Be Your 'Authentic Self' at  Couche-Tard’s Global Stores

Inclusion and diversity for employees has been taken to new lengths by a company that has its heart in the right place.

Canadian multinational Alimentation Couche-Tard (ACT) has evolved into a global leader in convenience stores and mobility.

With 122,000 team members across 24 countries and territories, the company takes pride in representing a spread of cultures, races, genders, and minority groups. ACT continues its diversity and inclusion journey across the organisation, embracing it at all levels, from store staff to top management. The company strives to be an inclusive and attractive employer, providing a work environment where people feel safe, respected, and able to “bring their authentic selves to work” every day.

The company’s wholesome efforts began in earnest in 2019, with the formation of its first business resource group, the Women's Council, to provide "winning conditions" for female employees. Today, the company has seven active business resource groups for race, LGBTQ+, disabilities, ethnic diversity, and, most recently, military veterans and their family members.

"Alimentation Couche-Tard is committed to creating pipelines that bring more diverse groups into its management structure."

In March 2020, Alimentation Couche-Tard (ACT) president and chief executive Brian Hannasch signed the CEO Action pledge, joining a coalition of leaders working to advance fairness and inclusion in the workplace. When Hannasch signed up for this commitment, Alimentation Couche-Tard became the first convenience store retailer to join the movement — and demonstrate its commitment to the cause.

From there, the company began bold conversations across the organisation to listen, learn, and take meaningful action. This included training, across the business, on unconscious bias and the sharing of experiences, with town halls, internal communications, surveys, and personal conversations with top leadership.

Inspired by a "One Team" culture — putting its people and its customers first — ACT has won high praise and recognition. It was named as Best Convenience Store Diversity & Inclusion Employer (Global) 2022 by the CFI judging panel — and it took the Gallup Exceptional Workplace Award in the same year.

"To be recognised ... among such prestigious global honourees is a proud moment for ACT," said Hannasch. "Protecting and promoting ACT's winning culture is a top priority for us, and we have worked together as one team to create a highly engaged workforce and company that has only become better and stronger through the challenges of recent years."

Alimentation Couche-Tard is committed to creating pipelines that bring more diverse groups into its management structure. This includes internal training programmes for managers, directors, and emerging leaders, as well as industry association-sponsored minority training programmes exploring ways that under-represented groups can gain crucial tools and education to advance their careers — and grow with the company.


Social Activist-Turned-Chief Executive: Leader Showing True Commitment to  Worthy Causes — and to Brazil’s People

CAIXA’s Maria Rita Serrano understands challenge and inequality, and strives to overcome both.

Brazil is currently facing major political and economic challenges — and CAIXA has the tools to tackle those issues.

[caption id="attachment_25299" align="aligncenter" width="900"] CEO: Maria Rita Serrano[/caption]

At the head of the bank is CEO Maria Rita Serrano, whose career has been marked by challenges met, and overcome. Reinstating CAIXA as a fundamental axis for the country’s sustainable development is her life’s mission.

“I had the honour and joy, after 33 years of a career ardently defending CAIXA, of being invited to chair it,” she explains. “I come from a humble and hard-working family, I am a woman, a social and union activist, and I was the elected representative of the bank's employees in its board.

“It is not the common trajectory of a CEO of a financial institution in Brazil. But this bold choice by President Lula (Luiz Inácio Lula da Silva) fills me with hope of working to improve the lives of Brazilians.”

CAIXA is a vital national institution, especially in its role of managing public policies for the federal government. With 162 years behind it, the bank was born stirring the dreams of ordinary Brazilians. It was in CAIXA that enslaved people could deposit savings to buy their writ of emancipation.

Serrano knows this story in all its depth and nuance, and one of her goals is to keep CAIXA on this path by keeping it a state-owned company focused on socio-economic development.

“During the pandemic, CAIXA employees served half of the Brazilian population,” she says. “CAIXA is a company that excels. This is the bank that has resisted the dismantling of public assets in recent years ... and it resisted thanks to the effort and commitment of its employees.”

During the military dictatorship, Maria Rita Serrano became an activist for social causes. Back in 1982, her concern was for unemployment, inequality, lack of opportunity, and the misery of a large part of the Brazilian population. Serrano, a trade unionist and the first president of the Bank Workers’ Union in the region known as ABC Paulista, joined CAIXA in 1989. She faced discrimination and understood the need for change in decision-making spaces. In Brazil, only 12 percent of board positions are held by women.

In 2016, she ran as employee representative to the CAIXA board of directors; she was elected and invested in 2017. In 2019, she was re-elected with 82 percent of the votes. In 2002, she was voted in for a third term — this time with a 91 percent majority.

Serrano has published several books. In 2018, she launched Caixa, Banco dos Brasileiros, which recounts the centennial history of the bank. Recently, she published Rompendo Barreiras, on her life trajectory and activism in defence of public assets, and the challenges for women in positions of power.

Born in Santo André, São Paulo, Maria Rita Serrano graduated in Social Studies and History, with a Master's degree in Business Administration from the University of São Caetano do Sul (USCS).


A Country Reborn,  Held Close by a Caring and Compassionate Bank

As Brazil exits an oppressive regime, CAIXA is there to ease the transition to inclusion and protection for people and planet.

CAIXA Econômica Federal has a wholesome raison d’etre: to promote a fraternal, just, and egalitarian society that conserves and values Brazil’s environmental, cultural, and social heritage.

The country holds the lion’s share of the planet’s natural wealth, which puts it in a position to lead solutions to the climate emergency and environmental destruction.

And CAIXA cannot — and will not — act or make a decision without considering the sustainability agenda. The solid, historical institution is fundamental to the financial system in Brazil.

CAIXA is the main executor of public policies and works with the federal government to promote sustainable development, with a focus on collective wellbeing. CAIXA resumes its historical role by focusing on public policies, products and services which will return Brazil to its leading position on the global stage. It focuses on issues related to sustainability, job creation, sustainable housing, infrastructure, agriculture, energy transition, and the promotion of citizenship and dialogue.

The bank maintains and establishes relations with national and international partners with technical capabilities and financial resources that can accelerate the implementation of this agenda. Some actions are on the immediate horizon.

CAIXA's accreditation with the Green Climate Fund, a global investment platform created to support developing countries to meet their goals in the Paris Agreement, will be resumed. The bank provides public support with grants from the CAIXA socio-environmental fund to generate female-focused employment and income, promote the bioeconomy and local production arrangements, and protect vulnerable groups.

With transparency as a guiding force, the bank defines and communicates its institutional commitments and goals so that the public can contribute to, monitor, and measure progress.

"A new CAIXA has been born, for a new Brazil — with a spirited commitment to rebuilding the country and improving quality of life."

With its double identity of bank and state entity, CAIXA plays a fundamental role for the nation’s development. As CEO Maria Rita Serrano points out: “Financial intermediation should serve the economy to foster production, services, jobs and improve the lives of the population ... (and) the work of state-owned banks is fundamental. State investments can be factors of economic, employment, and income stabilisation, always with sustainability and the neediest people in mind.”

CAIXA has some 4,200 branches staffed by 86,000 employees across the country, as well as 13,000 lottery outlets garnered during its 162 years of history. It overcame recent management turmoil with solid governance, credibility, and the commitment of its family of employees. Anchored on these assets, CAIXA will expand its financial instruments to reduce inequalities and poverty while preserving ecosystems and biodiversity.

A new CAIXA has been born, for a new Brazil — with a spirited commitment to rebuilding the country and improving quality of life. The reorganisation allows the bank to excel in managing the government's income transfer programmes. It is expanding partnerships with states and municipalities to develop infrastructure projects while promoting financial inclusion, advancing technology to improve customer service and care, and balancing commercial operations to invest in cultural projects. There is an ongoing focus on labour relations and the social and natural diversity of Brazil.

Recently, the world has been appalled at the vulnerability and neglect of indigenous peoples of the Amazon. Yanomami populations were left in an atmosphere of destruction and neglect that was aggravated by the pandemic and the Jair Bolsonaro administration that encouraged the invasion of their lands.

CAIXA immediately implemented policies to support the affected people, and sent a “truck branch” to serve 30,000 families in the states of Amazonas and Roraima. The actions will give indigenous people access to federal government benefits, and the support of CAIXA.

The truck branch reaches isolated regions affected by climate catastrophe or in vulnerable situations. In addition to the trucks, CAIXA also has six boat branches that travel the waters of the Amazon.

These are examples of how a state-owned bank can make a difference with more than financial support. Combining governance, credibility, and responsibility, public banks such as CAIXA can do for the Brazilian population what some financial entities are not willing to do. It represents the sustainable arm of the state in the financial market, making a real difference to the lives of the population.

And this is just the beginning. Aligned with the agenda of the reborn Brazilian state, CAIXA will drive social transformation, where natural capital is valued as a strategic asset for the country — and the world.


Constant Improvement, Constant Investment — a Simple Recipe for Banking Success and Recognition

Dedication to good governance and a philosophy of community service have stood Afghanistan International Bank (AIB) in good stead — and led to multiple awards over the years.

Since its launch in 2004, Afghanistan International Bank (AIB) has been proudly providing essential financial services to the local population — while meeting, or exceeding, international governance standards.

Outstanding governance has led humanitarian agencies to select AIB as fulcrum for the distribution of critical aid.

In a region where normal operations can be challenging, that focus on governance is vitally important to the bank — and, by extension, to the Afghan economy.

[caption id="attachment_25307" align="aligncenter" width="900"] CEO: Joesph Carasso Jr[/caption]

This philosophy and the resulting achievements have not gone unnoticed — AIB has won nine consecutive CFI awards, the most recent for Best Corporate Governance (Afghanistan) 2022. That translates to a win for every year that the award has been contested.

