Banking & Financial Services
From The Report: Gabon 2014
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As a bastion of liquidity within the financially turbulent Economic and Monetary Community of Central Africa (Communauté Économique des États de l’Afrique Cen-trale, CEMAC), Gabon competes head-on with the more populous Cameroon for the title of regional banking centre. The regional stock exchange based in Gabon is also beginning to see an uptick in activity and insurance penetration is consistently higher than elsewhere in CEMAC.

In recent months, banks have sustained the double-digit growth of the past three years, albeit at a slightly slower pace, driven by both deposits and lending. The bulk of growth has been due to lending to the public sector for projects laid out under the Emerging Gabon national development plan. Gabon also has a surfeit of liquidity in the banking sector, reducing the need for companies to turn to the capital markets. Since the first listing in 2008, the markets have been dominated by bonds. However, 2013 saw the region’s first initial public offering and subsequent equity listing on the exchange, and, according to local press reports, other companies are likely to follow suit in the medium term. Home to 1.63m people, Gabon has one of the most dynamic insurance markets in Central and West Africa. The local insurance industry is strong compared to other countries in the region due to its high level of industrial contracts. Efforts to increase insurers’ exposure to clients through investment in multiple sales channels, the introduction of new obligatory insurance lines and the implementation of microinsurance products could all help to expand the Gabonese market in 2014.

This chapter contains an interview with Patricia Danielle Manon, Director-General, BGFI Bank Gabon.

Articles from this Chapter

Overview

Penetration and lending increase in a vastly underserved market
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As a bastion of liquidity within the financially turbulent Economic and Monetary Community of Central Africa (Communauté Économique des États de l’Afrique Centrale, CEMAC), Gabon competes head-on with the more populous Cameroon for the title of regional banking centre. While its lenders enjoy a cash surplus – total bank credit of CFA2.4trn (€3.6bn) accounted for 23.3% of GDP in 2013 – banking penetration, at 18.8% of the population, falls shy of its potential. The state’s CFA17trn (€25.5bn)…

Analysis

Transcending maturity mismatches, from liquidity to lending
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Excess short-term liquidity is a chronic challenge for banks operating in Central Africa, creating significant mismatches between the maturity of liabilities and the economy’s longer-term needs. Banks now account for about 85% of financial assets in the Economic and Monetary Community of Central Africa (Communauté Économique des États de l’Afrique Centrale, CEMAC); growing liquidity thus reflects a lack of depth in the region’s capital markets. Given the limits on deploying short-term capital…

Interview

OBG talks to Patricia Danielle Manon, Director-General, BGFIB ank Gabon
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Interview:Patricia Danielle Manon What can financial institutions do to improve the banking penetration rate, especially in rural areas? PATRICIA DANIELLE MANON: Establishing a banking agency in Gabon involves high fixed investment costs, and every new branch requires a financial, social and marketing viability study. To increase the banking penetration rate, the sector must think beyond traditional methods. Banks should be able to adapt to their customers and offer modern services, such as mobile banking or any service not needing a physical person behind a window. Given the low penetration rate, there is certainly opportunity for development…

Overview

Activity is picking up on the nascent regional exchange
OBG
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The regional stock exchange based in Gabon is beginning to see an uptick in activity. Since the first listing in 2008, the market has been dominated by bonds. This is in part a result of factors common across most African economies: limited transparency among eligible corporates, for example, and a preference to avoid diluting ownership – both of which limit the number of firms willing to list. Gabon also has a surfeit of liquidity in the banking sector, reducing the need for companies to turn…

Overview

Insurance premiums are rising quickly despite a limited client base
OBG
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Home to 1.63m people, Gabon has one of the most dynamic insurance markets in Central and West Africa. Although personal lines are beginning to expand, sector development has been driven by large-scale industrial operations. The domestic financial sector does not have the capacity to fully underwrite major industrial and transport risks, but operators circumvent this through fronting agreements in which high-risk premiums are transferred abroad to foreign partners and reinsurers. The process is well-established…

Analysis

New actors to boost competition in Gabon and the sub-region
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Despite the high level of competition in Gabon’s insurance market, strong margins and steady growth in the last five years continue to attract new players. Most recently, Wafa Assurance, Morocco’s main insurance provider by market share, signalled in March 2014 that it plans to launch operations in Gabon and three other countries in the Central Africa region. For a market that has largely developed on the back of the extraction of natural resources, Gabon’s insurance sector has proven its…