Month: August 2025

Infrastructure deficit continues to be one of Africa’s fundamental problems. It is estimated that to close the infrastructure gap, Africa needs investment in the region of $130-170 billion annually.

The story in Ghana is not different. It is estimated that Ghana needs an annual amount of $37.9 billion to fund infrastructure needs by 2047.

In the education sector alone, an estimated $2.5 billion is required to address the infrastructure needs between 2025 and 2028. Then one has to look at the other sectors – transportation, health, power, social, water, etc – to see the reality of the problem.

Funding these infrastructure needs has been a challenge for successive governments. The current government has indicated that the economy is in difficulty. The previous government has admitted this much.

The disagreement has been on when the economy started recovering and who takes the credit for it. In the light of challenging economic circumstances, the question is how the government funds and delivers infrastructure development, which was a major campaign promise of the current government.

The Big Push Agenda

The government has launched its big push agenda, which aims to accelerate infrastructure development. From the mid-year review budget, $13.8 billion has been dedicated to the big push agenda, which targets major roads. Other sectors must also be funded. Government funding alone is not enough to accelerate total infrastructure development.

Delivering infrastructure in this current economy requires looking beyond government funding. The government has touched on some of these options. The following paragraph shares ideas on practical goals to attract private sector funding for fast infrastructure delivery to, at least, attempt to close the gap.

Private Sector Involvement

The Government has made several statements aimed at involving the private sector in infrastructure and related service delivery. These include private sector participation in the power sector, public-private partnership in road construction, attracting private capital into the Volta Economic Corridor, and a 24-hour economic programme, among others. To ensure this is not just another speech but transformed into reality, the Government needs to take concrete steps and avoid bottlenecks that have derailed many of the government-private sector initiatives. What are the immediate steps for the government to take?

• Clear project identification & development – general statements in national address and budget presentations must be reduced to a clear project description. The projects to be implemented through any of the public-private partnership options should be clearly defined. A preliminary feasibility study must be conducted by the responsible entity or a transaction advisor, which clearly defines the parameters of the project and clearly indicates government expectations and the role of the private sector. A strong basic document on the project that drives the process is a critical factor for roll-out.

Whilst the regulatory framework requires a full feasibility study report, a strong pre-feasibility document may, in some instances, allow for shifting the requirement of a full feasibility study report to the private sector. This saves time and costs that the government spends on project development and avoids duplication of effort on feasibility studies.

• Procurement Process – A clear procurement process is one problematic aspect of engaging a private sector party. In engaging a private partner for such projects, a clear, transparent and efficient procurement process. Whilst the law sets out the various procurement options available, the option must be guided by project-specific requirements. This must be understood at the initial stage and be available with clear timelines to guide the process. Each procurement stage must be based on clear documentation, defined output and criteria for evaluation.

The use of an unsolicited proposal is provided for under the law, and where this is to be resorted to by the government, clear benchmarks that must be met must be defined, with key output requirements meeting the government’s expectations for proceedings. Final decisions should be based on relevant public sector comparators for executing the project.

• Documentation – every step of the partnership arrangement process must be documented, from project conception to implementation. The project concept and prefeasibility study report, procurement documents, evaluation criteria and reports, contract documents, etc, must all be carefully prepared. Each of these documents must meet specific standards. Particularly for the underlying contract documents, key components must include project scope and the output requirements, roles and obligations of various parties, risk allocations and mitigation measures, key performance indicators, etc.

While standard contracts are available, they must be reviewed and revised to meet each project’s specific requirements. At the procurement stage, the government must indicate negotiable and non-negotiable elements.

