Bank led by Kenyan banker James Mwangi injects $4.6 billion to drive African recovery and resilience

Equity Group, a financial services conglomerate headquartered in Nairobi and led by Kenyan banker James Mwangi, has committed over Ksh700 billion ($4.6 billion) to bolster the African continent’s recovery through a stimulus package designed to aid recovery from the dual challenges posed by the COVID-19 pandemic and the Russia-Ukraine war.

The Africa Recovery and Resilience Plan, a private-sector-focused initiative launched in March 2022, has taken center stage in Equity Group’s efforts to expedite economic recovery and build resilience in East and Central Africa. Mwangi, the managing director and CEO of Equity Group, shared details of this ambitious plan during a recent interview in Kenya.

Mwangi emphasized the need for a coherent approach to transform Africa, one that involves collaboration, cooperation, and leveraging each entity’s capabilities and competitive strengths. He expressed the belief that by working together, they could propel Africa towards a brighter future.

Building regional strength and capacity

The Africa Recovery and Resilience Plan, primarily targeted at East and Central Africa, seeks to enhance regional strength and capacity to withstand future shocks. It aims to contribute to economic recovery, foster growth, generate employment opportunities for the youth, and create new markets for local producers.

A key feature of the plan is the provision of financing, amounting to up to two percent of the combined GDP of the six economies where Equity Group operates. This financing will be blended financial instruments, including short-term overdrafts, medium-term loans, and long-term project and development financing.

Equity Group’s vision for the plan is to catalyze a socio-economic transformation of the region in a socially ethical and environmentally sustainable manner, with sustainability and governance as its core principles. The plan places a strong emphasis on inclusion, ensuring that no one is left behind.

Mwangi believes that the plan’s impact will manifest through increased income from value addition of resources like minerals and agricultural produce, greater employment opportunities for African youth, and the formalization and capacitation of SMEs. Additionally, technological advancements will play a pivotal role in realizing the plan’s objectives.

International collaboration for the plan’s success

Equity Group has secured the support of 16 development banks that have joined forces to adopt the Africa Recovery and Resilience Plan. The collective goal is to raise at least $13 billion to implement the plan and drive the continent’s recovery effectively.

Despite a challenging macroeconomic environment marked by high inflation, elevated interest rates, fluctuating exchange rates, and the depreciation of emerging market currencies, Equity Group, under the leadership of Mwangi, reported a significant 7.8-percent increase in profit. In the first half of 2023, the group recorded a profit of Ksh26.33 billion ($182.8 million), compared to Ksh24.43 billion ($169.6 million) during the same period in 2022.

As a result of this robust performance, Equity Group witnessed a 23-percent increase in total assets, growing from Ksh1.447 trillion ($10.05 billion) at the start of the year to Ksh1.644 trillion ($11.4 billion) as of June 30. Retained earnings also expanded, solidifying Equity Group’s position as one of Africa’s most profitable lenders, with retained earnings reaching Ksh199.94 billion ($1.38 billion).