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Ethiopia Undertaking Digital Transformation with Supportive Regulatory Framework
World Bank chief lauds Egypt's success to overcome obstacles, achieve reform
Tunisia participates in WorldFood Moscow
The New Times – Rwanda
By: Werner Hoyer
World leaders gathered at the United Nations in the New York this week to take stock of the global fight against climate change, and to submit new emissions-reduction commitments. Given the scale of the climate crisis, we are not moving nearly as fast as we should be. We have been stuck in second gear for too long. Accelerating the pace of change will require a combination of efforts from all actors, public and private.
Fortunately, there is already a growing private-sector coalition dedicated to combating climate change, through the work of the Climate Finance Leadership Initiative (CFLI). Led by Michael Bloomberg, the UN’s Special Envoy for Climate Action, the CFLI was created to mobilize private capital at the global level in response to this critical issue. This month, the CFLI released a new report, Financing the Low Carbon Future, which outlines ways green finance can be scaled up to support an orderly transition to a low-carbon economy, and identifies opportunities for public-private partnerships to meet the objectives of the 2015 Paris climate agreement.
The EIB is the largest multilateral investor in climate-related projects in the world. But now, answering the call of European heads of state and European Commission President-elect Ursula von der Leyen, we intend to scale up our ambitions and strengthen the EIB’s role as the European Union’s dedicated climate bank. By mainstreaming climate considerations and targeting low-carbon investments, the EIB will be able to channel at least €1 trillion ($1.1 trillion) toward low-carbon projects over the next decade.
To achieve this, at least 50% of EIB finance will be dedicated to climate action and environmental sustainability by 2025. And by the end of 2020, we will have aligned all our financing activities with the goals of the Paris climate agreement. As an important first step, we will phase out energy projects that depend on fossil fuels. And we will position EIB as an incubator for green finance and expertise to mobilize others, helping all economies make the transition to a low-carbon future.
As the EU bank, our mission is to invest in Europe’s future, and no issue is more important than climate change. The strength of our resolve reflects the urgency of the climate crisis. Just this summer, countries across Europe suffered through record-breaking temperatures and reduced crop yields, owing to last year’s drought. And many developing countries have had similar experiences. Flooding and other climate-driven phenomena now cost cities billions of dollars every year, in addition to endangering lives. But the climate crisis also represents an opportunity, because funding for new green infrastructure will create jobs, spur economic growth, and reduce the air pollution that is choking the world’s cities.
Changing investment patterns will accelerate a shift away from fossil fuels that is already underway. Market forces are increasingly favoring clean energy over fossil fuels. More than half of the coal-fired power plants in the United States have been retired since 2011, and the country is now home to 3.3 million jobs in clean energy, compared to less than 100,000 in coal mining. Moreover, a growing number of US cities and states have committed to reaching net-zero emissions by 2050. They will have the support of Beyond Carbon, an initiative launched by Bloomberg Philanthropies last year to advocate for full decarbonization of the US economy.
As an international community, we must not only increase investment in clean energy, but also cut funding for dirty energy. As matters stand, we are essentially paying to promote climate change and air pollution through fossil-fuel subsidies. Those public funds need to be redirected toward investments in electric vehicles and other game-changing technologies that will drive the green transition. Such investments will have far-reaching returns, not least by reducing the enormous toll that air pollution takes on public health.
Beyond that, there are a number of additional steps we can take to marshal the necessary funding. First, we must improve data and disclosure standards. Because businesses and investors were long in the dark about climate-related risks, they did not see fit to cut carbon emissions or protect assets from extreme weather. That is starting to change. Recommendations from the Task Force on Climate-related Financial Disclosures are helping businesses allocate capital more sustainably, and enabling investors to reward companies that take climate change seriously.
Second, we must clarify the investment risks associated with green finance. Cities are responsible for more than 70% of carbon-dioxide emissions, but only a few cities in the developing world have a credit rating. As a result, overall investment in clean mass transit, energy-efficient buildings, and other projects to reduce emissions have suffered. Governments and public banks can do much more to help cities attract capital for such projects through initiatives like the Global Covenant of Mayors for Climate & Energy, which is supported by the EIB and co-led by Bloomberg Philanthropies.
Third, we need to modernize the electricity grid. Incentives like rebates and tax credits allowed wind and solar power to expand, by driving down costs for businesses and consumers. We should now introduce similar programs to accelerate the deployment of battery storage and other promising technologies geared toward overcoming the problem of intermittency. Furthermore, better grid connectivity would allow regions with surplus wind and solar power to supply those with more demand than supply. Governments can take the lead in both areas to encourage more private investment in clean power.