• Timelines – The usual complaint about shying away from a PPP arrangement is that the engagement process from project inception to contracting takes too long. This needs to be addressed by ensuring that while speed is injected into the process, thoroughness is not sacrificed. The processes falling within the purview of the Ministry of Finance, particularly approval processes, should be streamlined with a clear indication of the time within which approval should be given. In addition, there must be a specific timeline communicated at commencement to guide the process to avoid instances where potential private partners are left in the wind without a timeline to guide their expectations and planning.
• Financing and viability gaps – given the divergent interests, most public projects may not be viable to the private partner. The expectation of a public entity is to deliver infrastructure for public use at the least cost and be affordable to the public as end users. The private partner’s expectation is to get reasonable returns on investment. The two must find a middle ground for a public-private collaboration for the delivery of public infrastructure by a private party. This, in most instances, requires viability gap funding by the government. Due to limited available public funds, the government must explore other options to meet this viability gap funding to make projects viable.

Options such as leveraging existing or completed projects to make new projects viable are open for consideration. An example may suffice here. Whilst engaging a private partner to construct the Accra to Kumasi road under a PPP arrangement may not be financially viable to the private sector, given the low road tolls, the construction of aspects of the project by the government may reduce the private investment, enabling the project to be viable.

The same option is available for most of the government projects that have been started but not completed due to funding constraints. The Saglemi project comes to mind as a good candidate for this option.

Tax waivers are an option. Another option is to assist a private partner in getting concessionary funding. Subsidising user charges in the form of annuities is also available to meet such funding gaps. All these options avoid the need for immediate funding from the government.

• Project champion—A government seeking to deliver a project within an election calendar must give a matching order to a specific head of institution to deliver based on a specific timeline. This may be a minister or head of an entity. Such a mandate must come with a consequence for failure to achieve the target. In many instances, the failure to implement a project is due to bureaucracy and a lack of a clear project champion. An easier way for the project champion to achieve his or her goal is to get a transaction advisor who is given clear key performance indicators which are time-specific. Usually, relying on institutional department personnel who may already be burdened leads to slow delivery and delay in meeting timelines.
• Build investor confidence – this is mainly in what may constitute the “soft factors”. All the above factors affect building the right investment environment to attract the right private partners locally and internationally. There should also be consistency in government official statements on the public-private partnership programme. A recent conflicting statement on the government not intending to engage in PPP has the unintended consequences of creating investor empathy when seeking to engage potential private partners. There must be unison in government communication on the programme. Related is how the government handles existing contracts with private parties in quasi-public private partnership arrangements. Arbitrary termination of existing arrangements may diminish private partners’ confidence in entering into long-term contractual arrangements for new projects.

Conclusion

Attracting private partners and using private resources for public infrastructure development remain the most low-hanging fruit for the government to fast-track needed public infrastructure development and related services. The success of launching a full-scale programme to attract private involvement in public infrastructure development beyond securing loans from private commercial institutions requires a concerted effort on the part of the government.

Ghana has enacted a PPP Act and subsequently developed regulations to give effect to the Act. The next phase is to practically implement the process on projects. The above action points on specific projects are a good starting point.

 

Africa’s digital economy is booming, transforming the way businesses and consumers transact. From mobile payments to e-commerce, online transactions are becoming the norm. To keep up, governments across the continent are rolling out ambitious digitalization programs, driving innovation and financial inclusion. But with rapid growth comes new challenges—cyber fraud, online scams, and vulnerabilities that test the strength of financial systems. In response, central banks are tightening regulations, striving to balance innovation with security.

As legitimate businesses thrive, scammers have also gone digital; become sophisticated and are constantly refining their tactics to deceive the unsuspecting public. Many of these scammers target individuals outside Africa, luring them with fake government contracts, fraudulent precious mineral deals, or even romantic relationships.

You may have come across stories of so-called “African Princes” offering gold deals, oil blocks, even looking for love on the internet, or government parastatals chasing after businesspeople with lucrative contracts. The victims of these scams suffer significant financial loss, emotional distress, and even legal complications.

To stay ahead of cybercriminals, here are 10 key warning signs and practical tips to safeguard yourself from becoming a victim of such scams.

