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Barclays' exit puts focus on Africa

Wednesday, March 02, 2016 - 01:32

Barclays says its decision to sell off its African operations doesn't relate to economic sentiment, but as Sara Hemrajani reports, many analysts and economists are raising concerns about the continent's prospects.

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Barclays' exit from Africa isn't just putting the spotlight on the bank's fortunes -- It's also raising concerns about the continent's prospects. The British lender itself says selling its African operations has nothing to do with economic sentiment. Barclays Kenya CEO. SOUNDBITE: Jeremy Awori, Barclays Kenya CEO, saying (English): "Barclays Bank of Kenya has best-in-class ratios on capital, liquidity and non performing loans, which ensures we are able to deliver value to all our stakeholders." But many investors are cooling on sub-Saharan Africa, says IG's Alastair McCaig. SOUNDBITE: Alastair McCaig, Market analyst, IG, saying (English): "The dimming appreciation that the investment community has as far as the BRICS [Brazil, Russia, India, China and South Africa] nations are concerned. The move into sort of emerging markets and the likes of South Africa, and a very commodity-orientated economy as well, has been diminished because of the cooling Chinese and Asian economic regions." Weak commodity prices and slowing Chinese demand are hurting Africa's leading markets. Oil-dependent Nigeria is imposing budget cuts and foreign exchange controls to protects its rapidly depreciating currency. The South African rand is also losing ground, as the country's mining exports fall, nearly a quarter remain unemployed and the rating's agencies hint at more downgrades. Barclays says it could take up to three years to offload its African stake. But a lack of obvious buyers amid declining GDP could make the sale difficult.

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Barclays' exit puts focus on Africa

Wednesday, March 02, 2016 - 01:32