Standard Bank looks to East Africa for growth
Standard Bank CEO Sim Tshabalala sees vast opportunities for the bank to grow within Africa as its home market of South Africa stagnates.
Tshabalala spoke to CNBC Africa on the sidelines of the US-Africa Business Summit last week in Gaborone, where he praised the efforts of African leaders to implement sound economic policy.
“African leaders are listening, and they are acting. There is lots of evidence,” Tshabalala said about developments in East Africa.
Barriers to business in East Africa have been significantly reduced, with the cost of doing business declining and local economies booming. East African economies such as Kenya, Tanzania, and Uganda are growing above 5% annually.
“Many of our clients operating in that region do so as if it was one market. It is cheap to move goods and people around. As a consequence, it is the fastest-growing region on the continent,” he said.
This echoes comments made by Business Leadership South Africa CEO Busi Mavuso.
South Africa has been losing a lot of investments to East Africa. “We are no longer the destination of choice for investors wanting to invest in Africa,” she said.
This is because many local and global investors have lost trust in the country’s growth prospects and the government’s ability to address South Africa’s significant problems.
Mavuso said the government lacks the resources to address the country’s crises but has the necessary policy tools.
Therefore, the private sector can provide the required “fiscal muscles” while the government gets the policy environment right for investments.
Africa provides vast opportunities for Standard Bank and its clients, Tshabalala said, with a growing population that is getting healthier and wealthier.
This provides opportunities for the bank to provide lending for Africans purchasing cars, homes, and goods.
Standard Bank will also look to grow its share in the African insurance market by offering insurance alongside its lending.
“Our job is to marry people who are in deficit that need lending and those who are in excess that need investment opportunities,” he said.
Africa’s growing population and the massive growth of urban areas require investment in infrastructure projects, which Standard Bank will look to finance.
The bank has personnel in major global financial hubs, including New York, London, and Singapore, to facilitate capital flows into Africa from foreign companies and governments.
However, Tshabalala called on African governments to make it easier for companies to do business in Africa.
Governments must reduce tariffs, non-trade barriers, and corruption before foreign companies consider committing capital to the continent.
Tshabalala met with African ministers during the Summit to encourage them to ease trade barriers and make it easier and cheaper to do business on the continent.
