World News

Bob Diamond says Africa faces challenges as global banks pull out

Katy Barnato, Bronwyn Nielsen
WATCH LIVE
Clearly, there are headwinds in Africa: Bob Diamond
VIDEO2:4002:40
Clearly, there are headwinds in Africa: Bob Diamond

The fast-growing economies of Africa face headwinds from the pull-back of international banks from the continent, Barclays' erstwhile-chief executive told CNBC, as the bank moves to sell down its business in Africa.

Countries like Nigeria, the continent's biggest economy, received a flurry of international trade finance in the build-up to the global financial crisis of 2007-08.

Since then, inflows have slowed, increasing the economic challenge for the continent where many people still struggle to access energy supplies or basic education.

"There are headwinds from commodities and international banks pulling out," Bob Diamond told CNBC Africa on Saturday at the London Business School's Africa Business Summit.

Commodities recovery is ‘probably a little bit too fast' says Vedanta Resources CEO

Since quitting Barclays in 2012 following the bank's interest-rate manipulation scandal, Diamond has focused his attention on Africa. In 2013, he co-founded Atlas Mara, which purchases African banks with the aim of establishing a sub-Saharan Africa-wide banking chain.

In addition, Diamond co-founded Atlas Merchant Capital in 2013, which invests in the financial services sector. The investment firm is currently working with U.S. private equity firm, Carlyle Group, to establish a consortium to bid for stakes in Barclays Africa.

Diamond declined to comment on the possible bid on Saturday.

Barclays has already sold a 12.2 percent stake in its African subsidiary, raising aggregate gross sales proceeds of just over $13 billion South African rand ($878 million). It confirmed the sale on Thursday.

"Since the financial crisis we have seen many of the Europeans pull back (from Africa), particularly those who were providing trade finance," Diamond told CNBC on Saturday.

Follow CNBC International on Twitter and Facebook.