Elias Masilela, chief executive of the Public Investment
Corporation, said the bank, whose chief executive Thierry Tanoh was
ousted by the board on Tuesday, needed to devote as much attention
to governance as to growth.
"The institution grew too fast in a short space of time. They needed
to have taken stock at some point and thought about internal issues
instead of focusing on the expansion program only," he told Reuters
in an interview. "It would seem like the expansion program
Ecobank's board removed Tanoh following months of internal division
after Nigeria's Securities and Exchange Commission (SEC) launched an
investigation into alleged breaches of corporate governance.
The PIC, which has an 18.35 percent stake in the bank, has been a
vocal critic of Tanoh and in a March 1 letter called for his
dismissal to prevent "the death of a pan-African dream".
Masilela said Ecobank needs to stabilize as it emerges from growth
and will face a hard task integrating its investments.
"Until it has stabilized it's very difficult to tell where the risk
areas are, so at this stage we may think it's a leadership problem
and tomorrow it may be something else."
However, despite the recent turmoil, Masilela said the PIC still
considered Ecobank "a very good bank with huge prospects."
"All that we need to do is to nurture it so that it delivers as
expected," he said.
The PIC's investment in Ecobank has given it to exposure to
fast-growing states such as Ivory Coast, Uganda and Zambia as the
fund manager tries to diversify beyond South Africa. Ecobank is
headquartered in Togo and listed in Nigeria and Ghana.
The money manager, the biggest in Africa with 1.4 trillion rand
($130 billion) in assets under management, invests on behalf of
public sector employees. Its top client is the Government Employees
Pension Fund (GEPF), the continent's largest pension fund.
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It has a mandate to invest up to 5 percent of GEPF assets in other
African countries outside South Africa, which Masilela said would
generate new business for local companies and reduce unemployment,
while helping the rest of the continent to grow. However, he said
the PIC still needed to overcome skepticism from some South
"Do South Africans fully understand that? I am not convinced that
they do," he said, adding that some wanted the PIC to focus on the
considerable investment needs at home.
So far, the PIC has deployed half the 5 percent allocation in the
rest of the continent, focusing on private equity, infrastructure
and property investments, given the relatively small and illiquid
markets outside South Africa, Masilela said.
"If you look at the capitalization of stock markets across the
continent put together, they will account for less than 20 percent
of the Johannesburg Stock Exchange," he said. "That says to us you
can't rely on listed investments."
The market capitalization of the JSE, the continent's most active
bourse, is just over 9 trillion rand.
($1 = 10.8 South African Rand)
(Editing by David Evans)
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