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News Curated by Chief Executive of Standard Bank, South Africa

Important Highlights from WEF Africa

WEF Africa

A key component of WEF Africa was establishing where Africa’s macro-economy is headed. This topic was covered through a panel discussion exploring the comprehensive economic outlook for the continent. WEF Africa, which took place in Cape Town, was disrupted by major protests demanding that South African President Cyril Ramaphosa respond to the crisis of widespread violence against South African women. WEF responded to the protests in real time by convening a special panel discussion on what can be done to address gender based violence. An interactive session explored a key driver of international investment into Africa’s huge infrastructure projects asking whether Africa could implement and deliver the promise of these megaprojects. The challenges identified were that these projects can go off the rails in terms of budget or time or both. 


Africa’s Biggest Firm Lists in Europe


South African e-commerce group Naspers listed its global empire of consumer internet assets under the name of Prosus – and the jewel in the crown is a 31% stake in Chinese tech titan Tencent. The spin-off in Amsterdam marks the end of an era for Naspers as it looks to move beyond the legacy of former CEO Koos Bekker’s prescient investment of just $34 million in Tencent when it was a startup in 2001, one of the most lucrative bets in corporate history. The stake in Tencent, the world’s biggest videogame company and home to the hugely popular WeChat social media platform, is now worth $130 billion and has buttressed Naspers’ rapid growth towards becoming Africa’s most valuable listed company. Due to that holding, Prosus should have a market value of more than $100 billion in one go, which would make it the third-largest stock on the Amsterdam exchange after Shell and Unilever, and Europe’s No.2 tech firm after Germany’s SAP. 


Exclusive: Sola David-Borha on Technological Innovation

Sola David-Borha sat down with Sola David-Borha, Chief Executive, Africa Regions Standard Bank at the 2019 World Economic Forum Africa in Cape Town. David-Borha oversees Standard Bank in 19 countries across the African continent, including East, West, Central and Southern Africa.  She speaks about convergence of technology and how to remain relevant. Standard Bank is bringing fintech innovation into its fold through a variety of cutting edge investments that include mobile banking in Ethiopia and value added services for digital payments, as well as cloud computing partnerships with Amazon Web Services and Microsoft. The African Continental Free Trade Agreement, according to David-Borha, has good prospects for being adopted, and in turn, playing an important role in unifying the continent for the mutual benefit of all of its economies. She commented on the importance of infrastructure investment, both traditional as well as digital, in order to achieve the continent’s full economic potential.


ROI on Human Capital

ROI on Human Capital

Last year, WEF introduced a new methodology to the Index which strengthens the importance of “the role of human capital, innovation, resilience and agility” in the context of the technological changes prompted by the Fourth Industrial Revolution. Unfortunately, the new methodology has not dramatically led to an improvement in Africa’s performance. With an average score of 46.2, sub-Saharan Africa has the lowest GCI score among all regions, and demonstrates the weakest average regional performance in 10 out of 12 pillars. Yet despite traditional weaknesses, innovation and the potentially exciting transformations of the Fourth Industrial Revolution can still play their part in the continent’s future, according to the report’s authors. Kenya is developing into a strong innovation hub comparable to South Africa and Mauritius. Some of the continent’s improving metrics “herald the possibility to leapfrog, by more adeptly tapping into digital business models and private sector development,” says the report.


Impact Entrepreneurs in Africa Will Continue to Rise

Impact Entrepreneurs

There has been an explosion of African startups all over the continent, and investors are missing out by looking for the same business models that work in Silicon Valley being run by people who can speak and act like them. In South Africa, empowerment funds and alternative debt fund structures are dedicated to investing in African businesses, but local capital in other African countries may not also be labelled or considered impact investing, but they do still invest in job creation and provision of vital services. The emergence of National Advisory Boards for Impact Investing in South Africa and social economy policies white papers being developed; are all good news for social entrepreneurs.


