Loomnie

From a new Accenture report titled At the tipping point: Financial services in Africa comes of age:

The Accenture research study… highlights new growth triggers for financial services, pointing to rapid market development in some countries. While the paths to growth vary, these triggers often include innovation through (very) low-cost offerings and distribution, dramatically opening up access to financial services; investment in physical infrastructure and financial infrastructure development through more sophisticated regulations, and institution building; strong economic growth and inward investment in the economy, including by financial institutions following their clients into new countries; and growth in consumer markets driven by demographic change, including the rise of the urban middle class, and the growth in microfinance-supported businesses in rural areas.

In Accenture’s view, banks and insurers will not achieve sustained success in Africa’s fast-developing markets simply by replicating traditional business models from developed countries. New strategies are needed — including adapting retail banking models to local cultural needs, and finding new ways to serve low-income customers profitably. Contributing to nationbuilding and the development of local communities is a further prerequisite in many countries. And attempts to roll out standardised models must take into account differences in local business and regulatory environments.

The report [pdf].

From keith Hart:

The anthropology of finance has flourished in the last decade or so. The doyen of this field is Bill Maurer who conducts research on law, property, money and finance, particularly new and experimental financial and currency forms and their legal implications. He is the author of Mutual Life, Limited: Islamic Banking, Alternative Currencies, Lateral Reason. One focus of his research is on the shifting regulatory landscape of the offshore Caribbean; and on the cultural implications of new forms of electronic money and payment systems and regulation of mobile phone-enabled payment systems. Maurer has recently been engaged in a series of collaborations with industrial and design professionals who work on the development of new digital and mobile phone-enabled money transfer and savings systems. This led to the founding of the Institute for Money, Technology and Financial Inclusion. By exploring people’s creative uses of money beyond its traditional functions, he hopes to provoke deeper reflection on the multiple meanings of money. Maurer recommends a sceptical, pragmatic approach to money and is thus more interested in what people can do with money than what it means to them. Like Jane Guyer (Marginal Gains: Monetary Transactions in Atlantic Africa), he believes that anthropologists have bought too easily into the liberal economists’ idea of money as a means of exchange rather than as a means of payment.

It has now become almost commonplace for anthropologists to work in financial centres. Ellen Hertz (The Trading Crowd: An Ethnography of the Shanghai Stock Market ) was prescient in carrying out field research on the Shanghai stock market. Caitlin Zaloom (Out of the Pits: Traders and Technology from Chicago to London) focused on how financial traders adjusted to new information technology. Both of these studies, however, are quite traditional in their focus, being concerned with the traders’ local practices and point of view, even if their business is global at another level. Karen Ho goes further by linking her ethnography to a broader analysis of political economy. Based on interviews with employees of Goldman Sachs, Morgan Stanley and other great finance houses, Liquidated: An Ethnography of Wall Street explicitly engages with larger distributional questions, such as those involved in the system of granting bank employees large bonuses.

Here is a column I wrote shortly after reading karen Ho’s book.

According to a report by Bain & Company, quoted in a Reuters article:

Bain Partner Andrew Tymms said the continent’s financial services industry will continue to grow at a compound annual rate of 15 percent to 2020, outpacing gross domestic product growth.

“Retail banking will grow faster than corporate banking … to make up 38 percent of banking revenue by 2020, bringing in the previously unbanked population and shifting the experienced to sophisticated products,” Tymms said.

The study, “Financial Services in Africa: A Decade of Opportunities” reckons financial firms will make up 19 percent of Africa’s gross domestic product by 2020, compared with 11 percent in 2009.

H/T @AfricaResearch, whose blog you should check out.

Mallam Lamido Aminu Sanusi has been named as the Central Bank Governor of 2010 for both the African continent and the entire world, by the prestigious Banker Magazine.

The editor of the magazine, Brian Caplen, says that few candidate names generate an overall consensus on judging panels, and yet, when it came to finding the best global central bank governor of the year, Mr Sanusi was chosen unanimously.

From the BBC.

… is the title of a new book by Lucy Norris of the Department of Anthropology, University College, London.

The blurb:

In today’s globally connected marketplace, a wedding sari in rural north India may become a woman’s blouse or cushion cover in a Western boutique. Lucy Norris’s anthropological study of the recycling of clothes in Delhi follows garments as they are gifted, worn, handed on, discarded, recycled, and sold once more. Gifts of clothing are used to make and break relationships within middle-class households, but a growing surplus of unwanted clothing now contributes to a global glut of textile waste. When old clothing is, for instance, bartered for new kitchen utensils, it enters a vast waste commodity system in which it may be resold to the poor or remade into new textiles and exported. Norris traces these local and transnational flows through homes and markets as she tells the stories of the people who work in the largely hidden world of fabric recycling.

Click for more information on the book.

From NEXT:

A study by the USAID on the West Africa Trade Hub has revealed that the region’s transport costs is the highest in the world and remains so because the trucking market in the region is highly regulated.