Afghanistan International Bank (AIB)is one of the country’s leading financial institutions for profitability, liquidity and assets, with a well-earned reputation for trustworthiness and a culture of compliance.

It has consistently supported the Afghan economy and provided banking services throughout the global disruptions of recent years. AIB is the only domestic bank with US Dollar-clearing through a recognised international bank, making it a vital conduit for global financial flows.

AIB’s strong liquidity position has taken it to an elevated position in the international banking community, and its positive actions have won it the respect of regulators. This status has helped AIB to maintain healthy external business relationships.

Its focus on risk-management, money-laundering awareness, cybersecurity, financial crime compliance measures and Know-your-Customer (KYC) practices has made AIB an outstanding operation in the region.

Investment in technology was crucial to that success. AIB’s banking system is hosted on advanced software from Oracle, making it one of the few banks – even in developed nations – to use the latest incarnation of the software.

[caption id="attachment_25308" align="alignright" width="300"] The Bank's headquarters in Kabul[/caption]

Afghanistan International Bank (AIB) has integrated the latest financial crime- compliance management (FCCM) technology — it is currently moving to the most recent version — and its KYC and AML (anti-money laundering) protocols are constantly updated.

The AIB board closely monitors AML and compliance, meeting monthly to ensure total compliance with the policies and procedures established and approved by external experts.

AIB’s Learning Management System (LMS) enables all employees to review AML content, and take online tests to keep their compliance knowledge up-to-date.

On the cybersecurity front, AIB holds the most thorough security certifications of any bank in Afghanistan. The bank makes constant upgrades to its cybersecurity systems to ensure readiness with the latest standards and practices, and to ensure its network is well-defended from unwanted traffic and security breaches.
An FTI Consulting review in 2022 described AIB as having a “culture of compliance” that had progressed the program from both the perspective of local Afghan requirements and US BSA standards.

AIB assesses AML and compliance against stringent international standards to ensure excellence. AIB’s compliance operations represent a broad section of the bank’s identity, comprising almost 10 percent of its employees.

The bank’s strategy is to make continual improvements and investments to ensure AIB remains a positive ambassador for the Afghan banking sector.


Prospect Capital Management: History of Innovation at Leading Asset Manager

For 35 years, Prospect Capital Management, along with its predecessors, has established a history of innovation across its private and public fund management business.

The firm’s founders launched Prospect with creative ideas, a large network of relationships, a drive to succeed, and the courage to put their savings at risk, with the firm continuing with such attributes today.

Prospect invests across the United States in diversified portfolios by industry, company, strategy, and situation. The firm’s core investment strategies include middle-market lending, middle-market buyouts, structured credit, and real estate.

Prospect Capital Management focuses on generating value for its investors, portfolio companies, private equity sponsor relationships, and employees through creativity, rigor, perseverance, integrity, and teamwork. Prospect’s objectives include preserving capital by making private credit and private equity investments at reasonable multiples of recurring cash flow, earning attractive current cash yields and long-term capital appreciation, and achieving consistent low-volatility returns.

The firm has persevered over the course of multiple economic cycles and has developed many industry-leading innovations over its long history, including achieving:

The first and only multi-line business development company (BDC).

The first non-traded closed end fund focused on investments in collateralized loan obligations (CLOs).

The first and only BDC with a significant real estate business.

The first (and in many cases only) BDC to issue medium-term notes, convertible notes, at-the-market issuance programs, non-traded perpetual preferred stock, and traded perpetual preferred stock.

The first investment grade credit rating for a BDC after the Great Financial Crisis.

The first and only BDC with five investment grade credit ratings.

The first BDC acquisition (of Patriot Capital) in December 2009.

Because of Prospect’s achievement of the above and other results, investors have gravitated to Prospect’s long-term expertise, track record and history of innovation. The firm has grown to over 100 employees and $8.8 bn of regulatory assets under management as of year-end 2022. Prospect Capital Management has invested in nearly 1,000 companies across liquid and private businesses with a network of private equity sponsors, management teams, and market participants that inform its investment process.

Prospect Capital Management is currently offering two investment opportunities to retail investors:

Preferred Stock in Prospect Capital Corporation, a publicly traded BDC. The preferred stock currently has a 6.5 percent per annum dividend rate paid monthly.

Common Stock in Priority Income Fund, a closed-end fund. The Common Stock currently has an 11.0 percent per annum dividend rate paid monthly and covered over 150 percent by net investment income.

Prospect firmly believes there is no greater alignment of interest than for management to invest alongside its shareholders on the same terms. Prospect’s team and employees own approximately $1.1 bn of its funds under management.

With its experienced team, disciplined investment approach developed over more than three decades, and commitment to transparency and governance, Prospect Capital Management is well-positioned to capitalise on market opportunities ahead.


Abu Dhabi Cements City’s Position at  Global Market Forefront

CFI.co in conversation with Dhaher Bin Dhaher Al Mheiri, Chief Executive Officer of Abu Dhabi Global Market Authority.

[caption id="attachment_25289" align="alignright" width="300"] CEO of Abu Dhabi Global Market (ADGM): Dhaher Bin Dhaher Al Mheiri[/caption]

Abu Dhabi Global Market (ADGM) is the international financial centre of Abu Dhabi, operating within an international regulatory framework based on the direct application of the English Common Law and governs Al Maryah Island which is designated as the financial free zone of Abu Dhabi, the capital of the United Arab Emirates.

ADGM augments Abu Dhabi’s position as a leading financial centre and a business hub serving as a strategic link between the growing economies of the Middle East, Africa and South Asia and the rest of the world.

What sets ADGM apart from its competitors?

As the leading international financial centre of the capital city of the United Arab Emirates, ADGM stands as the destination of choice to accelerate business opportunities and foster economic growth. We have pioneered a progressive regulatory framework. We bring value to the UAE’s market and the broader region through our vibrant ecosystem. It comprises an independent jurisdiction with internationally recognised laws that harnesses transformational economic opportunities and facilitates a robust and transparent hub for the global financial industry.

ADGM is ideally placed for investments and growth via a clear focus on new clusters that complement traditional and new-age finance simultaneously. It is the first IFC in the MENA region to introduce a fully-fledged but evolving, digital asset regulatory framework. It is also home to leading global players in cryptocurrency, multilateral trading facilities, and blockchain.

By enabling professional service providers with global reach, ADGM has attracted Investors from around the world and built a strong international clientele.

The unique positioning of the IFC serves as an East-West gateway and benefits from Abu Dhabi’s global connectivity as the nexus of three continents. Eighty percent of the world’s population is within an eight-hour flight from Abu Dhabi, and 33 percent live within four hours.

ADGM is the catalyst that showcases Abu Dhabi as the prime destination to access capital and generate growth. It showcases the global appeal of the capital and supports the diversification of Abu Dhabi’s overall economy.

What is your personal view on the key strengths that ADGM?

We have seen seven years in operations and each year has been a milestone, bringing growth for the associated people and stakeholders. It is encouraging to see the progress and achievements of ADGM, its authorities – the RA, FSRA, ADGM Courts and its “knowledge-arm” – ADGM Academy.

The authorities of ADGM are the pillars of the ecosystems and various frameworks that exist within the organisation.

ADGM has showcased substantial growth by working on key focus areas while Paving the way ahead and maintaining momentum. There has been widespread recognition of Abu Dhabi as the ‘capital of capital’ with the presence of top global sovereign wealth funds (SWFs), venture capitalists and investment firms.

As a digital-first business enabler and custodian of Abu Dhabi’s financial sector, ADGM is committed to the development of a sustainable, innovative, and knowledge-based economy.

What are ADGM’s plans and goals for the next two to three years?

ADGM is enhancing its services across sectors including governing foundations and family businesses. It will continue to grow its network of international partners to leverage synergies with jurisdictions around the world.

The Cluster Strategy adopted last year brings together disparate corporate banking businesses and services underneath a single umbrella, encompassing the entirety of corporate banking activities such as treasury and trade finance.

The strategy has created 13 specialised Clusters, each representing its ecosystem of expertise, networks and opportunities for business development. Clusters under development include asset management and sustainable finance, strengthening Abu Dhabi’s position as the international financial hub and building a diversified knowledge-based economy.

We have already started bolstering our guidelines and framework around sustainable finance and ESG, charting the path to COP28, which is due to take place this year. ADGM’s FSRA has introduced enhancements to the capital market with a focus on environmental instruments. A recently concluded consultation paper on a comprehensive sustainable finance regulatory framework covers rules on sustainability-orientated investment funds, managed portfolios and bonds as well as environmental disclosures by large ADGM companies. When published in the coming months, the sustainable finance and ESG framework will be the first of its kind in the Middle East, Africa and South Asia (MEASA) region.

We will continue to foster cross-border collaboration with like-minded partners in other regions, an essential strategic focus for ADGM in delivering bilateral opportunities for inward investment and nurturing a sound and sustainable global financial system. Developments in the next few years will cement this strategic impetus.


Invest Africa:   Six Reasons to Choose Ghana

[caption id="attachment_25180" align="alignright" width="300"] CEO: Yofi Grant[/caption]

Being a top-rated country for almost everything — from cost of doing business to airport services — Ghana has a lot going for it.

As the world gradually emerges from the pandemic and economic recession, the search is on for the next global commerce hotspot.

Emerging markets in Africa, Latin America and the Middle East are being sized-up as possible new engines of economic growth. Amid the heated debates and ponderings, the case for Africa is stronger than ever. The continent keeps exhibiting strong indications of a significant take-off — and soon. Africa is the second-largest continent in terms of area and population, has a wealth of untapped natural resources, enormous potential for sustainable agriculture — and it benefits from the Africa Continental Free Trade Area (AfCFTA), the largest free market in the world

With this ongoing economic revival, Ghana has established itself as a nation to watch for trade, investment, and tourism. It combines a conducive business climate, transparent regulations and political stability to make it one of the most favourable economic environments for investors.

