Egyptian banks unconcerned with Africa

Hossam Mounir
5 Min Read
Ezz El-Din Hassanein, a banking expert and general manager of an Arab banks operating in the Egyptian market

Despite Egyptian banks’ dedication to expanding operations in overseas markets, they are still significantly unconcerned with Africa, whether northern or southern countries.

The National Bank of Sudan (NBS) was established by National Bank of Egypt (NBE) as well as two representative offices of NBE in South Africa and Ethiopia.

Suez Canal Bank has a representative office in Libya while Banque du Caire has a branch in Uganda called Cairo International Bank in Kampala.

The Housing and Development Bank (HDB) agreed with Trade and Development Bank of Libya to provide joint banking services and establish a number of joint companies in Libya but the political turmoil in Libya halted this partnership.

HDB also signed a partnership agreement with Banque Marocaine du Commerce Extérieur (BMCE) to utilise the widespread branches of the bank in Africa, as well as financing Moroccan real estate projects in Africa.

According to board member of the Suez Canal and the Arab-Sudanese Bank Mohamed Abdel Aal, there is a severe absence of Egyptian banks in both northern and southern Africa.

He attributed the absence of Egyptian banks in Africa to several reasons, mostly the late foreign colonialism in many African countries, political instability, and the differences between economic and banking systems in Egypt and other African countries.

Most African countries suffer a severe shortage of foreign currency and most of the banks’ operations are based on foreign trade financing. Such business operations do not achieve high revenues and do not attract Egyptian banks to work in these countries. Abdel Aal ruled out that this situation could be changed in the future.

Opening branches of Egyptian banks in African countries or vice-versa depends on the volume of trade exchange between Egypt and these countries, which is very weak.

He said Egyptian banks rely on their corresponding banks to implement their business operations in Africa. The presence of Egyptian banks is not as important as supporting political and economic relations between Egypt and those countries.

Opening branches of Egyptian banks in Africa should follow the boost of economic and trade relations between Egypt and those countries.

Former governor of Central Bank of Egypt (CBE), Hisham Ramez, said before leaving office that the upcoming period will witness the expansion of Egyptian banks in all African countries to promote trade exchange between Egypt and Africa, as well as facilitating the movement of joint investments with African countries.

Under the guidance of CBE Egyptian, banks will open branches in African countries to help businessmen increase trade operations and benefit from the Free Trade Agreement with African economic blocs, Ramez said.

Ezz El-Din Hassanein, a banking expert and general manager of an Arab banks operating in the Egyptian market, believes the Egyptian banking presence in Africa is limited and weak. While many countries are racing to enter Africa because of its economic constituents, Egypt is still not taking advantage of its presence on the continent.

Many banks and international financial institutions started spreading their business in various African countries to finance international companies investing there, as well as financing the infrastructure of many African countries.

He affirmed the presence of Egyptian banks in Africa, namely the state-run banks, is important and vital for Egyptian exports to African countries especially since Egypt has several free trade agreements with a number of African nations.

Egyptian banks operating in Africa can benefit from the large funds provided for Egyptian companies there or those related to Egyptian exports to Africa.

“The Egyptian companies operating in Africa are still modest and the volume of Egyptian-African trade exchange remains weak. We should encourage Egyptian companies to invest in Africa and the Egyptian government should contribute to building the infrastructure of some African countries with joint finances from Egyptian banks,” Hassanein said.

The presence of Egyptian banks in Africa requires the government and Egyptian businessmen to work in the continent.

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