IBM eyes Africa for growth as banking flourishes across the continent

Global technology and consulting firm, IBM recently ramped up its deal flow in Africa, inking deals in the banking sector in various countries across the continent.

Earlier this month, the company signed a deal with one of Tanzania’s largest banks by assets, the National Microfinance Bank (NMB) that would help develop a core banking system.

In addition, just yesterday, it signed a deal with Ethiopia’s largest bank, Commercial Bank of Ethiopia to expand the company’s IT infrastructure. The deal will help the bank migrate from using manual financial processes to more automated options.

“We had to completely transform our banking systems to offer new services, cut customer waiting times and improve our competitive position” said John Ncube, chief information officer NMB.

“With our market expansion strategy, we are actively increasing our ability to provide high-value solutions for our clients and partners across the continent,” said David Sawe, country general manager, IBM Tanzania.

The company has also previously inked deals with three large Nigerian banks, First National Bank in Namibia and finance agencies in Cameroun and Senegal. It has reportedly decided to focus on financial services, telecommunications and the public sector as its core focus on the continent.

“IBM has realized that the time for Africa is now and is using what they call analytics to identify challenges and potential efficiency gains for all the three sectors,” said Stanley Kamanguya, an analyst at IDC East Africa.

“The financial services sector is quickly transforming; banking institutions are facing challenges that come with expanded infrastructure while still trying to keep [up-to-date] with new technologies like Internet payments, e-commerce, e-banking and m-banking as well as regulatory compliance and consumer protection issues,” Kamanguya said.

IBM is one of a string of multinational firms focused on technology that have increasingly been ramping their activities in Africa. Global search giant Google has similarly been expanding its presence across the continent.

As the second fastest growing region in the world, Africa portends strong prospects to multinationals and investors looking to profit from high growth markets. Sectors such as ICT and banking are attractive investment destinations, as African countries look to automate processes in diverse sectors and sign up millions of citizens currently without bank accounts, using Internet solutions and mobile devices. In addition, as the world’s fastest growing mobile phone market, savvy investors looking to marry opportunities in mobile with diverse sectors ranging from banking to agriculture are likely set to profit in the coming years.