If you have ever wondered why the country has taken centre-stage in discussions on investment, here are six reasons.

Stable Democratic Climate
Ghana is ranked as the most stable political environment in West Africa, with advanced democratic institutions and systems that ensure good governance and the rule of law. The Global Peace Index rates the country as first in West Africa, and second in all of Africa.

Ghana's political stability can be attributed to strong and transparent democratic institutions, which have made it a beacon of hope for the West African region. This reliable democratic dispensation makes it the safest place in the subregion.

Strong Resource Pool
Ghana is resource-rich, with an enormous pool of untapped raw materials for investors to leverage — especially now.

The country is Africa’s number one gold-producer, and the world’s second-largest cocoa producer. It has the third-largest bauxite reserves in Africa, an estimated reserve base of 900 million tonnes, valued at $50 million in its raw state — and $400bn once refined.

With five million hectares of arable land, four million of cultivable land, and 228,792 hectares of irrigable land, there is more economic potential in addition to the 189,000 barrels of oil produced daily, and the eight trillion cubic feet of natural gas reserves.

Ease of doing business
Ghana’s progressive policies, including its vision to transform the country into an industrialised nation by 2030, have been instrumental in creating a business-friendly environment.

According to the Ease of Doing Business Reports, Ghana is among the best spots in West Africa. In 2021, the AT Kearney Global Services Location Index judged Ghana to be the best West African destination for investment — and the third-most attractive on the continent. Ghana is regarded as one of the most competitive economies in the region by the World Economic Forum Global Competitiveness Index.

Accessibility
With an average flight time to Europe and the Americas of eight hours, Ghana is (according to the World Population Review) geographically the country closest to the “centre” of the globe.

Therefore investors looking to export to, or access, markets in the Americas, Asia and Europe will find Ghana a prime location with its unique geographical situation.

Investors have easy access to the rest of the world through Ghana's main airport, Kotoka International — again ranked the best in Africa for service. Tema Port, one of the largest regional ports, is in Ghana — sustained by an excellent network of trunk highways.

Competitive Labour Force
Businesses in Ghana can select from a wide pool of skilled and/or trainable workers. The country has one of the highest literacy rates in West Africa (according to the World Bank Group), as well as the most competitive minimum wages in the sub-region. For businesses looking to set up in Ghana, this ensures a low cost of production and a skilled and accessible workforce.

Headquarters of AfCFTA
As an emerging economy playing a central role in Africa’s Free Trade Area Agreement and hosting its secretariat, Ghana is in pole position to work with investors and make it easier for them to access products and services from a continent-wide market of 1.3 billion people.

Headquartering the AfCFTA is expected to boost Ghana’s hospitality, and more broadly, the services sectors, and generate increased international exposure. This heightened visibility and increasing investments will further stimulate trade, creating opportunities for Ghanaian businesses, as well as entrepreneurs looking for access to the African market.

Budding Commercial Hub

Ghana is becoming a regional powerhouse in commerce, adopting policies to reduce the general cost of doing business and incentivise investment.

The country is a hub that connects businesses and investors to Africa as a whole. The government’s investment promotion wing, GIPC, plays a pivotal role in helping investors navigate Ghana’s business environment by providing them with insights on opportunities and incentives. It follows through with guidelines and assistance to help manage business risks and challenges.

Ghana has created a positive, go-ahead business environment that allows domestic and international investors to capitalise on opportunities.

In-depth Investment Advice and Expertise on-tap: Commitment Guaranteed

Exciting African opportunities are to be sniffed-out, not sniffed-at — and Ghana has some rich pickings...

The Ghana Investment Promotion Centre plays a pivotal role in helping international investors discover one of the African continent’s under-sung financial hotspots.

From establishing and maintaining liaison with ministries, government departments and agencies to navigating local hurdles, legal requirements and incentives, the GIPC takes its advisory role seriously — as does the man at the top.

Chief executive Reginald Yofi Grant draws on three decades of experience in investment banking and finance. He heads the Ghana Investment Promotion Centre, under the Office of the President of Ghana. In his role as CEO of GIPC, Grant oversees the development of a slick and conducive investment climate for those twigging to the vast possibilities offered by Ghana.

Yofi Grant is director for Sub-Saharan Africa on the World Association of Investment Promotion Agencies (WAIPA) steering board. He collaborates with partners to address some of the world's most pressing issues, promoting investment and open, free trade and attracting FDI.

He is widely recognised in financial spheres and has co-founded several companies, including Grant Dupuis Investment Ltd and Praxis Fortune Caliber. Yofi Grant is equally renowned as a leader and financial policy adviser, at home in Ghana and abroad. He’s led several advisory mandates for equity and debt transactions, and developed and implemented one of the largest agriculture funds in Sub-Saharan Africa, the AAF SME Fund LLC.

Yofi Grant has been recognised for his efforts in the financial sector — and the way in which he conducts himself. He has received awards — including Best Business Personality of the Year for Africa — and has been featured in The Washington Post, The Economist, and Forbes Africa. Under his direction, the GIPC has won recognition as best IPA in West and Central Africa — for four consecutive years — by AIM Global.

As a council member of the Continental Business Network of the African Union and a member of the board of trustees of the OACP Endowment and Trust Fund, he remains passionately committed to shaping the continent's financial and economic transformation.

Reginald Yofi Grant is a fellow of the Aspen Global Leadership Network (AGLN).


A Tunisian Transformation: BIAT is Driven by Civic Duty, Concern for the Planet, and Prudent Risk-Avoidance

Banque Internationale Arabe de Tunisie implements strategic projects and initiatives — and meets with enviable success

BIAT’s financial performance attests to many positive things: the development dynamics of its strategic projects, its prudent risk-management policy, its cost control, its governance — and the ongoing commitment of its people.

The solid and resilient Tunisian financial institution has been able to maintain a growth trajectory in all its business lines. By taking advantage of technological advances, and with social responsibility at the heart of its strategy, BIAT consistently aims for dynamic but sustainable growth.

The bank's governance system is constantly updated to align it with organisational changes and international best-practice. The result is efficient management and optimal operation while staying on the path to healthy and secure growth.

The transformation of the BIAT business lines has come about through the reorganisation of its corporate- and investment-banking activities. A new trading room has been set up, enabling the bank to broaden its range of financial products and services — and better support its clients. The trading room meets international standards, and — thanks to specialised talent, state-of-the-art tech, and a modern layout — helps BIAT clients by analysing their needs and proposing tailored solutions.

BIAT has been steadily implementing its digital transformation project, which is bearing fruit in terms of customer engagement and product innovation. New functionalities are constantly deployed with the aim of becoming the “benchmark digital bank”.

As a responsible and civic-minded institution, BIAT places great importance on the strength of its societal commitments. It is only too aware of the importance of environmental issues in the development of a sustainable future, and has doubled down on that by joining the Africa Business Leaders Coalition. The initiative involves signing a climate statement to reaffirm an ongoing commitment to society, the economy, and the environment. BIAT has renewed its partnership with coastline and marine protection association La Saison Bleue. The BIAT Foundation, meanwhile, has undertaken the challenge of rehabilitating the Belvedere botanical gardens in Tunis.

BIAT is strong, as well as kind: it made it into the Top 100 African banks list published by African Business in 2022. It ranks first in the Tunisian banking system, and 38th in the whole of Africa — a jump of 12 places over the previous year.

Banque Internationale Arabe de Tunisie prides itself on being a solid and responsible organisation at the forefront of dynamic development. It maintains a focus on digital transformation and social responsibility, and attracts some of the world’s best experts to help it to promote responsible and sustainable growth.


Doors Closing: Mind the EU Gender Pay Gap

Transparency directive introduced to ensure fair pay between the sexes

Women in the EU continue to be paid less on average than their male colleagues and counterparts. Even in the same sector, the discrepancy exists — and most of the time it goes under the radar, because wages are seldom publicly visible.

This is about to change. The new EU Pay Transparency Directive obliges companies to disclose wage rates to uncover, and then close, the gender pay gap.

On March30, the EU Parliament adopted directives to challenge the inequality. New regulations enforce transparency, and all company salaries must be disclosed to allow workers to compare rates and identify differences.

In the EU, women earn on average 13 percent less than men per hour. And the pay gap varies greatly from country to country: while it is less than four percent in Slovenia, Romania and Luxembourg, it hits 22 percent in Estonia and Latvia. Austria and Germany aren’t far behind, with 18.9 and 18.1 percent respectively.

Structural Causes

Women are more often employed part-time and do unpaid care work; they are also less likely to hold management positions. Female-dominated professions such as nursing are also more poorly paid. But even disregarding these structural causes, the gap remains. In Germany, for example, women in the same industry, with comparable qualifications, earn salaries on average six percent lower.

From now on, companies with more than 100 employees must disclose salaries, and the pay gap is to be closed with transparency guidelines. All salaries must be disclosed, and any gap of more than five percent must come with a solution for equality.

The EU Pay Transparency guidelines prohibit recruiters from asking applicants about their current salary. This is enforced to prevent salary discrepancies from arising in the first place. Social partners are to play an increased role in enforcing the guidelines.

Companies that do not comply will be fined. This, says the chief negotiator of the S&D group, Evelyn Regner, is the only way to ensure compliance.

