Interview with Enoch Osei-Safo Managing Director Ecobank Tanzania

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TanzaniaInvest.com interviewed Enoch Osei-Safo, Managing Director of Ecobank Tanzania. In the interview Mr Osei-Safo shares profound insights on the bank, his strategy for banking in Tanzania and the way forward for banking amidst the finds of natural gas in Tanzania and the country’s growing economy.

TanzaniaInvest.com : Ecobank group is present throughout Africa in 33 countries. Why did you decide to enter Tanzania? What does Tanzania represent in your development strategy?

Enoch Osei-Safo : For Ecobank, Africa is our strategy. As a group, we are emerging from West Africa, expanding systematically into Central Africa, East Africa and then Southern Africa.

Our latest countries are Equitorial Guinea and South Sudan. This is in keeping with our vision of promoting financial inclusion in the African continent by linking different markets to enable access to convenient, reliable and affordable banking services while lowering the cost of cross border trade.

By virtue of its location, Tanzania is uniquely positioned to service over 12 countries in Africa through its sea port – making it an integral part of the EAC and SADC trade infrastructure.

At a time when the banking and finance sector is growing in leaps and bounds in Tanzania, Ecobank is poised to play its role by spearheading the promotion of financial literacy with banking products to enable this emerging market attain its potential in both Africa and the international arena.

TI : Why do you exclude South Africa from the picture?

EOS : South Africa is not excluded. The approach with South Africa is different. South Africa is where our corporate banking Group is headquartered and we also have a flourishing alliance with Nedbank.

All our Middle Africa clients that need to do business in South Africa are offered the Nedbank platform. In return, Nedbank clients in South Africa who have business interests in Middle Africa can leverage the unparallelled network of The Ecobank Group to do business in a seamless manner.

Given the well-established nature of the South African market, it made more sense for us to partner with a strong local player there. So far this has been working remarkably for us.

TI : What is Ecobank focus in Tanzania?

EOS : Ecobank is a full service financial institution focused on the Government sector, SMEs, Multinationals, Consumers, international organizations, State-owned Institutions, NGOs, Regional Companies and Financial Institutions. 

What is unique about Ecobank is how we have successfully translated our ‘cascade approach’ into an efficient client-winning strategy. Assuming we have a regional or multinational company on our radar, typically we will be looking at all the corporate banking needs of that company, which would include investment banking requirements like capital raising or getting listed on the Stock Exchange.

In addition, we offer private banking services to the upper management staff of these companies as well as banking their employees.

Finally, we will also finance the value chain which will include the distributors who sell their products and the local suppliers who provide their raw materials. So in short, we provide a cost-effective one-stop shop for our customers.

For regional or multinational companies, we provide their operations with seamless end-to-end solutions across our network leveraging our contacts, connections and superior understanding and knowledge of the nuances and requirements of the various markets we operate in.

Tanzania as an emerging market attracting high volumes of both local and foreign investment is greatly in need of this synergized service offering and that is the need that Ecobank is responding to.

TI : What are the advantages of using your network?

EOS : We have superior market knowledge, valuable contacts and strong connections thanks to over 20 years of operation across Middle Africa.

We can share with our customers’ our insights regarding opportunities, challenges and constraints in the markets before they even make a move. This is very vital. A lot of businesses enter markets without understanding their nuances and later make costly mistakes. This advice is free of charge.

For companies that plan to enter new countries in Middle Africa, there is a high probability that we may be dealing with their competitors or potential customers already in these markets.

Our unique network which would expand to include Mozambique in the second half of 2013 also enables us to offer cross-border account viewing, end-to-end payment and trade solutions as well as secure collection services.

Overall, our greatest advantage is our ability to integrate our products and services into a compact whole to provide our customers with a one-bank experience even as they move from one country to another. That is why we are the preferred banking gateway to Africa for many individuals, businesses, organizations and companies.

TI : What is your current positioning in the Tanzanian banking market and what are your aims?

EOS : Ecobank Tanzania is doing very well.  Even though we are only 3 years old, we are already a positively thriving player in a market of about 50 banks.

Shorter term, our objective is to systematically expand across Tanzania leveraging multiple and varied channels, namely branches, ATMs, visa cards, mobile banking, internet banking and point of sale terminals.

