Equity, KCB, Commercial Bank of Africa, Fina, Diamond Trust Bank and Co-op Bank are some of those that have their eyes set on the regional front. Why??
IMHO its a case of belated realization. Ecobank, Bank PHB, Standard Bank and others all caught the E.Africans sitting pretty in their home market comfort zones; seemingly unaware of globalization or even of economic Pan-Africanism. So, in the West, North and Southern African players came, set up shop (in East Africa) and destabilized the home markets of the E.A players.
Belated realization aside, Kenya's 2007 chaos helped us step down from the hubris. The importance of geographical diversification became blatantly obvious for all when the safety zone of Kenya crumbled and few businesses had a foreign operations buffer.
I'm thrilled that regional play is the day's bandwagon. For a while regional operation has been a key issue in my stock picking. As you might imagine it's a criteria that left me with only a handful of stocks to pick from - not even the much acclaimed Safaricom passed this screen. ---Ok I did put up some cash in it but I got out in the first week of listing.
The more important lesson here is that we're not a unique heaven. Too often I hear of how unique the market here is and of its "peculiar habits". The seasoned traveler will tell you of the numerous similarities that exist especially with other developing nations.
The Regional Rush brings numerous things into question, will it work? Is it being done right? Is consolidation of the asset base (M&A) a necessary integral part of the process? Are our organizational cultures supportive or will they inhibit the expansion drive?
The regional move is a step in the right direction but our management practices must also step up. Innovation and not reaction to market-place events is key once outside the home market.
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