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Collaboration between banks in Portuguese-speaking countries


by Dr Luis Ritto

In December 1990, a group of savings and development banks from the world's Portuguese-speaking countries and territories (including Angola, Mozambique, Cape Verde, Guinea-Bissau, STomamp; Principe and Portugal) founded the 'Grupo de Coopera de Lingua Portuguesa' (GCLP). The objective of the association is to encourage collaboration among the institutions concerned, with a focus, among other things, on helping the African banks to reform their financial systems in accordance with modem international standards of operation, and to adapt to prevailing market conditions.

This initiative has resulted in a number of specific actions in favour of African savings banks, carried out under the aegis of Portugal's largest savings and credit institution, the Caixa Geral de Depositos. Thus, for example, 40 head-office and branch managers of the Banco Popular de Desenvolvimento de Mobique are undergoing a training programme which began in 1991 and is due to be completed at the end of this year. The final stage will be a course in Lisbon for the 'top ten' managers identified on the programme. The Caixa Economica de Cabo Verde has also received technical and training assistance including considerable legal support and help in diversifying the range of financial products available, while the Caixa Popular de Sao Tomamp; Principe has benefited from a training programme as well as technical assistance in modernising its statutes and services.

In addition to these main programmes, a number of other projects have been developed by Portuguese savings banks in Angola and Guinea-Bissau. These cover such diverse fields as institutional reform, legal and training assistance and the design of financial instruments for the private sector (especially geared to small and medium-sized enterprises).

At a general meeting of all GCLP institutions held in Lisbon in May, the African banks praised the 'tailor-made' assistance they had received from their Portuguese counterparts. They also stressed a desire for the example to be followed by other EU Member Stat=. There is a distinct shortage of banks operating efficiently in sub-Saharan Africa, especially when it comes to attracting the savings of ordinary people for on-lending to investment (as opposed to commercial) schemes. The support of the Portuguese institutions was recognised as a step in the right direction which could help African banks to become more efficient and better oriented towards the development needs of their local communities and countries.

The Lisbon meeting was attended by the author of this article (from the European Commission) and by a representative of the World Bank. The idea behind this was for participants to learn about the projects that these two organisations are developing in Africa and to examine the possibilities offered by the Commission and the Bank in helping financial institutions in Portuguese-speaking Africa to obtain technical assistance and credit lines for private-sector-oriented projects.

In fact, the African members of the GCLP have already recognised the importance of private-sector promotion for the sustainable development of their countries and they are keen to take the lead in providing support for the productive sectors of their economies. To do this, however, they need technical and financial assistance from the EU and the World Bank. A point of particular concern that arose during the discussions was the view that the EC's 'PALOP' Regional Programme' does not fully take account of their needs. In addition, at this stage the indicative programmes of most countries under LomV's first financial protocol are almost fully utilised, obliging them, until new indicative programmes are approved, to look for alternative sources of funding.

On the latter subject, the GCLP members decided to continue their discussions with the European Commission and other international donors. For this purpose, new meetings of the GCLP group with the European Commission were set up for Cape Verde in September 1994 and Angola in January 1995. The hope is that, in the meantime, the different governments of Portuguese-speaking Africa will have been sensitised to the needs of their banking and private sectors and that this will be reflected in the forthcoming PALOP regional and country programmes, to be negotiated with the European Commission during 1995.

L.R.