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West Africa
T
hree West African markets re-
ceived ratings this year. Nigeria
accounted for 40% of the regional
total, while Ghana and Ivory Coast
shared the remainder. Some competi-
tion for custody services was evident in
Nigeria and Ivory Coast with ratings in
each case spread across a few service
providers. In Ghana, meanwhile, Stand-
ard Chartered sweeps the board. For
the region as a whole, the bank accounts
for 65% of responses received, perhaps
confirming the attraction of regional
service offerings to inward institutional
investors.
In the same vein, efforts have been
underway to bring the various financial
markets across the region into clos-
er harmony, The West Africa Capital
Markets Integration Council (WACMIC)
was inaugurated on 18 January 2013 as
the governing body for the integration of
West African capital markets. Its objec-
tive is to establish a harmonised regula-
tory environment for the issuance and
trading of financial securities across the
region, as well as to develop a common
platform for cross-border listing and
trading of such securities in the sub-re-
gion.
In the 2019 ABSA/OMFIF Financial
Markets Index, Nigeria is cited as one of
nine markets to have performed above
average in terms of creating an inves-
tor-friendly environment. The market
now ranks sixth, up one place from 2018.
It is ranked second behind South Africa
in market depth and third behind South
Africa and Mauritius for market trans-
parency, tax and regulatory environment.
The report suggests that the issuance
of new debt with longer tenor has
lengthened the yield curve in Ghana and
Nigeria, while the launch of new prod-
ucts such as green and blue bonds in the
latter is a harbinger of increased future
investment activity. As it is, the first 30-
year government bond issued in Nigeria
last year was oversubscribed by 400%.
Meanwhile, both Nigeria and Ghana are
in the process of developing derivatives
markets, though coronavirus may well
knock the timetable off-course.
COUNTRY SCORES West Africa Ghana Ivory Coast Nigeria
Account Management 3.68 3.75 3.89 3.50
Asset Safety 5.32 5.77 6.56 4.25
Asset Servicing 5.46 5.92 6.11 4.67
Cash Management and FX 6.37 6.14 7.00 6.14
Client Service 4.98 5.24 5.17 4.65
Innovation 3.39 3.47 3.47 3.24
Liquidity Management n/a n/a n/a n/a
Pricing 4.11 4.32 3.67 4.25
Regulation and Compliance 5.52 5.64 6.36 4.88
Relationship Management 3.41 3.68 3.69 2.93
Risk Management 4.71 4.88 5.25 4.33
Technology 4.47 4.55 4.55 4.33
Compared to the global average for
ABFM, the region appears to outperform
in the area of cash management and FX
though the statistics should be treated
with caution in that regard as a minority
of respondents opted to rate that catego-
ry. By contrast, relationship management
and account management were areas of
relative vulnerability.
At an individual market level, overall
scores follow relatively similar patterns
with category scores grouped in roughly
equally in the Weak (3.00-3.99), Satis-
factory (4.00-4.99) and Good (5.00-5.99)
ranges. Ivory Coast records a few catego-
ry outliers, notably asset servicing, asset
safety and regulation and compliance,
with at least one global custodian and
one regional insurance giant showing
particular appreciation for service in
these areas.
With the majority of recorded respons-
es for the region, Standard Chartered
receives above average results in most
service categories, slipping only meas-
urably in pricing, with one UK financial
institution marking particularly harshly
for this aspect of the offering.
PROVIDER SCORES
(REGIONAL) West Africa Standard Chartered Bank Versus regional average
Account Management 3.68 3.53 -0.15
Asset Safety 5.32 5.89 0.57
Asset Servicing 5.46 5.83 0.37
Cash Management and FX 6.37 6.65 0.28
Client Service 4.98 5.08 0.10
Innovation 3.39 3.38 -0.02
Liquidity management n/a n/a n/a
Pricing 4.11 3.70 -0.41
Regulation and Compliance 5.52 5.93 0.41
Relationship Management 3.41 3.32 -0.10
Risk Management 4.71 5.00 0.29
Technology 4.47 4.55 0.07
Spring 2020
globalcustodian.com
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