Transparency is Crucial

Regner — a member of the Committee on Women’s Rights and Gender Equality and vice-president of the European Parliament — identifies the crucial importance of transparency. “Without it, it is simply impossible to take action against wage discrimination,” she says. “With the new EU rules, workers, and women in particular, will be better equipped to assert their right to equal pay.”

According to Regner, all workers will be able to share information about their pay, internally and externally. This means an effective ban on non-disclosure clauses, and ensures that women don’t have to go to court to prove discrimination. The onus is on companies to prove the opposite.

Wage discrimination is a systematic problem, not an individual one. It should also be tackled systematically.


Daily Challenges of a Matchmaker: Linking the Benevolent with the World’s Most Deserving Projects

Club10mPlus is a London-based investment club seeking ethical investors for projects that benefit people and planet — and Relationship Director Christa Atwood is the matchmaker in the middle.

“We find projects and then we find investors. Our core business is brokering. I build relationships with amazing people around the world.” This is Club10mPlus’s second year of operation as a finance marketing company, and a promising one — though not without challenges.

In the current economic climate, where are the investors coming from? “Well, it would be nice if we had some venture capitalists who had the same ethos (as us),” Atwood says. “That would be amazing.” But, she adds, it’s unusual. “I’ve yet to find one that I’m very comfortable with: their past taints their future, in my mind. They can be quite ruthless. But we’re open to all types of investors, as long as they align with our clients.”

Atwood and CEO Gary Elliott team up with two office staff and a brace of “introducers” — David Honeyman, David Hirschfeld and Olivier Blandin — who come on board as advisors on new projects. Club10mPlus rues the frustration of finding ethical projects and willing investors who truly want to make a difference... “It’s not easy,” admits Atwood. “I’ll be honest, it’s taken a while to embed into the culture. Finding suitable investors is always a challenge, in the past few years, it’s been incredibly difficult.”

There are other, more predictable challenges for her to circumvent or solve. “It’s quite a ‘boys’ network’ — you’re either in the club or you’re not. So yes, it’s challenging, but at the same time, because we’re quite diverse in what we do, I’ve been on a good journey. Is she “in the club”? Atwood laughs. “Well, I’m in a club, in America, and shortly to join a couple more — but that’s kind of how the industry has evolved.”

Is gender discrimination an issue? “Potentially... I’m a woman who’s trying to forge these relationships. You do come across it sometimes in the far East where you typically, should be male. That’s always a difficult one, a bit of a challenge.”

The company mantra states that its ethos and “the way we live our lives” defines the operation — and that resounds well with clients. “They come to us because they appreciate our openness, our transparency, and our ethical values.” And that cuts both ways: “If we don’t think they’re right for us, and we don’t think we can help them, we will not engage with them.”

‘My work is done when I find two people, one with the money and one with the idea — that’s the magic, and why I get up every day’

— Christa Atwood

Where is the line drawn on ethical issues? “When I feel the client’s not going to get a good outcome from an investment, I’m not going to transact. The way we work is, to keep everyone happy by being successful.  We’re very strategic when we look at a project: Can it work? If we think it can’t, we will tell the project owner.”

Sustainability, and “leaving the world in a better place than we found it”, form the behavioural pillar here. “It’s about making change. Humankind needs to wake up to what it’s doing to the planet. If it’s a project that aligns with feeding the world, rejuvenating the world, bringing in new technologies that are beneficial, we’re up for it.”

Has the company turned down big projects, or investors, because of misaligned values? A long pause, then: “Yes, we have. Purely because we’re never going to make you what you’re looking for, so we can’t accept (the task) — we know it’s not going to work.

“It’s all about relationships. I tend to say, ‘Listen, it’s not for us; I love that you’re proposing this sort of money to us, but ...’ You can take money from someone, but you may as well take money from a bank if it’s not going to be part of a relationship that you can develop and work with.

“My work is done when I find two people, one who wants to invest and one with the idea — that’s the magic, and why I get up every day.”

How does she screen-out unsuitable projects? “Once a project comes to us, the first line of filtration is my desk. ‘Does that make our weekly meeting?’ And if it does, we look at it. If it doesn’t, we’ll say so. We go through projects on a weekly basis, and sometimes we have to say: ‘This is never going to work’ — and we won’t engage. We do the deep dive once we agree on its feasibility .”

[caption id="attachment_25333" align="alignleft" width="225"] Christa Atwood[/caption]

Does carbon-offsetting cut the mustard, in terms of ethical investment? “Absolutely. Anything to reduce (emissions) and enhance the planet is what we’re about.” Is ethical investing partly about making wealthy people feel good about themselves? “Yes, there’s a good amount of that,” says Atwood, without hesitation. “Having wealth is great, but being able to share it is even better. When you’re making a difference, you’re rejuvenated by that. It’s about giving back, and the gratitude you get when you give back.”

One major project Club10m+ is pursuing is called Africa Eats. It’s been ongoing for the past 10 years and centres on establishing logistics for a food distribution network across Africa, from Tanzania to Rwanda, Kenya and beyond. The key thing is the use of local industries, and local people. It’s the kind of hands-on, obviously beneficial project that Atwood and her team are keen to tackle. Food waste — in perishable crop production such as bananas — is a major concern, and one that can be addressed. “If you have a transport system in place, you can take surplus to another area,” she points out.

“I want people to come to us and recognise what we’re trying to do for the planet. We want to be the market leader, making a difference, with passion — not just words.

“We don’t have time to circulate the money that we get. When a project comes to us, sometimes it’s time-precious and we lose out because we don’t have the correct investors ready to go, it then becomes quite frustrating. Timing’s crucial in our industry, we had (a deal involving) an eco-mansion in Paris, but because we didn`t have a suitable investor we lost out. With more investors, we have more chance of making things happen.”

Are ethical investors more tolerant of delays, or of lower returns? “I wouldn’t say that’s the case — they still expect a return on investment, and a generous one, as well.” Tax breaks are always welcome, but if a project flunks or drags on, no one is happy. “We definitely want more philanthropists to come forward,” says Atwood. “They’ve been hiding, and with good reason — it’s been a tough market. We’re seeing the change now, and it’s only going to get better.

“There’s a need there.”

For more information, please visit Club10mPlus website.


Rebecca Carter: Wise Words on Solar Energy

Since becoming Global Managing Director of three and a half years ago, Rebecca Carter and her team have dedicated themselves to delivering for their clients across the full solar asset management lifecycle.

[caption id="attachment_25366" align="aligncenter" width="900"] Rebecca Carter, Global Managing Director at WiseEnergy, with the Senior Leadership Team of the Company[/caption]

WiseEnergy, part of the NextEnergy Group, was founded in 2009 and has established itself as one of the world’s leading solar asset managers, offering a comprehensive range of services from development and construction to operational asset management. The company manages over 1,300 solar plants across nine countries, having recently opened an office in Spain and established services in Portugal, Poland, Canada and Romania.

With a PhD in Neuroscience, her career has taken in the pharmaceutical and healthcare sectors. More recently, she was a director at a leading UK charity but was keen to return to an international leadership position while remaining in a socially responsible industry.

Rebecca Carter defines WiseEnergy’s key functions in three main areas: financial, commercial and technical (engineering), all of which are fundamental in ensuring that clients’ needs are met.

On the financial side, which involves a whole suite of services including debt management, book keeping, treasury, tax compliance and financial reporting, WiseEnergy is in the midst of a “financial transformation project”, to automate and standardise many of their services through technology, in order to reduce risk, increase efficiency, and eliminate any unnecessary disconnect between different countries’ operations.

The commercial aspect of the business involves contract optimisation, management and reporting as well as revenue management, including hedging, short- and long-term power prices for clients,  which can be fixed for anywhere between five and twenty years. Supporting WiseEnergy’s clients to meet the European Commission’s SFDR (Sustainable Finance Disclosure Regulation) on ESG disclosure is also major considerations for the firm

From a technical (engineering) perspective, the WiseEnergy team work closely with O&M (Operations & Maintenance) managers of the plants, and develop and implement asset optimisation plans - all of which require great technical expertise. However, investing in technology is also critical. Similar to the finance transformation project, technical transformation activities have removed the necessity of the immensely time-consuming manual reporting, which has improved work-life balance of employees, reduced risk for clients as there is less possibility of human error, and increased speed of delivery, all of which have led to a reduction in costs.

WiseEnergy is always seeking to maximise its revenue so it can re-invest in improving its client services, and its digital Asset Management Platform (AMP), central to many of the improvements implemented across the organisation, positions WiseEnergy as one of the most technologically advanced asset managers in the sector. AMP allows its experts to access, collate and analyse data from its sites around the world and in order to help maximise the performance of the assets it manages.

Despite the increased importance of automation, she still considers the role of humans as invaluable and believes that technology can enhance their performance rather than replace it.

Rebecca Carter has employed technology to improve communications within the company. As an employer of workers in many different countries and disciplines, she sees it as an extremely useful tool in promoting staff cohesion and upholding morale.

During the pandemic she introduced monthly virtual meetings for all the members of staff and has expanded the practice by introducing an informal monthly platform called “Wise Words”, on which employees from across the global organisation introduce themselves, talk about their lives and interests:

“We alternate people from our sites around the world; it’s a very good way to introduce people and for them to get to know each other and feel part of the company.”

Corporate culture is very important to Carter. She realises that, in an increasingly competitive sector, staff retention is of paramount importance.

As a naturally collaborative and supportive person, she has fostered a caring culture, creating stronger bonds and driving global thinking.

Generous leave allowances, psychological support services, recognising and rewarding people for their work are all initiatives that have made WiseEnergy a better place to work, across the board.

Although there is much still to do to make WiseEnergy the best place for its clients and employees, , it is fair to surmise that as long as Rebecca Carter is at the helm, WiseEnergy will go from strength to strength.