1. Too-Good-to-Be-True Offers

This might sound like a broken record but if it seems too good to be true, it probably is. Scammers love sending unsolicited too-good-to-miss offers to their targets. These could include fake government contracts, high-return investment opportunities, or even a surprise inheritance from a long-lost relative.

At some point, you may have come across an email or conversation promising a return of, say, $10,000 in just one week after investing $500—guaranteed and risk-free! This is a major red flag. High returns with no risk are unrealistic, as legitimate investments never guarantee such profits. Promises of quick, exponential gains are often telltale signs of scams or Ponzi schemes.

Always be suspicious of unsolicited emails asking for personal information or upfront payments. For instance, an unsolicited email demanding sums of money to process a government contract is a red flag as genuine government contracts are not awarded that way.

Legitimate contracts are governed by procurement laws, and all contract-related communications are conducted through official channels. While some official portals may require a fee to access bidding documents, these fees are typically modest. Most African countries have established public procurement legislation, often influenced by international frameworks like the UNCITRAL Model Law on Public Procurement. No legitimate government will invite you to bid via a shady email address like “africanprince@yahoo.co.gh.” Official procurement processes follow established protocols and use verified government domains.

2. Don’t Let Love Blind You

In 2022, nearly 70,000 people in the United States of America reported a romance scam, and the reported losses hit a staggering $1.3 billion. The average reported loss being $4,400. Romance scammers might promise marriage or a lifelong partnership after only a few online interactions.

Scammers often fabricate urgent situations—such as travel expenses, medical emergencies, or other pressing needs—to manipulate victims into sending money. A major red flag is any urgent request for financial assistance, especially if secrecy is emphasized and the person avoids meeting in person.

If someone you have never met is asking for money, be extremely cautious, it is likely a scam.

Sometimes, romance is just a front for a larger scam. A popular tactic targeting diasporans eager to reconnect with their roots involves a fabricated inheritance scheme. Scammers claim that their romantic partner—often the diasporan—is set to inherit a large estate but must first pay legal or administrative fees to secure the inheritance. However, in most African countries, inheritance matters are managed by the state or courts, and any legitimate process can be independently verified.

Scammers today often pose as military officers on active duty in remote areas. After catfishing their targets and gaining trust, they convince victims to buy items online and have them delivered to a supposed residence, promising to repay once they regain access to online banking. Believing they have the scammer’s address, victims feel secure and pay without verifying. Only later do they realize the scammers never lived there, and the purchased items are gone.

If you have to send money or make significant commitments, verify the person’s identity through independent sources, such as a lawyer, a professional investigator or trusted local contacts.

3. Unsolicited and Irregular Communications

Be cautious of unsolicited emails, certificates, court orders and letters especially those that contain poor grammar or use incorrect terminologies. For instance, a letter claimed to be from the Attorney General of Ghana which has inscriptions such as “The Federal Republic of Ghana” is a red flag. This is because the Republic of Ghana is a unitary state. Similarly, if an official letter from Nigeria does not indicate that it is a “Federal Republic”, no significant action must be taken based on such a document alone.

Also, legitimate government communications are unlikely to come from generic email addresses (like Gmail or Yahoo) and should not pressure you into immediate action. Official email addresses usually have the country’s official domain code, followed by a domain that indicates government affiliation and the name of the particular ministry or department.

Here’s a handy list of country codes for the top 12 economies in Africa to help you identify official government emails:

South Africa: @gov.za	Egypt: @gov.eg	Ethiopia: @gov.et	Kenya: @go.ke
Democratic Republic of the Congo: @gouv.cd	Nigeria: @gov.ng	Morocco: @gov.ma	Angola: @gov.ao
Côte d’Ivoire: @gouv.ci	Ghana: @gov.gh	Algeria: @gov.dz	Tanzania: @go.tz

 

4.Verify Identities

Scammers may pose as government officials, business executives, or wealthy individuals. One must always ask for verifiable credentials, such as official government IDs, business registration documents, or proof of employment. If the individual or company is legitimate, they should have no issue providing this information. After getting this information, a prospective investor can always double check by looking at websites and social media profiles, verify the legitimacy of the business through credible sources like government registries, professional directories, or industry associations.

