Largest Kenya Bank to Set Up UAE Office to Capture Capital Flows

James Mwangi, chief executive officer of Equity Group. Photo by Chris Ratcliffe /Photographer: Chris Ratcliffe/Bl

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(Bloomberg) — Equity Group Holdings Plc, Kenya’s largest lender, plans to open an office in the United Arab Emirates in the fourth quarter to benefit from growing trade and investment between the Middle East and Africa.

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The lender is going though “final phases” of obtaining regulatory approvals, Equity Group Chief Executive Officer James Mwangi said. 

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Equity will join African rivals including Absa Group Ltd., Standard Bank Group Ltd. and United Bank for Africa Plc, which are either expanding into or already operating in the Middle East. The firms aim to tap investors from the Middle East searching for deals in the world’s second-largest continent – home to minerals critical for the transition to cleaner energy, and vast tracts of arable land that could produce grains and other food items. 

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“The Middle East has deep capital sources, very strong logistics for trade and it is a strong center for investment,” Mwangi said in an interview with Bloomberg TV. “Linkage with the middle-income segment is growing in India and China. That will provide a very strong market wave for African goods and services.”

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In South Africa, Saudi Arabia’s Zahid Group along with other investors are in talks to buy Barloworld Ltd., the African distributor of Caterpillar Inc. equipment, while Abu Dhabi’s Adnoc and Saudi Arabia’s Aramco are bidding for Shell Plc’s downstream assets in the continent’s most-developed nation, Bloomberg previously reported. 

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The deals are keeping bankers busy, Citigroup Inc.s’s head of African markets George Asante said in December.

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Investment from the US is also on the rise mainly in the critical minerals sector, Asante said. During the first six months of 2024, the US government facilitated more than 400 deals valued at $32.5 billion, according to the data by Prosper Africa.

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Still, political risk — such as the strife in gas-rich Mozambique — could deter some investors. The detention of foreign executives in Nigeria and Mali are other concerns for companies. 

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The continent also faces an annual financing gap estimated at about $402 billion, which is needed to “fast-track its structural transformation and catch up with high-performing developing countries from other regions,” according to the African Development Bank.

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