A Sci-fi Author’s View on the Rise (and Control) of Human Population

There are eight billion people on Earth, and that could rise to 10 billion by the end of the century. What then? wonders TONY LENNOX...

American science-fiction writer Isaac Asimov predicted that by the 23rd Century, every last bit of the world’s surface would resemble Manhattan at lunchtime — a teeming mass of humanity.

In a 1978 lecture to college students, he said: “At the present rate, in 250 years the total population on earth will be such that the average density will be 100,000 people per square mile.” Asimov, who died in 1992 aged 72, was one many doomsday commentators contemplating the “population monster”.

He concluded that the solution lay in the education — and gender equality. “Give women equal rights in every possible respect,” he said. “The birth rate will go down, the population will be stabilised, and humanity will survive.”

Homo sapiens has been on the planet for some 300,000 years. About 2,000 years ago, there were 230 million people on earth. Numbers grew steadily, despite the occasional blip like the Black Death, which in the 14th Century killed up to a third of us.

By 1800, industrialisation was creating prosperity, and the global population hit a billion. By the 1920s, it had doubled. Then, in 1950, came an astonishing boom. A worldwide reduction in infant mortality, coupled with medical advances, meant that twice as many people were being born as were dying.

Former Monty Python comedian and globe-trotting broadcaster Michael Palin recently put it in a nutshell: “In 1943 when I was born, the Earth’s population was 2.3 billion.

“Now it is nudging eight billion. That’s all you need to know about the causes of global warming. To satisfy this massive, unprecedented growth, we’re taking the place apart.”

Palin is not the only one to link climate change to overpopulation. Sir David Attenborough, broadcaster and patron of Population Matters, shares the concern. “The human population can no longer be allowed to grow in the same old uncontrolled way,” he said. “If we don’t take charge of our population size, then nature will do it for us — and it is the poor people of the world who will suffer most.”

Another patron of the group, the primatologist Jane Goodall, says population growth underlies almost all the problems the world faces. “If there were just a few of us,” she said, “then the nasty things we do wouldn’t really matter, and Mother Nature would take care of it. But there are so many of us.”

When she expanded on the topic at the World Economic Forum in Davos in 2020, Goodall was lambasted by those who disagree that human population growth is to blame for environmental problems. Heather Alberro, a lecturer at Nottingham Trent University, believes such attitudes risk “fuelling a racist backlash” by singling out the world’s poorest people. Alberro believes that the cause of climate change and environmental damage is excessive consumption by the world’s ultra-rich” and “a system that prioritises profits over social and ecological wellbeing”.

In the last few years, a different shift has started to emerge — a population decline, and one that could change the planet. “Most people think we have too many people on the planet,” mused Elon Musk in 2022, “but actually, this is an outdated view. The biggest problem the world will face in 20 years is population collapse.”

UN statisticians predict that world population will peak at the end of this century, somewhere above 10 billion. Not all experts agree.

The Institute for Health Metrics (IHME), an independent Washington-based research organisation on global health, predicts that a peak of 9.7 billion will be reached by 2064 — after which will come a rapid decline. That potential decline is linked to contraception, and the education of girls and women in developing countries.

The two largest countries by population are China (1.44 billion) and India (1.38 billion). The growth rate in China is slowing down, with a year-on-year increase of just 0.39 percent growth, while India’s annual growth rate stands at 0.99 percent.

Elsewhere, populations in the developed world are generally static, or in decline. Hungary, Bulgaria, Italy, Poland, Greece and Portugal all recorded a decline in 2022/23. In Africa, 32 countries saw growth of between two and three percentage points in the same period.

A study published in The Lancet in 2020 predicted that by 2100, fertility rates in 183 of 195 countries would not be high enough to maintain current populations. The official rate required to maintain a steady population is 2.1 children per family. In many countries, that has dipped; in the UK, it stands at 1.6. Declines in working-age populations are also likely to occur in India and China, which the study says will “hamper economic growth and lead to shifts in global powers”.

Report author and IHME director Christopher Murray says the study should spur governments to start rethinking their policies on migration, workforces, and economic developments related to demographic change.

The societal, economic, and geopolitical power implications will be substantial, the IHME says. The decline in the numbers of working-age adults alone will reduce GDP growth rates — and that could result in major shifts in global economic power.

Natalia Kanem, a doctor and the executive director of the UN’s Population Fund, says that while the models, projections and timeframes of institutions may vary, “all signs point towards declining global fertility”. “Protecting the reproductive rights and choices of women will be crucial in this demographic transition,” she says.

And population decline is unlikely to be evenly spread. While the West’s population is predicted to rapidly shrink, growth will continue in many of the poorest countries. By 2100, 45 percent of the world’s population will probably live in Asia, with 38 percent in Africa. Europe, on the other hand, will be home to just 5.7 percent, and North America 4.3 percent.

The main driver for population is down to the number of women giving birth, and cultural change will probably have the most profound effect on human numbers. As women’s education is nurtured, more females enter the workforce — and make the choice to have fewer children, at a later stage in life.

Asimov, who claimed to be a feminist despite his allegedly wandering hands, was convinced that gender equality was the answer. Motherhood, he insisted, was not a sacred tradition. For too long, he believed, women had been considered a “sub-human form of men”.

“Those periods of world history in which women have had reasonable treatment,” he said, “the birth rate has dropped automatically. If having children was that great, men would have figured out a way to do it.”


Identifying Customer Needs and Bringing Credit Services to the Unbanked Citizens of Nigeria

CFI.co in conversation with Dr ‘Tunde Popoola, Group Managing Director/CEO of CRC Credit Bureau Limited, a private-owned credit bureau based in Lagos, Nigeria.

Nigeria’s CRC Credit Bureau Limited is on a straightforward but ambitious mission: to become the largest data provider in Africa.

The transformation process of evolution and expansion into a group structure began on January 1, 2022 — giving institutions a 360 view of customers by using innovative machine learning solutions and advanced data analytics to help organizations deliver superior insights, automate decisioning and rapidly modernize their operations.

What are the direct effects of the changes to your organisation’s abilities?

[caption id="attachment_25255" align="alignright" width="240"] Group Managing Director/CEO of the Nigerian CRC Credit Bureau: Dr-Tunde-Popoola[/caption]

‘Tunde Popoola: Over the past few years, we have been able to deliver superior insights to businesses, automate decision-making, and rapidly modernize their operations. We have stayed committed to developing solutions that exceed customers’ needs, and have launched new products, including the Risk Calculator, Delay Propensity Score, Churn Analytics, and the Account Aggregator platform.

With the Risk Calculator, institutions can now accurately predict how risky a customer is. The algorithm uses a risk scale to classify loan applicants into distinct categories; low risk, medium risk, and high risk, using two years of historical credit data.

We developed the CRC Delay Propensity Score, also known as CRC DPS - a score that assists institutions in reviewing their performing customers to predetermine those that may delay in their payments in the next thirty (30) to sixty (60) days due to social and economic factors. This enables the institutions to develop strategies to better support their customers.

Our Churn Analytics product analyses customer data to identify patterns and behaviours to indicate an elevated risk of churn. By understanding these factors, we are now able to help businesses implement targeted retention strategies to address customer needs and improve their experience.

The Account Aggregator platform collects and consolidates data from alternative sources e.g., financial data etc., easing access to credit and other financial products for individuals and businesses. This product promotes financial inclusion and expands lending through easier assessment of first-time borrowers.

We will continue to develop unique and innovative products that transform business processes in a capacity that cuts across all departments.

What relevant changes to legislation or regulation would you like to see?

In Nigeria, we have the Nigerian Identity Management Commission (NIMC), a commission with the mandate to manage the national identity database in Nigeria. A report published by the commission in 2020 showed that over a hundred million Nigerians had no official identity. Since then, the commission has tried to input all individual records into a database to establish or verify identities. All citizens and legal residents in Nigeria, from birth, are now eligible to enroll for National Identification Numbers (NINs). The commission has also partnered with telecommunication companies to ensure that a mobile number is linked to each NIN (National Identification Numbers).

This has made it easier to identify consumers in Nigeria, but there are still limitations. We would like a more inclusive NIN-adoption to simplify the identification of consumers. This will help people build credible profiles that enhance their standard of living.

Can you pinpoint any pitfalls to help newcomers to the industry?

The common data template was developed by the Central Bank of Nigeria (CBN) for financial institutions. For the non-financial sector, they may not collect some of the information on their customers for some fields from inception. They then need to begin to restructure their data collection process, which increases the amount of time it takes to submit data.

Do you have any anecdotes to illustrate your progress over the years?

CRC was licensed as a credit bureau in June 2009, and from January 1, 2022, we transitioned to a group structure. We have gone beyond providing credit reports and scores to unlocking value for our member institutions by providing insights through data-driven strategies. This has helped with decision-making, transformed businesses, and enhanced stakeholders' value.

We have also launched a mobile app called CRC Mobile, the first of its kind in our sector in Nigeria, allowing individuals access their credit reports, scores, set up monitors & alerts on their credit profiles, all from the comfort of their mobile phones and online channels.

CRC spearheaded major technological advancements with the introduction of a Data Management Module (DMM), allowing institutions to update the credit profiles of borrowers as they make repayments in real time as well as an Application Programming Interfaces that allows these institutions to fully automate the credit cycle of the customer from review of credit profiles to the submission of data on their customers' credit profiles as they occur.

As part of our sustainability and corporate social responsibility initiatives, we organize “You & Credit” webinars, aimed at educating individuals and SMEs on the importance of building and monitoring their credit. In addition to this, we always ensure they are aware of other initiatives that could affect their day-to-day lives. Our guest speakers are renowned people in their various fields and industry leaders providing a holistic view of the topic.