Finally, we must continue to expand the market for green investments. Since 2007, when the EIB launched the world’s first green bonds on the Luxembourg Stock Exchange, the green-bond market has grown to more than $136 billion. But that is still just a drop in the ocean of the $100 trillion global bond market. Hence, the EIB is helping the EU develop a standard taxonomy for sustainable finance, so that investors can compare apples with apples, as in the case of any standard bond. Better and more information about an investment’s carbon footprint will allow investors to make informed decisions, thereby driving more private investment to low-carbon projects. That is how we finance the green transition.
The New Times – Rwanda
By: Jean Pierre Rwasangabo
As more of our banking is increasingly transacted over the digital space with internet, mobile and agency banking slowly surpassing more traditional channels, there is a realisation that something monumentally transformative is happening to bank branches.
Branches, which have been the brick and mortar of banking for decades, are slowly being replaced by virtual technologies that have not only reduced the cost of operations for banks but are also fundamentally transforming customer experience.
As millennials and Generation Z begin dominating the formal and informal workforce, they are demanding a financial sector that is in line with their modus operandi which can be summarised as quick, seamless and tech-biased.
This therefore paints a gloomy picture for traditional banking setups that have for so long relied on low tech branches for their front office function.
With a growing number of tech companies taking a pie off branches’ core services such as deposit taking and cash withdrawals, it’s become vital and almost urgent that branches redefine themselves.
Facebook, with its Libra currency, will seek to harness the company’s 1.6 Billion active users to capture the ever-growing online shopping and payment segment but also money transfer services further affecting key product lines like cards and Western Union that have been, for almost two decades now, major income lines for bank branches.
In fact, research by the US Federal reserve found that older, wealthier and self-employed individuals are more likely to use bank branches than other customers. It goes without saying that the old, wealthy and self-employed form a tiny fraction of our demography.
In the UK, research indicates that 34% of all branches have closed in the past five years alone. That number will reach 49% by 2021, meaning in less than a decade, half of all branches in the UK will close their doors.
In the US, Capital One which visions itself as a “tech company that does banking competing against banks that use technology” has pioneered café style branches in place of traditional branches were clients get answers to questions and manage their finances in a casual, relaxed atmosphere with open layout “designed to facilitate discovery, conversations, hospitality, education, and community events,”.
Close by, Kenyan banks closed almost 40 branches nationwide in 2017 leading to the loss of 1,700 jobs.
So, is it doom and gloom for branches? My answer is a firm MAYBE.
Branches will have to reinvent and retool if they are to survive the next one to two decades. As repetitive tasks that currently take so much of branches time and resources become digitised, branches will have to come up with new ways to generate fees and commissions and thereby justify their continuous existence.
For this process to be achieved, a two-pronged strategy will have to be adopted. A human capital strategy but also a business model strategy.
Bain & Company, a leading Boston based Management Consulting Company, summarises the human capital element quite eloquently “How a bank manages employees through the branch evolution will make the difference in how fast it can progress.
Reducing headcount gradually becomes less important than redeploying employees in ways that will build a superior experience.
Employees will play different roles, with many moving from narrow service or sales positions to broader, digitally fluent relationship coaching roles, both within the branch and outside its four walls through video chat and other virtual channels.
With this in mind, banks should start planning for the new skills, training, incentives and behaviors required. The playbook for new employee functions includes training to upgrade skills, both technical and coaching-related”.
The bankers of the future will be highly skilled financial advisors, cross sellers and relationship managers. For this human capital evolution to take place, significant investment both in time and money will have to be brought into play.
Clear and STP (Straight Through Processing) will have to be at the center of all key processes in bank branches. The era of sluggish systems with high downtime is long gone and frankly speaking intolerable to tomorrows customers who will more likely be young, tech literate and well-travelled.
Branches will ultimately become a place where tech leveraged self-service platforms will exist side by side with highly skilled bankers providing advisory, education and transaction assistance for high value transactions.
To quote Bain & Company again “Bank branches are by no means dead, but many in their current guises have become obsolete. The network has to change faster and more substantially than most bankers acknowledge.
Banks that accelerate their branch transformation can not only mitigate the threat from technology firms but also pass their competitors, delight customers, and achieve stronger, more profitable growth”.
This combination of human and business modelling cohesiveness and integration will play a pivotal role in ensuring not just the survival of bank branches but also the banking sector as we currently know it.
The fact that branches are going to go through a radical transformation in the next few years is quite frankly unassailable.
So instead of a fully digitized bank, I foresee a combination of clicks and bricks, a mix of physical and digital that benefits clients. There are a few examples of digital-only models globally that have since evolved into a physical presence. One must exist with the other.
Oh, and Facebook’s Libra will become operational in 2020. Tick Tock Tick Tock…….