Oil and gas finds in East Africa have become very attractive to West African financial services firms with these firms starting up divisions there.

With this move, West Africa’s financial services firms want to capitalise in insuring and financing oil and gas projects in East Africa.

South Africa’s banks and insurance companies had also identified this opportunity a little more than three years back.

Insurance firms Ghana Re and Nigeria’s Continental Re have launched new wholly-owned firms in Nairobi in the past 12 months, paying more attention to the oil and gas sectors.

Old Mutual Kenya, a wholly-owned subsidiary of the London and JSE-listed life insurer Old Mutual, has introduced its products in Kenya. It is not clear if it will expand to other parts of East Africa.

Nigeria’s lender, GT Bank, last week said it was acquiring a 70 percent shareholding in Kenya’s Fina Bank with the aim of providing finance in the oil and gas sectors.

Another West African lender, Ecobank, has seen its Kenyan unit, Ecobank Kenya, say it will start an investment bank in the next two months to lend in these sectors.

In 2008, South Africa’s Standard Bank acquired Kenya’s CfC bank with the aim of exploiting imminent opportunities in the country.

In 2011, FNB, a wholly-owned subsidiary of FirstRand, South Africa’s third biggest bank, set up its first branch in Dar Es-Salaam, the capital of Tanzania.

The bank, which already has a presence in Kenya, has plans to expand to Uganda and Rwanda.

It is believed that Kenya and Uganda have about 2.5 billion barrels in oil resources while Tanzania has unprocessed gas resources amounting to 33-trillion cubic feet.

East Africa’s financial services firms have been slow to take up these opportunities because they are not well capitalised and lack appropriate skills.

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