How do ESG parameters and sustainability principles affect the way your industry is run?

We have taken steps to ensure a diverse and inclusive workforce in the organization, from ground level to board level. We constantly review our internal operations to ensure we are adhering to the credit reporting guidelines from the Central Bank of Nigeria (CBN), the Credit Reporting Act of Parliament, and the standards set by the Nigerian Data Protection Regulation (NDPR).

Employee engagement is particularly important to us, and we organize staff-enhancement sessions to ensure our wellbeing. These sessions enable us to share and discuss updates on market trends, the world's best practice policies and promote enhancement in knowledge in various disciplines.

We are committed to the conservation of the natural world, by ensuring full automation of all technical processes.

What are the mid to long-term challenges faced by your business?

Every business has challenges, for us, I would say changes in government policies, environmental risks, and natural occurrences such as extreme weather events.

In addition, our business faces the challenge of attracting and retention of skills because of the significant rise in emigration of Nigerian youths with expertise and skills especially in data science, information technology and finance. We also face competition from fintechs, software and data companies who try to render the same or similar services like ours without being licensed credit bureaus.

What has been the single most important requirement to becoming a global business?

Our people and customers are among our most valued assets.

How do you see as the short- to mid-term prospects for your industry?

According to the World Bank, the credit penetration rate in Nigeria increased from 12.1 percent in 2020 to 30.1 percent in 2022. While this is clearly an improvement, it is still relatively low given that Nigeria has a population of over 200 million.

We have seen that credit to the private sector increase year-on-year. This gives us the hope that more Nigerians will access credit facilities in coming years.

What excites you about the business world in general?

A rise in digital transformation and the continuous adoption of technology. There has been an increase in the demand for credit facilities, signifying a mindset shift towards credit. I have been impressed by the introduction of solutions to improve customer experience, such as self-service options, interactive voice response (IVR) software, AI (Artificial Intelligence) chatbot features as well as the use of data and analytics in driving decision making.

What lessons have you learned from your career?

I believe analyzing data is crucial in strategic decision making. The insights can potentially change the course of operations across an entire organization. I have also learnt that successful businesses are built by its workforce. New initiatives are bound to become obsolete quickly, so it is important to always think outside the box. You also must be very consistent and be willing to accept change in the pursuit of your goals. Managing your time, building, and sustaining your relationships with others is also particularly important. One more thing - being able to anticipate and exceed customers’ expectations will play a huge role in deciding whether you will become a market leader.

What motivates and enthuses you?

The ability to develop innovative solutions using technology and enable businesses to make better-informed decisions motivates me to do more. In addition, the ability to contribute to bridging the financial inclusion gap in Nigeria, improving the lives of Nigerians — particularly small business owners.

What is special about your management style?

CRC has a democratic method that promotes a free flow of ideas between managers and team members. This facilitates open communication, collaboration, and participation.

Can you share some management or organization secrets?

We ensure a continuous review of our processes and develop new products and services that meet the anticipated needs of our customers. We monitor and analyze markets to stay ahead of the curve, and we apply continuous customer engagement and relationship management.

What are the key strengths of your team?

Everyone is uniquely skilled and contributes their knowledge. There is a unified belief in the vision of the company, and a culture of open communication and support.

Our support team is vital to the success of the company, as they interface directly with customers. They are the first point of contact for all enquiries and requests.

What are the key traits of a good corporate leader?

There are several traits a good leader should possess, such as critical and strategic thinking, leading by example, integrity, the ability to identify and nurture potential, empower people to think creatively and leading the team to maximize its full potential.

A leader’s role is also to drive innovation and ensure clear communication.


Otaviano Canuto: Macro-economic Policy Change - We’re Not in Kansas Any More

The possibility of multiple financial shocks lies ahead.

Three significant changes to the macro-economic policy regime in advanced economies have unfolded in the past two years.

Fears of a chronic insufficiency of aggregate demand as a growth deterrent — which prevailed after the 2008 global financial crisis — have been superseded by supply-side shocks and inflation. As a result of that, the era of abundant and cheap liquidity provided by central banks has given way to higher interest rates and liquidity squeezes. Finally, also because of those changes, there was a strong devaluation of financial assets in 2022.

A triple structural change in the macro-economic policy regime in advanced economies has taken place, as compared to the post-global financial crisis period.

Some believe that the era of ultra-low interest rates and low inflation is gone; others believe the situation is reversable. Quantitative tightening and higher basic interest rates by central banks became the new norm, as a sort of normalisation of monetary policies.

[caption id="attachment_25412" align="aligncenter" width="900"] Figure 1: U.S. 10-Year Treasury Real Interest Rate[/caption]

There are now fears about further financial shocks. Starting in 2021, inflation in the US and Europe rose to the highest levels in decades. US consumer prices rose by about seven percent in 2022, the highest in four decades. In Germany, 2022 ended with an annual inflation rate of 9.6 percent, perilously close to the first double-digit inflation since 1951.

The surge is explained by succession of supply and price shocks, while a robust recovery of post-pandemic demand was taking place. In 2023, rising interest rates are threatening to push the global economy into recession.

Many analysts initially viewed the inflation as transitory, and reversible. Now it is acknowledged that excess demand, relative to supply, called for restrictive central bank policies. Doubts are emerging about how high, and for how much longer, interest rates will have to go to soften labour markets, and prevail over the resistance in services inflation. Are these symptoms of a business cycle, or some structural change that means an end to low inflation and low interest rates?

[caption id="attachment_25413" align="aligncenter" width="900"] Figure 2: Less Generalised Inflation in the U.S. and Europe. Source: Brooks et al (2022).[/caption]

In the years following the 2008-09 global financial crisis, sluggish economic growth was attributed to insufficiency of aggregate demand. Multiple hypotheses were established: hangovers from the financial crisis, income concentration, the exhaustion of the technological waves of previous decades, and demographic dynamics.

There were long period of low interest rates (Figure 1), accompanied by a flood of liquidity from central banks via quantitative easing programs (purchases of government bonds, mortgages, and, in the euro area, private assets) after the 2008-09 crisis. That offset the relatively low use of expansive fiscal policies. But the fiscal policy signal changed with the emergency government support during the pandemic.

Multiple shocks showed that supply, not demand, was causing the difficulty. There has been a decline of labour market participation, especially in the US. Certain segments of the population have left the workforce at unusually high rates, either by choice or necessity. This has been compounded by disruptions in global labour flows, as fewer foreign workers have received visas or are willing to migrate.

[caption id="attachment_25414" align="aligncenter" width="900"] Figure 3: 10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity[/caption]

Russia's invasion of Ukraine triggered food and energy supply shocks. Governments intensified their weaponization of trade, investment, and payment sanctions — worsening tensions between the US and China.

Some global supply chains have been rewired to aim for more “friend-shoring” and “near-shoring”. The perception of geopolitical risks and the greater frequency of extreme weather events are leading companies to pursue resilience over cost efficiency. Less quantity-responsive and more price-responsive supply chains could become the norm.

The energy transition is also intrinsically inflationary. Changes in the scope of globalisation, labour shortages and climate change have put into question the belief of a continuing era of low inflation and interest.

Looking ahead:

Inflation rates seem to have peaked in the US and Europe (Figure 2), but the tightness of labour markets and the downward resilience of core inflation in services are potential dampening factors. Mild or hard recessions loom on both sides of the Atlantic. The inversion of the US yield curve (Figure 3) suggests this to be the case.

[caption id="attachment_25415" align="aligncenter" width="900"] Figure 4: U.S. Inflation Expectations. Source: Federal Reserve Bank of New York, Survey of Consumer Expectations.[/caption]

Inflation is expected to remain high in 2023. But expected medium-term inflation remains low, which may be interpreted as a sign of inflation so far not becoming entrenched (Figure 4).

Goodhart and Pradhan have argued that demographic dynamics and a retreat from globalisation mean higher inflation and higher interest rates over the long term. In contrast, Blanchard believes that the factors that have led to low real interest rates on safe assets will return once the current inflationary shock is over.

The frequency and intensity with which (relative) deglobalisation, geopolitical events, and climate change bring new shocks will determine whether the 2021/2022 reconfiguration of demand-supply interaction will persist. And whether US and Europe return to the path on which a mismatch between wealth and creation of new assets tends to lead interest rates again to low levels.

The End of Boundless Liquidity

For years, central banks have responded to virtually any sign of economic weakness or financial market volatility by putting more money in. During the pandemic, central-bank balance sheets made huge additional jumps relative to the trend since the global financial crisis (Figure 5).

But as they extended what were supposed to be time-limited interventions, some collateral damage was inflicted. Liquidity-laden financial markets became dissociated from the real economy.

In the US “taper tantrum” in 2013, the-then chair of the Fed, Ben Bernanke, announced that the institution would start planning the end of quantitative easing — and ended up reversing this course six weeks later. It also occurred in the fourth quarter of 2018, when another fed chair, Jeremy Powell, had to make an embarrassing about-turn from his mild quantitative tightening because the markets got choppy.

[caption id="attachment_25416" align="aligncenter" width="900"] Figure 5: Central Bank Balance Sheets. Source: Refinitiv / Financial Times[/caption]

The diagnosis of inflation as transient gave way to promises of quantitative tightening in earnest — and raised interest rates. The Fed continued to inject liquidity into the economy until March 2022, gradually shrinking its balance sheet starting in June.

It also finally began to raise policy rates. It switched to a series of steeper hikes, including a record four successive ones of 0.75 percentage points between June and November 2022, and ending the year with another 0.50 percentage points. It should raise the base rate by 0.25 percentage points two or three more times in the first few months of 2023, and leave it there for a while.