We currently have 5 branches in Dar es Salaam and an exclusive cash collection centre at the TransAfrica Logistics Limited (TALL) facility. We will open up in Mwanza in March 2013 and follow up with additional branches in Arusha (second quarter) and Mtwara (third quarter).

We have also invested in systems and platforms that would facilitate the provision of seamless end-to-end transactions and solutions for our clients between Tanzania and the other African countries that Ecobank operates. This is our raison d’etre and we see this as an obligation.

TI : In January 2013 you organized the first Pan-African Mobile Money Transfer (MMT) System workshop in Tanzania. Why have you decided to hold this event in Tanzania instead of Kenya where this service was first introduced?

EOS : As a Group, we have successfully launched mobile banking initiatives in 6 African countries including Ghana, Kenya and Zambia. With some 75% of adults in Tanzania having access to mobile phones and 23% of subscribers using mobile financial services actively, Tanzania has reached the point of no return in the MMT safari (journey).{xtypo_quote_right}Tanzania has reached the point of no return in the Mobile Money Transfer journey{/xtypo_quote_right}

As of September 2012, the number of telecoms M-payments registered accounts in Tanzania stood at 32.6 million up from 112,000 in 2008.  Reflecting the strong political will behind MMT initiatives a project in Tanzania has been educating farmers on the features and potential uses of smart phones.

There is also greater competition in the mobile telecom space in Tanzania which boasts of three players. Little wonder that Tanzania ranks number 3 in MMT in Africa behind Kenya and Uganda and with 62% penetration rate arguably has the strongest growth potential.

Holding the event in Tanzania afforded the Group the hands on opportunity to learn and understand the dynamics of the unique Tanzanian market while sharing their diversified experiences in other markets with the local team ahead of our launch later this year.

TI : Does it mean that once you deploy this strategy clients will be able to use mobile banking not only in one of your banking countries but throughout the network.

EOS : Conceivably yes but this depends on the ability of the telecoms to integrate their operations across different countries and will also be subject to the vagaries of local regulation in individual countries.

From our standpoint, this is a question of when and not if and when it happens it will be a game changer. However long it takes, we will be waiting as our unrivalled network makes us the defacto partner for any telecom player with such ambitions.  

TI : There have been vast finding of natural gas in Tanzania. What are your expectations with the inflow of capital and business that is going to come into this region?

EOS : As a Ghanaian, I have seen this happening in my country when we found oil and also in certain communities when gold mining started. As a Group, we have experienced this in multiple countries not least Nigeria.

The natural gas finding has generated more interest in Tanzania which would inevitably translate into increased foreign direct investment over time. 

As a Group with demonstrated commitment to the socioeconomic development of Africa, we see this as an opportunity to lend our experience and insights from other markets to the Tanzanian government in the area of developing a holistic local content agenda. This is very critical!  

TI : Banks in Tanzania, accompany their success with Corporate Social Responsibility. What do you do in this regard?

EOS : Corporate Social Responsibility is very critical for us. We have a strong tradition and track record in all African countries we operate and Tanzania is no exception.

This year we will take Corporate Social Responsibility to another level. We will come up with initiatives and ideas to support ‘financial inclusion’ in a radical but meaningful manner in Tanzania.

TI : You are Ghanaian. From a foreign perspective, where do you see the most interesting economic investment opportunity?

EOS : In fact in Tanzania it is hard to pick and choose because  this country is an economic paradise. How many countries do you know that are blessed with a population of 46 million plus; is surrounded by 8 countries; has a deep water port serving 6 landlocked neighboring countries; and boasts of a beautiful sea coastline of 1.424 km.

{xtypo_quote_left}Tanzania is an economic nirvana{/xtypo_quote_left}Short of saying that Tanzania is an economic nirvana, the country is also blessed with fertile lands for farming, natural resources (gas, gold, tanzanite, etc) and is home to some of the most exotic tourist attractions in the world. Real GDP growth rates have averaged 5-7% in the last decade and is projected to rise to 6-7% in the medium term.

Tanzania is the defacto gateway for trade and business in East Africa similar to how Asia, America, Europe and Australia view the Ecobank Group as the gateway into Africa.

TI : What would be your message to investor that are looking at Tanzania but are not yet here?

EOS :  I would say “pole sana” which means “sorry”, as we are having a good time. But it is not too late to join party – better late than never.  For sure, if you are not in Tanzania then you do not have an informed African strategy.