Tuesday, November 28, 2023

Standard Bank says Africa is still a destination for long term investments

Standard Bank recently hosted the 6th Annual Africa investors’ conference (AIC) in London under the theme ‘Africa still offers opportunities for investment.’ The conference according to information from Standard Bank attracted more than 190 investors representing over 100 companies. More so, 43 corporates from a broad range of sectors, including financial services, mining, construction, chemicals, hotels, leisure, telecoms, food and retail also participated in the conference. The information from the bank cites perspectives from various industry titans regarding the opportunities offered by Africa.

A matter of interest was the participation of South Africa’s Finance Minister Parvin Gordhan given the developments that unfolded the past months in the country. South Africa has been fighting bullishly to prevent a credit rating downgrade to junk status. Such a downgrade would increase borrowing cost should South Africa require external loans. The volatility in South Africa has since the end of 2015 received an overarching attention with fears that the superpower economy of Africa will suffer particularly at a time when economic growth is stunted. In fact a previous report by stanbic Bank characterised the current economic condition as that of poor growth. The report estimated that drought will reduce the Gross Domestic Product (GDP) growth by 0.4 percentage points in 2016. It generally anticipated growth of 0.6 percent and 1.2 percent for 2016 and 2017 respectively.     

Gordhan as the Bank reports reiterated the narrative of the AIC that ‘Africa still offers opportunities’ and perhaps did so given the positive developments that surfaced from the South African economy. The report had cited that “there appeared to be life returning to sectors within the South African economy which have been struggling,” adding however that this rebound is off a very low base. Gordan is quoted saying that there were many remarkable success stories of South African companies that had expanded into Africa and hoped that recent events, such as Brexit, would not have an enduring impact on emerging markets, including Africa. The Stanbic report had compiled an analysis on different African countries, to which it described Botswana as undergoing challenging times. 

Notwithstanding such developments, the continent remains an attractive destination as private capital continues to flow into the continent. Head of Africa Equity Sales at ICBC Standard Bank Matthew Pearson stated that feedback was received from one particular investor, who said “three days of intense meetings at the AIC is literally equivalent to him having to spend three weeks travelling across the continent.” 

David Munro, Chief Executive, Corporate and Investment Banking at Standard Bank is quoted as saying Africa remains a critical contributor to global growth and commercial opportunities: “over the last two decades, Africa has remained resilient through a number of global crises and its overreliance on Western economic relations has shifted to be more inclusive trade and investment regimes, thereby elevating the continent’s long-term prospects and lowering its dependency on a single region. Indeed, Africa markets may now present an even more compelling alternative investment propositions than in the past.”

The three day conference sought to connect international investors with leading policymakers and some of Africa’s most successful companies, sharing plans and ideas with a view to finding key opportunities for growth on the continent. It is said that this was achieved through one-on-one and small group business meetings that allowed participants to interact and discuss investment opportunities in the continent. 


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