Another way of confirming identities is demanding references and referrals. When there are no reputable organizations you can easily contact to validate the information you have been given, you may be dealing with a scammer.

5.Resist FOMO; do not be pressured

Scammers create a sense of urgency, pressuring victims to make quick decisions without taking the time to verify information. Victims often labouring under the fear of losing out, ignore red flags or make uninformed decisions.  Whether it is a limited time offer on a government contract or an emergency that requires immediate financial assistance, do not let urgency cloud your judgment. Take the time to thoroughly investigate before proceeding. Scammers tend to demand advance payments or fees to participate in bidding processes or access “exclusive” investments. Genuine opportunities generally do not require upfront fees.

It is always better to be safe than sorry!

6. Seek Professional Advice

Before entering into any contract or sending money, it is wise to consult a legal professional, particularly one familiar with international transactions, and expertise in the law of the country in which the business will be transacted. They can help you verify the legitimacy of the offer and provide guidance on how to proceed safely.

A local lawyer can conduct thorough background checks on individuals, businesses, and contracts to ensure their validity and detect potential red flags before any agreements are signed.

7. Use Escrow or Third-Party Services for Large Transactions

For significant financial transactions, especially in business contexts, consider using escrow services or a trusted third-party intermediary. These services protect both parties by ensuring that funds are only released when the agreed conditions are met. It is a great way to add an extra layer of security and ensure that both sides fulfill their obligations before money changes hands.

8. Be Wary of Unverified Payment Channels

Whether dealing with a business contract, romantic partner, or investment scheme, using verified payment methods is critical. Avoid sending money through untraceable channels or to third-party accounts. Stick to secure and traceable payment methods such as bank transfers with verified accounts or official payment platforms. They come in handy after a victim has been scammed. Be cautious of anyone requesting payments through unconventional methods, such as cryptocurrency or gift cards, especially if they are pressuring you to act quickly.

9. Limit Your Exposure to Sensitive Information

Scammers use personal, financial, or corporate information to manipulate victims further. Whether in a personal or business context, protect yourself by:

• Sharing Minimal Information Initially:

Only provide essential details after verifying the other party’s legitimacy. Personal information, bank details, and confidential business information should be shared sparingly.

• Beware of Phishing Attempts:

Scammers attempt to collect user information through fake promos, offers, emails or websites. Verify the legitimacy of any communication before clicking links or downloading attachments.

That enticing pop-up promising you a free iPhone 16 in exchange for a simple click is likely a phishing scam designed to steal your personal information. Phishing attempts can also be more sophisticated, such as emails posing as official bank communications with alarming subject lines like “Urgent: Your Account Has Been Suspended!” These messages often warn of suspicious activity and urge you to click a link to “verify your identity” or “reactivate your account”.

To protect yourself, always verify the sender’s email address, avoid clicking on links in unsolicited messages, and visit official websites by typing the URL directly into your browser. When in doubt, contact your bank or service provider directly to confirm the legitimacy of any request.

10. Report Suspected Scams

If you suspect you are being scammed, report it to the relevant authorities in your country. Doing so helps keep the authorities informed about scammers’ new tactics and protects others in the future. They may also be able to help track down the scammers’ true identities.

Additionally, you may engage a local lawyer to assist in the recovery of all funds lost due to the scam.

Conclusion

Online fraud is a real threat, but with caution and vigilance, you can protect yourself. Taking your time, verifying information, and seeking professional advice can prevent both financial loss and emotional distress. By staying skeptical, asking more questions, and consulting trusted sources, individuals and businesses can confidently navigate opportunities while safeguarding their interests.

Remember: Take your time, consult, and always ask more questions.

