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Recently-appointed head of research at Ecobank, Edward George, talks to GTR about his ambitions for the bank and some important new research trends in Africa.

GTR: What is the main focus of research at Ecobank at present?

George: We look at the fixed income, currency and commodities (FICC) space. That is the area investment banks in Africa have always had the most exposure to, and that’s where they need our team’s expertise. And we have what we call a ‘Middle Africa’ focus – the area between North Africa and the Rand Zone. Other research teams might be particularly focussed on Lusophone Africa, for example, or they know West Africa well. The thing for us is to look at the whole space and see how it connects.

GTR: What new initiatives are you bringing in as head of research?

George: We are an impressive research unit here and I don’t want to destabilise it in any way. But there are still too many parts of the bank that don’t know about us. Or if they do, they don’t really know how to use research. Most parts of the bank are focussed on their day-to-day budgets and maintaining client relationships.

What I’m working on is a major outreach initiative to the bank’s key business areas. I am in discussions to formalise the research team’s relations with different parts of the bank. The economics research desk, for example, is going to be more closely aligned with treasury, not just advising clients but also advising on the deals. The oil and gas research desk is going to be working more closely with the commercial side of Ecobank in West Africa, advising on deals. The soft commodities desk is going to form an alliance with commodity finance, because we have so much expertise to offer.

The idea is that the research team will play a pivotal role: leading regular briefings on the market, offering recommendations and assisting in putting together deals with all the essential information that is needed. We are trying to create a cohesive environment between all areas of the bank.

GTR: What are the exciting areas of research on the soft commodities side in Africa?

George: The soft commodities desk is very heavily involved in supporting efforts in value chain financing.

The agricultural sector in Africa is very fragmented. It’s naturally disjointed and relatively inefficient, so you must have a strong local presence to get involved in the sector. We are working with companies to try to link together different parts of their value chain: to increase efficiency and reduce risks, ultimately making financing trade easier. I’m thinking particularly of companies like Olam and Export Trading Group (ETG): two companies that are very much ‘farm to fork’. We work with them across Africa: in countries as diverse as Tanzania, Kenya, Ghana and Nigeria. Going forward, this is where we are seeing most of the interest on the soft commodities side of things.

GTR: How important will intra-regional trade in Africa be going forward?

George: One of the most common requests I get is to conduct intra-regional research in various parts of Africa. The bank’s global corporate team has many clients who are involved in several markets in Africa, and we try to knit together their various operations.

A company already operating in Africa is always interested in new markets or new products. They may know Africa well, but perhaps not one particular market or sub-region, and that’s where we can help advise them. Inter-regional trade is one of the biggest drivers of prosperity and economic growth. If Africa sticks to the old model of taking their commodities out of the ground, or off of the tree, and exporting them immediately, African economies will always be side-lined. But there’s vibrant intra-regional trade going on, off the radar, which official figures don’t often capture.

GTR: Will you look to branch out into new areas of research?

George: We want to create a new desk focusing on fast moving consumer goods (FMCG): a major growth area in Africa at the moment.

If you look at the purchasing power across Africa what a lot of the world’s major sellers of FMCGs don’t realise is that the moment people get out of what is called ‘extreme poverty’ and have a small amount of disposable income, they don’t just buy the cheapest products. Like consumers in developed markets, they want the highest quality products, and they will save up if they have to.

There’s an emerging consumer class that’s just above the poverty line and there are many companies looking to sell high-quality products to the African market. The new research desk will help to advise those companies looking to expand in the area.

GTR: Do you foresee many challenges?

George: Doing business in different parts of Africa is so disjointed – in terms of legal systems, tax regimes, communications, etc. So to knit together 35 African countries into one bank is quite a challenge. It’s our job in research to reach out and formalise the networks between different parts of the bank. We already have about 100 key people we regularly engage with in the bank, but I want to increase that substantially.