Africa’s Investment Potential

Africa’s Investment Potential

With a population of over a billion people, rapid urbanisation and accelerating economic growth, the African market presents a valuable proposition for Japanese investors. Key to maximising the benefits of this investment, is being able to identify the correct opportunities. Standard Bank has been at the forefront of major developments across Africa. Among the key growth sectors that have been identified is oil and gas. As Africa’s largest bank, Standard Bank, is ideally placed to deliver on its purpose of “Africa is our home. We drive her growth.” With a local presence in 20 markets across the continent, and a history spanning over 156 years, the bank is the ideal partner to assist international clients negotiate the intricacies of doing business in Africa.


Ethiopia is Open for Business

Next WEF 2020

Ethiopia will host the Next WEF Africa in 2020, and a“framework for cooperation” should be a central theme for that conference. The country – a leader in the establishment of ACFTA – is pushing hard to industrialise by liberalising aspects of its economy, among the fastest-growing in the world over the past decade. East Africa is drawing attention as regional firms seek to expand in Ethiopia, the likes of Standard Banks, Credit Suisse and Citigroup have already made inroads. The Horn of Africa nation has the continent’s second-largest population and an economy the International Monetary Fund predicts will expand more than 7% a year through 2024. Telecoms, financial services and fintech, consumer goods and infrastructure are industries where there are exciting opportunities.

Source: EWN

A SWOT Analysis of Intra-trading in Africa

Intra-trading in Africa

In a report earlier this year, the International Monetary Fund dubbed the free-trade deal a “game changer” if African governments are able to bring down tariffs and boost trade within the continent. Beyond the sizable political and bureaucratic hurdles standing between governments and the implementation of the deal, there are broader challenges vexing African economies. By some calculations, the continent needs to generate a million jobs a month to satisfy the demands of a booming generation of young people desperate for employment — and to ensure that what could be a demographic dividend doesn’t become a dangerous liability. Africa needs an estimated $90 billion-100 billion a year in investment in infrastructure, including a huge expansion of its woeful power supply. A more integrated African market only raises the stakes for what some have dubbed a new “scramble” for Africa. China’s ever-expanding footprint on the continent has provoked frequent complaints of neocolonialism. But there’s also been a flurry of recent investment and engagement from India, Japan, Turkey and Brazil, as well as the major powers of the West. This, ultimately, may be a boon for Africa.


Creating Enabling Environments for Africa’s Entrepreneurs

Global Entrepreneurship Monitor

According to the 2018/2019 report from the Global Entrepreneurship Monitor, African countries such as Angola and Madagascar have some of the highest rates of entrepreneurship in the world. These entrepreneurs often operate on an informal, micro-enterprise scale, however, and their contribution to economic activity is minimal. This is a shame because, excluding South Africa, most industrial sectors in Sub-Saharan Africa are not dominated by large firms that tend to keep entrepreneurs at bay in more advanced economies, thus presenting opportunities for significant growth. Although foreign multinationals have (and are already playing) a key role in GDP growth in these countries, the tendency to repatriate their earnings ultimately diminishes their contribution to local gross national income (GNI). Furthermore, these businesses are often attracted to larger, better organized markets on the continent, where they can readily capture value using products and processes developed in their home countries. This leads to a scenario where residents in larger African cities have access to much of the same products and services one might obtain in the developed world, while outside these regions, residents are left to deal with the consequences of commercial neglect.


Brexit’s Implications on the Commonwealth


The United Kingdom (UK) has agreed to an economic partnership agreement with the Southern African Customs Union and Mozambique that will allow business to keep trading freely after Brexit. This agreement will be subject to final checks before it is formally signed, and allows businesses to continue to trade on preferential terms with South Africa, Botswana, Lesotho, Namibia, Eswatini and Mozambique. The SACU+M nations are an important market for UK exports of machinery and mechanical appliances worth £409 million in 2018, motor vehicles worth £335 million, and beverages including whisky worth £136 million.


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