Bifurcation is a process by which complex legal disputes can be separated into distinct issues, which can then be resolved separately in the arbitral proceedings. It is the separation of the arbitral proceedings into different phases that helps in addressing distinct issues. Most often, bifurcation refers to the separation of jurisdictional issues from the merits of the dispute, or the separation of the issue of liability from that of damages. Bifurcation can potentially reduce the time and costs attendant to arbitral proceedings, as it allows the parties to focus on the most important issues, thereby avoiding expending time and costs over less significant issues.

Through bifurcation, arbitrators can identify the key issues in dispute and separate them into distinct phases or tracts. For example, in a construction dispute, the parties may agree to bifurcate the issues of liability and damages, allowing the parties to first determine liability

before proceeding to the question of damages. This approach can be particularly useful in cases where the parties disagree over the extent of damages, as bifurcation allows the parties to focus on establishing liability first, which can often lead to the settlement of the entire dispute.

Bifurcation under various Rules of Arbitration

Rules of each arbitration institution may differ and the availability and procedure for bifurcation may depend on the specific terms of the arbitration agreement and the facts of the case. Under the majority of arbitration rules, bifurcation may be allowed, subject to the

discretion of the arbitral tribunal. In general, arbitration rules do not contain any specifically laid out procedure pertaining to bifurcation. However, some rules empower the tribunal to order bifurcation, circumstances permitting. The power of arbitrators to order bifurcation is grounded on the principle that arbitral tribunals have discretionary powers to conduct arbitral proceedings as they deem appropriate.

For instance, the International Chamber of Commerce (ICC) Arbitration Rules, for example, provide that the arbitral tribunal may, after consulting with the parties, decide to bifurcate the proceedings if it considers it appropriate, taking into account the complexity of the case, the cost and efficiency of the proceedings, and the possibility of resolving certain issues separately.

On the other hand, the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules do not expressly provide for bifurcation. Instead, parties are at liberty to agree to bifurcate the proceedings, or the tribunal may order it if it considers it appropriate and the parties are agreeable.

Under the London Court of International Arbitration Rules (LCIA), a party may apply for bifurcation after the constitution of the tribunal but before the final award is issued. The tribunal may grant the request if it considers it appropriate and may make a procedural order setting out the issues to be bifurcated and the procedure to be followed.

Similarly, the International Centre for Settlement of Investment Disputes Rules (ICSID) provides that the tribunal may bifurcate the proceedings if it considers it appropriate, after consulting with the parties. The tribunal may also issue separate procedural orders for each issue before the final award.

Factors to take into account when considering Bifurcation

There are various factors to be taken into consideration when deciding whether or not to bifurcate. First, the complexity of the case should be considered. Where there are multiple issues to be addressed, bifurcation can help break down the case into smaller, more manageable parts, making it easier for the parties to focus on the key issues in the dispute.

Secondly, the resources of the parties to the arbitration should be factored in since bifurcation may not be appropriate in cases where the parties have limited resources.

Thirdly, the parties need to contemplate the likelihood of settlement. It is worth noting that bifurcation may not be appropriate in cases where parties are unlikely to settle, as it can add additional phases or tracks to the arbitration process, thereby defeating its intended purpose.

Lastly, the preference of the parties ought to be considered, as party autonomy is a pillar of any arbitration. The decision to bifurcate or not to bifurcate should reflect the preference and needs of the parties involved. If the parties agree that bifurcation is the most suitable approach, then it may be a useful tool for resolving the dispute. However, if one party is opposed to bifurcation or prefers a different approach, then it may not be effective in the proceedings.

Pros and Cons of Bifurcation

The decision to bifurcate or not to bifurcate in arbitration proceedings ultimately depends on the specific circumstances of the case, and above all, the preference of the parties involved. There is no onesize- fits-all approach, and the benefits and drawbacks of bifurcation should be carefully weighed against the specific needs and objectives of the parties.