“The regulationof the industry deter competition that would go a long way toward reducing transport costs” stated the transport advisor at the USAID Trade Hub and co-author of the study; Andy Cook with another internationally recognized transport expert; Sadok Zerelli. “The study confirms what many have suspected about the West African trucking market” the reported affirmed, noting that reducing costs of transport is key to ensuring regional food security.

The abstract of a paper of the same title:

For the past decade, the U.S. economy has been driven not by industrial investment but by a real estate bubble. Although the United States may seem to be the leading example of industrial capitalism, its economy is no longer based mainly on investing in capital goods to employ labor to produce output to sell at a profit. The largest sector remains real estate, whose cash flow (EBITDA, or earnings before interest, taxes, depreciation, and amortization) accounts for over a quarter of national income. Financially, mortgages account for 70 percent of the U.S. economy’s interest payments, reflecting the fact that real estate is the financial system’s major customer.

As the economy’s largest asset category, real estate generates most of the economy’s capital gains. The gains are the aim of real investors, as the real estate sector normally operates without declaring any profit. Investors agree to pay their net rental income to their mortgage banker, hoping to sell the property at a capital gain (mainly a land-price gain).

The tax system encourages this debt pyramiding. Interest and depreciation absorb most of the cash flow, leaving no income tax due for most of the post-1945 period. States and localities have shifted their tax base off property onto labor via income and sales taxes. Most important, capital gains are taxed at a much lower rate than are current earnings. Investors do not have to pay any capital gains tax at all as long as they invest their gains in the purchase of new property.

This tax favoritism toward real estate—and behind it, toward bankers as mortgage lenders—has spurred a shift in U.S. investment away from industry and toward speculation, mainly in real estate but also in the stock and bond markets. A postindustrial economy is thus largely a financialized economy that carries its debt burden by borrowing against capital gains to pay the interest and taxes falling due.

If you are interested in understanding how industrial capitalism became financial capitalism, the paper is a very good place to start. Of course, you can also read David Harvey’s A Brief History of Neo-liberalism, and his most recent, The Enigma of Capital.

H/T @wonkmonk_

Check this out:

“Here’s something you always like to see,” Stewart says, scanning the front page of the Washington Post.“ ‘U.S. Trade Deficit Startles Markets.’ Now, we’ve understood the U.S. trade deficit for a while. Are the markets small children that are easily startled? The next day, they’ll get an unemployment number and go, ‘Oh, I don’t know why we were startled and lost 200 points yesterday; today, we realized the shirt on the chair wasn’t a monster, so we’re going to put 300 points back on the Dow because we’re fucking 5 years old.’ ”

Read it all here. H/T @Dollabrand.

President Goodluck Jonathan says Nigeria’s power industry can only grow through liberalisation:

The government will sell 11 distribution companies created out of Power Holding Co. of Nigeria, the state-owned utility, and allow private companies to set up power plants using natural gas, hydro-electric dams and coal-powered stations, Jonathan said in a speech in Lagos, the commercial capital, broadcast on state television today [yesterday].

Listen to excerpts of the speech. Also, check out Saratu’s analysis.

Apparently, the fairly fragmented but resilient world of money transfer is getting consolidated:

Sigue, a US money-transfer company strong in Latin America, is buying the money-transfer business of Coinstar for $41.5m. Coinstar’s network allows users to transfer cash to 23,000 points worldwide – and Sigue’s CEO, Guillermo de la Viña, says the acquisition will make his company “one of the largest global money transfer companies with pay out locations in over 130 countries.”

More deals may follow this year. Unistream, a Russian money transfer company with 30 per cent market share in former Soviet countries, is looking towards the Gulf, the second-largest source of private financial transfers after the US. Reuters recently reported that Western Union and MoneyGram were looking at ways to expand into Asia.

The moves testify to remittances’ resilience. Flows to developing countries shrunk in 2009, down 6 per cent to $307bn, as immigrants in the US and elsewhere lost jobs (particularly in construction) and, in many cases, returned home. However, a new World Bank report forecasts that remittances will rise by over 6 per cent in 2010 and over 7 per cent in 2011.

All that is well and good, but how long is it going to take for someone to figure out how to include everyday Africans in the global, ‘borderless’ world of finance? I am thinking of payment services, not remittances services. In the past one month, three friends who are based in Nigeria have asked me whether I can help them open a Paypal account. Some people they are doing some work for agree to pay only through Paypal. They refuse to use Western Union because, well, they don’t trust the Nigerian end of the service.

Don’t tell me that nobody thinks that there might be some money to be made in Africa from that. Or that they are too scared of bad, fraudulent Nigerians to try and introduce such services there. We all know that no matter how sophisticated and bad you think Nigerian fraudsters are, the ones in developed countries are much worse. If those services can be made to work securedly in developed countries, there is no reason they shouldn’t be able to get them to work in African countries.

Or am I missing something?