMBIA
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AFRICA TODAY
Old JSE Johannesburg
Poverty in Africa
Zimbabwean Woman
Market Scene
Road in Nigeria
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AFRICA TODAY
Rwandese Refugees
Upmarket Apartments
Subsistence Farming
Learning Under a Tree
Prosperous Farmer
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• AFRICA TODAY
• Geography
• 30 million Sq. km
• 53 Countries, including the Islands
• Demographics (2002)
• 800 Million People
• The Economy (2002)
• Gross Domestic Product US 560 Billion
• Average Per Capita Income US 720
• Total Debt US 300 Billion

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CONSTRAINTS TO AFRICAN DEVELOPMENT

• Low Incomes, Low Savings, Low Capital Formation
• Low Levels of Investment
• Underdeveloped Formal Economy
• Underdeveloped Middle Class (Key to Accelerated
  Development)
• High Cost of Funds
• Irresponsible Management of Public Funds
• High Risk Perception
• Shallow and Narrow Financial Markets
• Lack of Individual Ambition Individual
  Initiative (Looking to Government for Everything)

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CONSTRAINTS TO AFRICAN DEVELOPMENT

• Culture of Financial Irresponsibility (Borrowing
  with No Intention to Repay)
• Culture of Extravagance and Conspicuous
  Consumption (A Mercedes is Preferred to
  Investment)
• Lack of Political Stability
• Policy Fluidity
• Unreliable Legal Systems
• Bountiful Nature (Good Climate, Benevolent
  Forests Rivers)
• Perpetual Despair (Leaving it all to God)
• Proclivity for Reliance on Khaki Envelopes
  (Chai, Dash, Baksheesh, Cold Drink)
• Too Many Talking Shops

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• REMEDIES

• Pan African Approach to Development (Make NEPAD
  Work!)
• Develop Effective Financial Intermediation
  (Banks to Reduce Locking Funds in T-Bills at
  Expense of Lending)
• Promote Coordinated Approach in the Financial
  Sector (Banks, Insurance, Pension Funds, Mortgage
  Institutions to Synchronise)
• Accelerate Africanisation of the Financial
  Sector (to Facilitate Better Appreciation
  Management of African Risk)
• Promote Creation of Continent-Wide Investment
  Credit Guarantee Institutions (to Complement
  Afrexim Bank, to Promote Project Funding
  Investments)
• Increase Intervention of Bilateral
  Multilateral Development Finance Institutions in
  Funding Private Sector in Africa

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ADVANTAGES OF STRUCTURED FINANCE

• Creative Management of Financial Risk
• Innovative Technique (That Makes the Impossible
  Possible)
• Facilitates Transactions (Especially Project
  Finance and M A)
• Facilitates Economic Development
• Facilitates Indigenous Empowerment
• Creates Wealth

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THE END