Interview: Denis Meporewa
To what extent are exogenous conditions affecting the banking sector in Gabon?
DENIS MEPOREWA: Despite the sovereign debt crisis in the eurozone, the situation of the Gabonese banking system remains satisfactory. As such, at the end of March 2012 the total level of aggregate balances was up by 25.1% in annual terms, as a result of the simultaneous increase in deposits by 28.1% and loans by 56.2%.
The current crisis in the eurozone is the consequence of poor sovereign debt management by certain countries. The crisis should therefore not have any direct consequence on the CFA franc, of which the major aggregates remain in good condition. It is nevertheless important to be vigilant. Restrictive budgetary policies being implemented by certain countries could provoke a slowdown in global demand and subsequently influence the prices of raw materials and various other products that we supply to the market.
How can the liquid banking sector finance an increased number of small and medium-sized enterprise (SME) development projects?
MEPOREWA: At this point in time, SMEs are very important to the economy, and their role in developing and creating jobs is similarly vital. Despite their essential role in Gabon, SMEs still have limited access to sources of finance. In order to address this issue, it is important to identify the principal reasons and propose solutions. These solutions imply that there are efforts that need to be made by the SMEs themselves, which must improve their training and accept the need to supply reliable, high-standard accounting information. Banks ought to also make an effort, by accepting simplified, streamlined accounting documentation and adapting their product offerings to the specific needs of small businesses. Beyond this, the authorities should take measures to set up a guarantee fund to minimise the risks and costs of loans for the banks. Additionally, microfinance will play a significant role in financing business development projects put forward by various SMEs.
How can financial intermediation be encouraged?
MEPOREWA: At the moment, banking services do not cover the entire national territory. As a result, it is necessary to increase and diversify the offering of financial services, especially in the country’s interior, so that banking services are accessible throughout Gabon. To do this, efforts are being made to encourage the development of microfinance organisations through the creation of a favourable legal and regulatory environment in which they can thrive.
Similarly, owing to the difficulties faced by traditional banks when opening agencies around Gabon, the BEAC encourages banks to develop mobile banking services, which enable them to reach many more clients and thereby increase banking penetration. To date, two banks have already obtained approval to carry out mobile banking operations.
To what extent can local banks finance large-scale projects in areas like energy and infrastructure?
MEPOREWA: Financing large-scale projects necessitates a significant level of resources available over the long term. From now on, even if the Gabonese banking sector is still very liquid, this does not change the fact that its capacity to finance large-scale projects remains rather limited for regulatory reasons. In fact, banking ratios limit the possibility for banks to use short-term financial resources for long-term uses. Henceforth, it is necessary to set up entities that will collect long-term savings as well as turn to establishments that specialise in infrastructure financing, such as the Development Bank of Central African States and the African Development Bank.
The first obstacle to long-term financing is a consequence of the nature of available resources and the constraints resulting from prudential rules. Furthermore, the financial market’s lack of dynamism is deplorable. To get around these obstacles, the Gabonese authorities are creating a fund to finance both infrastructure and the Caisse des Dépôts et Consignations.
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