In Kenya, some concerns have been raised about the issue of bifurcation. One such concern is that parties may use bifurcation as a delay tactic or as a way to increase the length and the costs of the arbitral process. Another concern is that bifurcation may unfairly prejudice one party over the other, especially if the issues are interdependent.

Pros

Bifurcation fosters efficiency by helping to streamline the arbitral process and allows the parties to focus on the key issues in the dispute, potentially saving time and costs. By breaking down the complex issues into smaller, more manageable issues, it can help the parties who may be overwhelmed by the complexity of the dispute. Furthermore, it can create opportunities for settlement by allowing parties to address the key issues in dispute separately. For example, if liability is established in the first phase of bifurcation, the parties may be more willing to settle the matter before proceeding to the damages phase.

Bifurcation also promotes flexibility since it can be tailored to the specific needs of the parties and the dispute, allowing greater flexibility in the arbitration process.

Cons

On the downside, bifurcation can unwittingly add complexity to the arbitral process by requiring the parties to navigate multiple phases or tracks of the case. This can be especially challenging for the parties who are not familiar with arbitration or who lack the resources to effectively navigate the bifurcated process.

Moreover, bifurcation can at times increase the cost of the arbitration by requiring additional hearings and discovery of each phase or track of the case.

Additionally, it can also delay the resolution of the case by adding additional phases or tracks to the arbitration process. Bifurcation can also create the risk of inconsistent results if the same issues are addressed differently in each phase or track of the case. This can cause confusion and undermine the credibility of the arbitration process.

Procedure to be followed when requesting for Bifurcation

Once a party to an arbitration has decided that they want to bifurcate the proceedings, they can proceed to request for bifurcation. In the vast majority of cases, the request for bifurcation of jurisdictional issues is filed by the respondents and to a lesser extent by the claimants or by both parties as per their agreement.

Firstly, the party that seeks to bifurcate the arbitral proceedings makes a request for bifurcation in accordance with the rules of the arbitration agreement or the arbitration institution administering the proceedings.

Secondly, the other party has the opportunity to respond to the request typically within a specified time period. After the response by the other party, the tribunal may hold a preliminary hearing to determine whether bifurcation is appropriate, taking into account factors such as complexity of the issues, the potential for cost savings, and the impact on the overall duration of the arbitration.

If the tribunal decides that bifurcation is appropriate, it will issue a procedural order setting out the issues to be heard separately and the schedule for the separate hearings. After hearing the separate issues, the tribunal will provide its decision on those issues before proceeding to the main dispute.

Assessment by the Arbitral Tribunal

Although the power to bifurcate proceedings is an exercise of the arbitral tribunals’ discretion, case law has generated a number of conditions to be met for tribunals to consider whether bifurcation is warranted. Some arbitral tribunals have relied on the following conditions set out in the Glamis Gold vs. USA case (Glamis Gold Ltd. v The United States of America, Procedural Order No. 2 (Revised), 31 May 2005:

• whether the objection is substantial in as much as the preliminary consideration of a frivolous objection to jurisdiction is very unlikely to reduce the costs of, or time required for, the proceeding
• whether the objection to jurisdiction if granted results in a material reduction of the proceedings at the next phase
• whether bifurcation is impractical in that the jurisdictional issue identified is so intertwined with the merits that it is very unlikely that there will be any savings in time or cost

Other tribunals, however, have ruled that they should not be placed in the “strait-jacket” of considering the issue of bifurcation solely through the lens of the Glamis Goldcriteria as they do not form a “stand-alone test”.

Conclusion

In light of the above discussion, the most important factor to be considered by a tribunal in determining whether to bifurcate or not, is the likelihood of success on the merits of the bifurcated issue. Unless a party can demonstrate to the satisfaction of the tribunal that it has a significant likelihood of success on the merits of the bifurcated issue, then bifurcation should not be ordered. In summary, while bifurcation can offer certain benefits in arbitration proceedings, it also carries potential drawbacks and risks, which the parties should equally consider. Parties should also consider the potential costs and benefits of bifurcation before agreeing to it as a strategy for resolving their dispute.

