Monday, June 30, 2014

Interview of Kamben Padayachy Deputy CEO, Head of Global Banking, Treasury and Markets

AfrAsia Bank has participated actively in the Mines and Money conference and has also accepted to sponsor this conference. 

  • What is the importance of holding such a conference in Mauritius?

The mining sector has become one of the pillars of the African economy. The abundance of natural resources has contributed to the high growth rates that we are witnessing today on the continent.  At the same time, the financial sector has had a very important role to play in its growth, which as you are aware, is highly capital incentive.  Given that Mauritius is rapidly establishing itself as an international financial centre for this part of the world, it was important that we host this year’s Mines and Money conference to showcase our banking and financial structuring capabilities. It should be noted a number mining companies from around the world use the Mauritian IFC for their investments on the continent.

  • Mauritius took a step forward on investment in the mining sector in Africa with the arrival of Shumba Coal in Mauritius which  has set a fundraising operation on the Stock Exchange of Mauritius as part of a project operating in coal mines in Botswana. How  can the promotion of the mining industry in Africa be beneficial to the national economy?

This is a very commendable initiative and which hopefully opens the door to more listings by mining companies in Mauritius. This can only be beneficial  for our economy because these companies set up operations here and create employment opportunities. At the same time, it attracts international investors to invest on the Stock Exchange of Mauritius. This has a ripple effect into the banking industry as well as their is requirement to raise funding for expansion into Africa as well. Therefore, it can only be a win-win scenario for the economic operators in Mauritius.

  • Is Mauritius condemned to being used as an international financial platform only  for large investment projects in the mining sector in Africa or should it take an active part in exploiting the potential of that sector in Africa?

It is true that a lot international mining companies use Mauritius for their investments in Africa and have even set up offices here to manage their African operations. The bank sector can definitely play an important role and this is why it was important that the mining community meet in Mauritius to understand that the financial sector in Mauritius can help them for their day to day banking as well as for raising funding in foreign currency for their African projects. I think we are now building a good track record of being able to fund large projects in Africa. The aim is to showcase our capabilities as a rising international financial centre for Africa.

  • When one mentions mining, this raise the concern of respect for the environment, and the label of pollution that is usually attached to the mining industry. Does this cause an effect  in decision making of potential investors whether in Mauritius or abroad ?

It should be noted that a lot of large mining companies operating in Africa are governed by international environmental regulations and are therefore in the obligation to abide by these regulations in all the jurisdictions that they operate in, including Africa, otherwise they face penalties. This definitely provides comfort to international investors and financiers.
  • How far is AfrAsia Bank willing to go as part of its support for investment projects in the mining sector in Africa? (I mean has the bank set up a portfolio only for mining sectors in Africa, do you plan to set up a special fund to promote investment in this sector of the economic activity?

AfrAsia Bank has a defined strategy for the African continent, of which the mining sector is an important feature. We have a number of clients already in this sector and we want to accompany them in their expansion strategy on the continent, while expanding our client base. We feel that increasingly it is important that we provide them with full-fledged banking services, a sort of one-stop banking provider to cater for their day-to-day banking needs as well as their long term investment strategy. This is a model that has been used by investment banks in Singapore during the rapid growth of the mining industry in Asia and helped the country establish itself as a financial hub for Asia. We are already seeing benefits from our approach.

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