Nigerian banks expanding across Africa are facing increasingly complex regulatory requirements as host countries push for greater local participation, stronger compliance and increased investment in indigenous talent.
Analysts said recent developments in The Gambia and Kenya highlight the different regulatory and operating environments lenders must navigate as they expand across the continent.
In The Gambia, the Central Bank of The Gambia directed commercial banks, including Nigerian-owned Access Bank, FirstBank, GTBank and Zenith Bank, to begin phasing out non-Gambian employees in favour of suitably qualified Gambian nationals.
Wale Olusi, Director of Deals Advisory at PwC Nigeria, said the directive does not prevent foreign-owned banks from operating in the country but requires them to comply with local regulations.
“On the Gambia, the regulation clearly doesn’t stop foreign-owned entities or banks from operating, as the case may be, but they must comply with local laws,” Olusi said.
He said The Gambia’s limited manpower capacity had historically resulted in Nigerians and other foreign nationals occupying senior positions in some institutions.
According to Olusi, the latest directive means affected banks will need to invest more in training and developing Gambian professionals capable of taking on roles currently held by expatriates.
“What this simply means is that these institutions have to invest in training and empowering locals, building their capacity to do the jobs required, if they wish to continue operating in The Gambia,” he said.
Olusi said the development reflects a broader concern across Africa and other parts of the world over expatriate participation in local labour markets.
The available figures show varying levels of Gambian representation among senior management and board positions at banks operating in The Gambia. Access Bank Gambia has four Gambians among seven positions reviewed, while GTBank Gambia has five Gambians among seven.
Zenith Bank Gambia has three Gambians and three Nigerians among six positions reviewed, while FirstBank Gambia has two Gambians and three Nigerians among five positions.
Ecobank Gambia, which is not Nigerian-owned, has three Gambians, three Ghanaians and one Nigerian among seven positions reviewed.
The figures cover only publicly identifiable board and senior management positions and do not represent the full workforce of the banks.
Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., said banks should first determine the actual proportion of expatriates in senior positions before assessing the potential operational impact of the Gambian directive.
“We need to establish what proportion of senior management roles are actually occupied by expatriates. It could be very small. It could be just a few banks that have expatriates in those particular positions,” he said.
Olubunmi said greater local participation was becoming a feature of financial regulation across African markets.
He cited Ghana, where foreign-owned financial institutions cannot have both a foreign managing director and a foreign chairman.
The analyst said Nigerian banks seeking to build sustainable operations across Africa would increasingly need to develop local executives capable of taking over key responsibilities.
“The truth is that, for most banks that operate internationally, if you really want to penetrate and grow your market share in a particular market, the best way to operate is to ensure that the business is increasingly handled by locals,” Olubunmi said.
The Gambia development came in the same week that Kenya approved the transfer of Access Bank Kenya’s business, assets and liabilities to National Bank of Kenya.
Olubunmi, however, stressed that the Central Bank of Kenya did not compel Access Bank to merge the two institutions.
“Access Bank owns both entities. Access Bank acquired NBK,” he said, explaining that Access Bank had previously announced plans to integrate the businesses after acquiring National Bank of Kenya.
He said National Bank of Kenya had a stronger franchise in the Kenyan market than Access Bank Kenya, making consolidation part of the group’s strategy to streamline its operations.
The two developments, Olubunmi said, demonstrate the different regulatory and commercial considerations Nigerian banks face across African markets.
He argued that lenders should avoid applying a uniform strategy to every country, given differences in regulation, labour markets, culture and competition.
For banks entering smaller markets, Olubunmi suggested an approach in which experienced executives initially establish operations while the institutions simultaneously develop qualified local professionals who can gradually assume key positions.
“You can have a five- or seven-year strategy where you initially go in with people who understand your culture and operations, and then gradually identify reputable and qualified Gambians who can take over those roles,” he said.
He added that local executives could provide commercial advantages by bringing knowledge of local cultures, languages and customer behaviour, particularly as banks expand their retail and small and medium-sized enterprise businesses.
“So, I don’t think it will discourage expansion if the business case is there. What it will do is affect your strategy,” Olubunmi said.
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