Sustainability and green governance now play a significant role in every sphere of society and business. In the 18th issue of Legal & Kenyan, we featured an article titled “Green Governance: Reporting on Sustainability and Climate Change” where we discussed the International Financial Reporting Standards Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related Disclosures Standards (IFRS S2) collectively (the Standards) that were issued by the International Sustainability Standards Board (ISSB). Under the Standards, corporate entities are tasked with the duty of ensuring that they make sustainability–related disclosures in their annual financial reports in accordance with the Standards’ requirements.

The issuance of the Standards reflects the need to meet the commitments made under the Paris Agreement to combat and mitigate climate change. The formation of the ISSB in 2021 and the release of the Standards in 2023 further signify the commitment to this cause. However, while the issuance of the Standards is a step in the right direction, compliance with the Standards is where the actual work lies. It is also important to note that the Standards are one of many sustainability standards introduced in the recent past affecting various industries.

Adoption of the Standards

The effectiveness of any standard lies in its implementation. As the saying goes, “the proof of the pudding is in the eating”, which is fitting in this context given that the Standards prescribe requirements on corporate entities regarding their specific annual financial reports. To meet the requirements under the Standards, immense resources at the disposal of the entity ought to be present. In these circumstances, the uptake of and compliance with the Standards has been met with good reception from corporate entities of all sizes.

Further, while compliance with the Standards of the ISSB is voluntary, adoption has been well-received globally. Some entities partially adopt the Standards, others adopt slight amendments and others fully embrace the ISSB standard of reporting. Focusing on Africa, countries such as South Africa, Nigeria, and Kenya are some of the notable jurisdictions at the forefront of adoption of the Standards, having made commitments for their full adoption with slight modifications relevant to each jurisdiction.

Green Financing

Undoubtedly, by the nature of their business, the banking and finance industry plays a pivotal role in promoting the adoption of sustainable business practices. “Green financing” refers to any structured financial activity designed to ensure a better environmental outcome and a more resilient future. Simply put, it is where financial products and services are issued with environmental considerations. From the perspective of financial institutions, this works best, given that the core nature of their business entails the sale of financial services and products.

The additional aspect now in consideration is the trading of these products and services under environmental or sustainability considerations. This benefits financial institutions by passing some compliance responsibilities onto the customer for them to obtain the relevant product or service they seek from the financial institution. Secondly, these products or services (be it loans, grants, or capital investments) find their way into the financial institution’s balance sheet and form part of the institution’s annual financial reports.

In Kenya, NCBA Group PLC is one of the financial institutions that have rolled out green finance products and services. In conjunction with Proparco Groupe AFD, NCBA recently signed a facility of KES. 6.7 Billion (USD 50 Million) in a bid to realise the sustainability commitments it made last year through its “Change the Story” sustainability agenda. This agenda is anchored on five (5) pillars comprising of fifteen (15) sustainability commitments. The project is expected to support green financing in small and medium-sized enterprises that are women and youth led.

On its part, the Equity Group is one of the players within the financial services industry at the forefront of championing sustainability and sustainable practices within the organisation. Having released its sustainability reports for three (3) consecutive years, Equity Group has made a deliberate effort to align the company’s long–term strategies for growth with globally set standards and procedures that enhance sustainable growth. From its FY2023/24 sustainability report, Equity Group has adopted a three–pronged strategy for sustainability, leveraging on deepening its sustainability leadership, resilience for sustainability and finally, deepening its sustainable impact. Going forward, Equity Group plans to continue embedding ESG factors in its operations and lending practices, as the organisation seeks to mature its sustainability practice at group and subsidiary level.