US low inflation and ultra- low interest rates have been replaced with higher inflation and interest rates (Figure 6). The European Central Bank is moving in the same direction, though with less intensity.

[caption id="attachment_25417" align="aligncenter" width="900"] Figure 6: U.S. CPI inflation and Fed Policy Rates. *UK RPI Pre-1989. Source: Keith Fray, Steven Bernard, Matthew Brayman and Justine Williams (2022). War, inflation and tumbling markets: the year in 11 charts, Financial Times, December 29.[/caption]

Looming Fragility

If 2022 was a year of equity and fixed-income devaluation, the financial year ended with losses of more than $30tn in equities and fixed-income bonds. Figure 7 shows how negative a year it was for investors, in both stocks and bonds. The macro-economic slowdown in 2023 is likely to also lead to lower overall asset yields, especially from stocks.

Corporate debt increased in the years of low interest rates and abundant liquidity. Although analysts suggest that there is no generalised vulnerability in terms of mismatches of rates between assets and liabilities, there are multiple points at which some sudden disappearance of liquidity could lead to dramatic adjustments and insolvencies.

The OECD in 2022 highlighted major financial market developments, spill-overs to credit risk, and rising vulnerabilities in several market segments as a reflection of tighter monetary conditions, slower global growth, higher inflation, and geopolitical tensions.

A metamorphosis in financial flows took place during the era of easy money, with a significant part of global financial activity shifting after the global financial crisis from highly regulated banks to less regulated and constrained entities, including asset managers, private equity funds, and hedge funds. Non-bank institutions replaced banks in financial intermediation, and a morphing and migration of risk took place.

After the 2008 financial crisis, high capital requirements were established, limiting banks’ activities; the banking system was de-risked. But the newly prominent intermediaries are not likely to maintain strong resilience against sudden and sharp changes in the cost of borrowing, or access to finance.

The post-2008 crisis reforms, while targeted at reinforcing financial stability, may have replaced counterparty risk with liquidity risk. Shocks on asset prices may be propagated by intermediaries being obliged to shrink their holdings, exacerbating those shocks via transmission and contagion.

The displacement of counterparty risk into liquidity risk appears in several forms. In US Treasury markets, banks used to perform a critical warehousing role, especially in the short-term lending “repo” market. Stricter capital rules have led them to move to other, higher-margin business lines, while other market participants have not yet filled the void. When volatility rises, hedge funds and high-frequency traders keep a certain distance.

[caption id="attachment_25418" align="aligncenter" width="900"] Figure 7: Total Nominal Return in U.S. Stocks and Bonds, 1871 to 2022 (percent). Source: Keith Fray, Steven Bernard, Matthew Brayman and Justine Williams (2022). War, inflation and tumbling markets: the year in 11 charts, Financial Times, December 29.[/caption]

The emphasis on collateral has also exacerbated instability by increasing selling pressure. The UK gilt market meltdown in October 2022 is a prime example: pension funds had bought derivatives as part of a liability-driven investing. Then, after Liz Truss’s newly inaugurated government announced a plan for massive unfunded tax cuts, government bond yields soared, suddenly hitting some of the country’s highly leveraged pension funds.

When gilt prices fell sharply, they received margin calls requiring them to post more collateral. The price was driven down, leading to more margin calls: a vicious circle. Were it not for the emergency intervention of the Bank of England, the withdrawal of the Truss government’s proposal, and the government’s eventual downfall, the forced sale of bonds by pension funds could have turned into a major financial crisis.

Another potential form of illiquidity has arisen in recent years as investors have moved beyond bank accounts, stocks, and bonds. In times of market stress, funds focused on real estate, private credit, and others have been hit by more redemption requests than they can easily handle.

The BIS Quarterly Review examined how poor liquidity conditions across market segments have kept asset price volatility elevated, and contributed to swings in global financial conditions. The report focuses attention on signs of fragility in the markets for agency mortgage-backed securities (MBS), dedicating a box to the risk of liquidity disruptions.

There are also non-transparent off-balance-sheet risks in both the bank and non-bank financial sectors. The BIS review of December contained a chapter by Claudio Borio, Robert N McCauley and Patrick McGuire on “huge, missing and growing” Dollar debt in foreign exchange swaps, forwards, and currency swaps.

The fragility of the financial system has implications for the work of central banks. Instead of facing their basic dilemmas — reducing inflation, or maintaining economic growth and employment — they now face the task of reducing inflation, maintaining growth and jobs, or guaranteeing financial stability. As growth slows, monetary tightening is prolonged, and illiquidity bouts exacerbate financial fragility, central banks might be forced to try to reconcile their quantitative tightening and interest rate hikes with interventions to provide liquidity at key points of the system.

Whatever the duration of the new policy regime may be, we are no longer in Kansas with respect to supply versus demand, monetary policy, and financial stability.

First appeared at Policy Centre for the New South.

About the Author

Otaviano Canuto, based in Washington, D.C, is a senior fellow at the Policy Center for the New South, a nonresident senior fellow at Brookings Institution, a visiting public policy fellow at ILAS-Columbia, and principal of the Center for Macroeconomics and Development. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund and a former vice-president at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil. Otaviano has been a regular columnist for CFI.co for the past ten years.

Follow him on Twitter: @ocanuto


Inclusive Pan-African Investment Bank Keeps the Continent’s Finance Flowing

Verdant Capital is a leading Pan-African investment bank and investment manager, specialising in private credit and private equity.

[caption id="attachment_25422" align="aligncenter" width="900"] Managing Director: Edmund Higenbottam[/caption]

It was established in 2013, and leverages its deep investment experience and enduring relationships to fuel fintech development across the African continent. It stays in close contact with investors and entrepreneurs via offices in Mauritius, South Africa, Ghana, Zimbabwe, the Congo, and Germany.

Managing director Edmund Higenbottam is a Cambridge graduate who worked at Deutsche Bank and Morgan Stanley before moving to the African continent in 2008. He has expertise in microfinance and fintech, and is responsible for the Verdant Capital Hybrid Fund, which invests in inclusive financial institutions across Africa.

Verdant Capital is the IMAP partner firm for its region. IMAP — with 40 partner firms in 40 countries, 500 M&A bankers and the completion of 250 transactions each year — is the world's largest M&A partnership.

Verdant Capital handled the second-largest deal in Nigeria’s electronic payments sector in 2021: the sale of digital payment network Baxi to MFS Africa, which simplifies cross-border payments via an integrated hub.

In 2021, it advised Zeepay, a Ghanian mobile financial services business, on an $8m series-A capital-raise and the acquisition of Mangwee Zambia. In August 2022, it raised a further $10m in debt funding for Zeepay.

The firm helped wholesale telecoms company WIOCC to raise funds to develop an interconnected pan-African network of open-access, carrier-neutral datacentres. The Nigerian lead investor was attracted by WIOCC’s expansion into the country. Verdant Capital helped Tugende with debt and mezzanine funding to expand its asset finance business in East Africa, and helped Planet42 to grow its rent-to-own car business for underbanked people.

In 2022, in addition to advising clients in its investment banking business, Verdant Capital invested in fintechs through its own funds, the Verdant Capital Specialist Funds business.  These included Watu Uganda and Pezesha.

Verdant Capital Specialist Funds expects significant growth in coming years. It is licensed and registered by the FSC (Mauritius), authorised by the FSCA (South Africa), and registered with BaFin (Germany).

The firm has been widely recognised for its achievements; it is a repeat winner in CFI.co’s awards programme. In 2022, it took the honours for Best FinTech Capital Raising Team (Africa). It has also been named Africa Global Funds' Best Independent Advisory Firm (Pan Africa, 2020 and 2021) and Private Equity Africa's Local Financial Advisor of the Decade (2022).


OECD: Sustainable Development and Climate Change Require More than Just Money

Blended finance could hold the key to overcoming major world challenges.

Financing the UN’s Sustainable Development Goals and climate objectives requires huge financial investment — in an increasingly urgent timeframe.

[caption id="attachment_25440" align="alignright" width="300"] By María del Pilar Garrido Gonzalo Director for Development Co-operation, OECD[/caption]

Seven years remain to meet the 2030 Agenda. The pressure to act has resulted in calls from the international community to reform global financing for sustainable development architecture and multilateral development banks (MDBs).

Those changed would include the Bridgetown Agenda launched by Mia Mottley, Prime Minister of Barbados, as well as the G20 review of MDB capital adequacy frameworks and G7+ proposal to reform the World Bank Group.

US Treasury Secretary Janet Yellen has emphasised the need to mobilise finance more effectively. Governments alone will not be able to bear the burden, and private finance has a crucial role to play.

Efforts to unlock private investments for sustainable development in developing counties — with the support of blended finance — are not on-pace to meet global ambitions. This is despite the “push-effect” of institutional inclusion in ESG-related and SDG-aligned investments.

Blended finance can provide financial returns to investors, and expand resources for developing countries. It complements domestic investment in those countries, and official development assistance (ODA) inflows. It can help to close the SDG- and climate-financing gaps — and there is scope to achieve more.

Official development assistance (ODA) from the OECD Development Assistance Committee (DAC) members amounted to some $186bn in 2021. Between 2012 and 2020, $300bn in private financing was mobilised by official development finance interventions, peaking at just over $51bn in the final year.

"Efforts to unlock private investments for sustainable development in developing counties — with the support of blended finance — are not on-pace to meet global ambitions."

The recent annual conference of the OECD DAC Community of Practice on Private Finance for Sustainable Development (CoP-PF4SD) brought together around 800 policymakers and experts to discuss how to achieve scale and impact when mobilising private finance for the SDGs.

