After a North African GDP growth which reached 2010% in 3.8, expectations for 2011 of the countries involved in the Arab spring season are of modest growth for Tunisia (+0% compared to +3.1% in 2010) and Egypt (+1.2% compared to +5.1% in 2010), as well as a double-digit drop for Libya. Algeria and Morocco, less impacted by the revolutionary movement, should settle on a growth of about 4% in line with 2010.
These are the first assessments that emerged from one study carried out by the Research Area of Banca Monte dei Paschi di Siena through which the impact that the political turmoil has had on the local banking systems was analyzed and how the banking process.
Un strong negative impact was also recorded in a strategic sector for the area such as tourism, which represents about 10% of GDP for Egypt and Tunisia, and which has seen arrivals drop by 40% since the beginning of the year for Egypt and more significantly for Tunisia. North African government CDSs (credit default swaps) returned to their highest levels since the beginning of the year, not only due to political tensions, but also due to the significant weakening of public finances with the deficit-to-GDP ratio rising sharply in 2011.
The process of banking North Africa – The number of banks, present in each country of North Africa, also varies according to the forms of government; in some cases the influence of the state in the banking system is significant, so much so that most of them are public or private banks with large public shareholdings. Just think that public control varies from 27% of bank assets in Morocco to 85% in Algeria. Egypt is the country with the highest number of banks, 39; followed by Morocco with 26 credit institutions, finally Algeria and Tunisia both have 21 banks.
Among the best 50 banks on the continent, the weight of the North African banking system, in terms of assets, is significant and corresponds to more than 350 billion dollars, about 35% of the total. Egypt, due to the structure of its banking system and the leading position it occupies in North Africa, contributes to the performance of the top 50 with 22 banks and a percentage of assets on the continent's total of around 30%. Morocco, Algeria and Libya contribute 24%, 15% and 11% respectively; Tunisia, despite having a large number of banks, has assets of 27 billion, clearly lower than the 3 previous countries, representing 7% of the total; this shows that the best Tunisian banks do not have an accounting size comparable to that of the surrounding countries.
To understand the effective extension of the banking system, it is not enough to consider only the number of banks present in a country but it is also important to examine the trend in bank density, i.e. the distribution of banks for each individual country with respect to inhabitants.
In 2009, Egypt recorded the highest banking density in the area, with 22 branches per 100.000 inhabitants. Morocco and Tunisia, with 19 and 15 branches respectively, remained at values approximately close to the Egyptian one; the exception is Algeria, which has a density two-thirds lower than that of Tunisia, despite both having the same number of banks. An essential comparison, to evaluate the development of the North African banking system, must be made with the EU average, equal to 42, indicative of the fact that the European banking panoramas are far more evolved, ramified and well distributed.
The poor banking system on the African continent is undoubtedly related to the limited diffusion of bank branches, just think that Ethiopia has one branch for every 100.000 inhabitants while Spain has 96 branches for every 100.000 inhabitants. local banks, to bring the African population closer to the banking worldhave adopted different strategies.
Le prefabricated mobile branches powered by solar energy, for example, have made it possible to overcome the problem (highlighted by a recent survey conducted by the UN and CGAP in South Africa) of the distance between banks and potential 'customers', allowing alternative payments to cash in the most remote areas of the country .
However, building branch networks is highly costly as a result the best solution for the African continent seems to be mobile banking which allows you to use mobile phones to make payments, thus making money transfers, a low-cost service that uses a highly widespread medium (launched by Vodafone and Safaricom in 2006 and currently used by four million Kenyans). Suffice it to say that in 1996 the number of mobile phones in Africa amounted to just one million, currently there are 278 million.
Islamic Finance and North Africa – The penetration of Islamic finance in the countries of North Africa, contrary to what one might think, is currently very limited. Only 4.9% of financial assets in Egypt are related to Islamic finance, just 2.2% in Tunisia and 1.1% in Algeria. There are no Islamic banks in Morocco and Libya. This data contrasts with 100% in Iran, 61% in the Gulf countries and 30% in Malaysia.
There are many reasons for the delay in the development of Islamic finance in the countries of North Africa. In general, the legislation on Islamic banking products is absent or insufficient. In North African countries, banking regulations do not distinguish between conventional and Islamic finance as regards financial reporting, capital ratios and liquidity regulation, resulting in a clear competitive disadvantage for Sharia Compliant banks that have a different business model. It should also be underlined that the success of sharia compliant products, where present in North Africa, is limited at the moment as evidenced by a 2010 United Nations report. Even the attention of the press for this type of product is decidedly lower in the countries of North Africa compared to the Gulf countries.