In South Africa, according to Mr. Sim Tshabalala, the Chief Executive Officer of Africa’s largest lender in assets – The Standard Bank Group, as a financial institution, it has made huge strides in formulating an array of green finance products and services for both their corporate clients and individual or retail clients. He is on record stating that Standard Bank has made a commitment to green finance ZAR 250 Billion (USD 13 Billion) between 2022 and 2026. Standard Bank has formulated green finance products for its retail customers which enable them to access financing towards solar installations at their homes at lower lending interest rates than through regular loans. Green finance presents an exciting opportunity for the financial services sector and Mr. Tshabalala hazards a guess that in the near future, green finance shall form a big portion of many financial services institutions’ corporate and investment portfolios.

Streamlining Internal Processes

These efforts, however, need not be limited to customer-facing products and services. Financial institutions can also streamline their internal processes to become more efficient and sustainable, in accordance with the Standards. What this achieves for the relevant financial institution is that these efforts made in accordance with the Standards are reportable and as such, form part of the entity’s annual sustainability reports. The Central Bank of Kenya (CBK) recently reported that lenders in Kenya are now incorporating Artificial Intelligence (AI) technologies to improve operational efficiencies, predict consumer behaviour, and manage risk exposures more effectively. CBK further noted that some of Kenya’s largest lenders are using AI to reduce risks related to fraud given that, lenders in Kenya have admitted to deploying AI to combat instances of fraud in their sustainability reports. For example, Standard Chartered Bank (Kenya) Limited states in its recently published sustainability report that: “Our Financial Crime Compliance team continues to proactively identify, prevent potential fraud, terror financing and money laundering activities using next-generation surveillance, financial crime monitoring infrastructure and machine learning.”

Similarly, Stanbic Bank Kenya (which is part of the larger South African based Standard Bank) also recently reported that it leverages: “…artificial intelligence and other advanced technologies to improve risk assessment, scenario analysis and decision-making processes….” Its South African parent company reported that digitisation of key consumer processes has been key in making the company more sustainable. This arises from consumer demand for products and services that are as technologically sophisticated and efficient as other facets of their lives. It further reported efforts towards “de-cashing” its platform to match with the new entrants offering cashless financial services. This has enabled Standard Bank to reduce the resources it pours into management and securing of cash which ultimately increases efficiency and streamlines its internal processes more sustainably.

Upshot

It is evident that large corporations, as opposed to smaller ones, tend to adopt and implement the Standards. However, it is important to note that there is no “one size fits all” approach to their implementation. Implementation is still evolving, with stakeholders formulating the best approach for implementing the Standards, based on their own individual circumstances.

As corporations, notwithstanding their size, chart a way forward in discovering what is the best approach for them to implement the Standards, they may borrow a leaf from those that have already started. When designing their strategy, corporations may consider tailoring some of their services and/or products towards achieving a more sustainable outcome. As such, a corporation would be required to determine the services and/or products on sale within its portfolio that can be tweaked to realise a sustainable outcome in line with the Standards.

Another mechanism available to corporations is to ensure compliance with the Standards within their respective organisations. This can be achieved by enhancing operational efficiencies through leveraging technology to take up certain tasks within the organisation; reduction and possible elimination of unnecessary or redundant processes; and reorganizing human resources for robust and efficient governance structures – all of which are reportable under the Standards.

In conclusion, it is not in doubt that the Standards are fairly new, and the relevant stakeholders and key players continue to formulate the nature of implementation for all entities. As already established, the resource pool required to ensure implementation of the Standards is enormous. These factors, however, should not dissuade entities, nor act as a deterrent factor from the uptake of and compliance with the Standards. On the contrary, they should serve as a catalyst in enhancing their uptake, as it is through an entity addressing the challenges it would face in implementing the Standards, that it will be able to formulate adequate and specific measures to ensure compliance with them.

As a parting shot, in a bid to drive forward the sustainable investment and financing agenda from an African perspective, it would be ideal to formulate and establish an alliance such as the Global Sustainable Investment Alliance – or join it. In our experience, it is a strong platform to advance sustainable investment and finance, ensuring that the financial services sector plays a key role in achieving a more sustainable future.