Blended finance can boost limited public funds by investing in proven financial instruments such as credit and political risk-guarantees or first-loss exposures. This changes the risk-return relationship of public sector projects and transactions in developing countries to match the private sector’s appetite — and lies at the heart of the blended finance concept.

Development finance instruments applied at market rates can improve viability and boost investor confidence, while concessional development finance reduces the weighted average cost of capital. It works towards delivering financial sustainability.

The conference distilled three key points:

Unlocking Private Finance Requires More Than Money

One of the key bottlenecks is a dearth of bankable projects in developing countries. “Bankable” means ready-for-financial-close projects with predictable and secure long-term cash-flows. Investment into pipeline development is needed — as is capacity development and a thorough financial and operational risks-and-gaps analysis.

An understanding of good practice in terms of instruments, projects and programmes — including peer learning — is important for public sector actors aiming to unlock private finance. It is equally important to facilitate the correct institutional set-up to enable mobilisation at scale, and bring donors together for collaborative approaches to mobilisation and impact.

A unified approach is crucial to scaling finance. In the multi-stakeholder concept, blended finance actors can include development ministries or ministries of foreign affairs and the aid agencies that typically administer the ODA budget. Ministries of finance or treasuries typically hold decision-making power on financial guarantees and shareholder positions on the boards of MDBs. Stronger ties between public and private sector actors improve mutual understanding of each other’s needs, investment preferences, and value added.

The OECD DAC Blended Finance Principles put effective partnering centre stage, and realities require follow-up.

Innovation and Replication May Not Lead to Scale

Tailoring blended finance to local contexts and conditions is one of the OECD principles. Tailor-made transactions ensure that players can come together with their various comparative advantages. “New” and “first time” deal structures must be followed by implementation of proven structures at scale to capitalise on the efforts. While development actors and policymakers tend to focus on innovative approaches, mainstream private sector financial actors value track records and comprehensive data.

The CoP-PF4SD conference found that smaller, repetitive, and similarly structured projects can be conducive to scale. But excessive replication can foster fragmentation. If 10 development actors were to set up a blended finance facility of $10m each, this would create 10 times the transaction cost as nine development actors backing one established facility of $100m.

From a private sector view, a vast offer of smaller scale blending opportunities can be hard to digest and involves high transaction costs. The 2020 edition of the OECD Blended Finance Funds and Facilities Survey captures 198 existing vehicles. The IFC Amundi Planet Emerging Green One (EGO) fund, invests in green bond issuances in developing countries. As a collective investment vehicle, it pools official and commercial finance as “anchor investments”, and pension funds, insurance companies and asset managers as senior investors.

The fund closed at $1.42bn in 2018, with the aim of deploying $2bn over the seven years of operation. Unlocking commercial capital will require a certain degree of transparency.

Use Established Instruments and Practices

Recent market developments put a strong emphasis on “portfolio approaches” to mobilise commercial financiers and overcome ticket-size and diversification challenges. These include credit-risk sharing mechanisms such as securitisation as well as green, social, sustainability and sustainability-linked (GSSS) bonds.

With regards to the former, development actors can leverage the vast outreach of local commercial lenders by absorbing part of their credit risks via syndications or guarantees. This can enable them to do more (for example, loans to micro-SMEs or young entrepreneurs). In the burgeoning GSSS bond market, development actors can fuel the uptake in ODA-eligible countries through targeted actions in policy areas such as market infrastructure, support of issuers, anchor investments, impact reporting or guarantees.

Development finance is not being reinvented by the use of guarantees or technical assistance. Securitisation and GSSS bonds can be seminal in mobilising and motivating investors.

The international community needs to act if global challenges are to be overcome; reform proposals are required to get there and the Spring IMF/WB Meetings and upcoming Macron summit in June are events that could and should propel action. The increased use of blended finance instruments has a contribution to make.

About the Author

María del Pilar Garrido Gonzalo is the OECD Director for Development Co-operation.

Before joining the Organisation, between May 2018 and May 2022, Garrido was the Minister of Planning and Economic Policy in Costa Rica, responsible for the areas of climate-resilient development, sustainable public investment, public sector reform, and development co-operation policy. Also, in office, she has served as the Deputy Minister of Planning an Economic Policy, the Technical Secretariat of the 2030 Agenda, Chief of Staff and Senior Advisor.

Prior to this, she worked for 13 years at the country level on locally led sustainable development cooperation projects in Costa Rica, Central America and the Caribbean, and the Latin American region for UNDP, the European Union and the Diputació de Barcelona.

She has also worked for NGOs on multi-stakeholder partnerships for sustainable development, particularly engaging with the private sector and civil society organisations.

Garrido is both a Spanish and a Costa Rican national, holds a BA in Political Science from the University of Costa Rica, a MSc in Economics from Trinity College and a MA in Political Science with an emphasis on democratic governance and public policy from University of Costa Rica.


Asian Development Bank: Decarbonisation ‘Won’t Work Unless it’s Equitable’

The transition to global net zero to address climate change must be both ambitious and fair. Otherwise, it will fail to achieve its goals — and lack the vital public support required over the long-term.

[caption id="attachment_25468" align="aligncenter" width="900"] Farmers, and those working outdoors, are particularly vulnerable to the effects of climate change. Photo: ADB[/caption]

Although ambitious decarbonisation will provide widespread benefits across Asia, the policies required to make the transition will create winners and losers.

Reaching Paris Agreement goals will require profound changes in the energy sector, including the phasing-out of fossil fuels from power generation, expansion of renewables, and the substitution of electricity for other types of energy. It will require carbon sinks — principally forests — to sequester carbon to offset emissions that are difficult to eliminate.

Although these changes can increase employment, some energy sector workers will lose their jobs, primarily in fossil fuel extraction such as coal mining. The prices of fossil fuel-based energy will increase, and so will the price of goods and services produced using such energy.

Expanding areas of forests and bioenergy would require agricultural production in smaller areas, which may put pressure on farmers. Our analysis finds that about 22 percent of the area devoted to cereal crops in Asia’s developing countries may be replaced by energy crops and forests.

Reductions in cultivated areas can, in turn, reduce food production and cause prices to rise. Research finds that around 60 million people could be pushed into hunger in Asia by 2050 due to efforts to meet Paris Agreement goals.

Those on low incomes spend a much higher share of their budget on food, which will become more expensive. In many regions of Asia, lower-income households spend more on energy than richer ones, so increases in residential energy costs are also regressive.

But failure to mitigate emissions would also have regressive effects. The lowest income areas will bear the brunt of climate impacts, with more than a third of GDP at risk to climate change under a conservative and partial estimate. In Asia, those who stand to lose the most are those with the least income, often working in agriculture, living in areas vulnerable to the effects of storms and flooding, and doing manual labour in hot conditions.

For lower carbon level to be maintained long-term, climate-change mitigation policies must preserve political support. Recent research has found that measures such as carbon pricing are most politically acceptable in the presence of generous social insurance and low inequality. Decarbonisation policies may lead to political backlash and reversal when effects are regressive or lack compensation for the poor.

A major stumbling block in international climate policy negotiations is the perception of whether the distribution of costs among countries is fair. To ensure that it is, we recommend training and reskilling to help integrate those adversely affected by the transition into growth industries. The jobs created will require new skills, and will often be urban and comparatively higher skilled. The workers who lose employment are unlikely to fill new labour demands. Those made redundant will need to be reskilled, while the education system will need to generate the training needed by the renewables industry.

Labour markets can be supported by public services to help information flow, and reforms can ensure that barriers to improvement are removed. During the transition, social protection, including unemployment benefits, are needed so that workers can smoothly transition to new opportunities.

A fair transition depends on ensuring food security. Food is the single largest household expense among lower-income households in Asia’s developing countries. Equipping Asian agriculture to deal with the simultaneous pressures posed by mitigation policy and unmitigated climate change is critical to protect the livelihoods of many of Asia’s poor. In addition to investments in public services, land rights need to be strengthened to ensure that farming and forest-dependent communities are not displaced.

To manage the increased costs of energy, food and other necessities, policies such as direct transfers, tax rebates, exemptions and carve-outs to low-income households should be put in place. Research suggests that lump-sum rebates or transfers often benefit lower-income households more than tax cuts. Tax discounts or temporary exemptions to vulnerable sectors can help to smooth the adjustment of affected industries.

Beyond domestic fairness, international fairness — equity between developing countries and their wealthier counterparts — will not be achieved without better international co-ordination. That is needed so that emissions reduction can happen at the lowest cost, with compensation to ensure fairness for those who bear it. Right now, decarbonisation pledges and commitments under the Paris Agreement are submitted by individual parties without agreed principles about how mitigation burden should be divided.

Without that, there is little incentive for individual countries to do more. Climate benefits are shared by the world, whereas the countries that do more take on more cost. Obviously, it is unrealistic to get the entire world to agree on a common set of principles in the near term — but this may not be necessary for progress.

If some countries, including major emitters, could agree on principles for allocating emissions under carbon budgets that meet Paris Agreement goals, outcomes could be more progressive.

The benefits of an ambitious climate policy based on international co-operation will disproportionately accrue to those who are most in need and who have the least historical responsibility for the climate crisis. The only path to long-term fairness within Asia’s developing countries is a climate policy that is both ambitious enough to stem climate losses, and with enough attention to fairness to be accepted over long periods.

This article relates to ADB’s 56th Annual Meeting being held in Incheon, Republic of Korea, under the theme Rebounding Asia: Recover, Reconnect, and Reform. It is based on research from the publication Asian Development Outlook Thematic Report: Asia in the Global Transition to Net Zero.

By David A. Raitzer, Manisha Pradhananga, and Shu Tian

The views expressed are those of the authors and do not necessarily reflect the views of the Asian Development Bank.