Equity Group Holdings Ltd., owner of Kenya’s second-biggest bank by market value, expects an Ethiopian entry to the World Trade Organization later this year to provide an opportunity for the lender to expand.
“We are very optimistic that with the WTO meeting later this year in Africa, Ethiopia may be persuaded to sign up to the organization and this will open the country for foreign investment,” James Mwangi, Equity Group’s chief executive officer, said in a May 12 interview in the Kenyan capital, Nairobi.
Ethiopia, Africa’s most populous country after Nigeria, is among 10 new markets Equity Group is targeting in a five-year plan announced March 31 and backed by 200 billion shillings ($2 billion) of funds. The country locked out Kenyan banks in November 2012 in a move aimed at encouraging domestic investment in the industry. The 10th WTO ministerial conference is scheduled to be held in Nairobi in December.
The countries Equity Bank intends to enter include Burundi, Mozambique, Malawi, Zambia and Zimbabwe, with the Democratic Republic of Congo a priority alongside Ethiopia, Mwangi said.
“That is what I would be calling the bet-winning horse, going into Ethiopia within the next two years,” he said. “But we would be glad if DRC opened up because it provides the ultimate opportunity for its economy has been growing between nine and 13 percent for the past 10 years.”
Congo has a population of 85 million people, with just 3.8 million having access to financial services, he said. “To us that is a virgin field. So I will be prioritizing these two countries.”
[Bloomberg]