By Philip Myburg
Technology, presence and global reach define continent’s future trade ecosystem
Delivering on Standard Bank’s ambition to build Africa’s dominant business trade platform is not as unlikely as many may think. As a bank committed to driving Africa’s growth, for decades Standard Bank has steadily expanded its footprint and deepened its reach and capability across 20 African territories. Today, the bank is the largest by assets in Africa. Through Standard Bank’s equity partnership with the Industrial and Commercial Bank of China (ICBC), the biggest bank in the world, the Group represents a formidable continent-wide banking ecosystem, driving Africa’s growth by linking Africans to each other – and Africa with the world.
To date much of the Group’s effort has, correctly, focused on the banking value chain, supporting trade within markets, cross-border and globally at a transactional level. Philip Myburgh, Head of Trade and Africa-China at Standard Bank’s Business & Commercial Clients’ (BCC) division, believes recent developments inside and between African countries – and the world – present a powerful argument for the emergence of a dedicated end-to-end trade practice serving the entire African business value chain.
On the opportunity side: Rapidly growing markets in East and West Africa. Expanding inter and intra-regional trade. Recovering global trade driven largely, though not exclusively, by China. The broadly ratified African Continental Free Trade Area (AfCFTA). The re-emergence of global growth post-Covid. These all combine to present Africa’s small, medium, and larger businesses with a trade opportunity set to re-ignite the African growth story and sustain growth for generations to come.
On the challenge front: In a world where local and global supply chains have been disrupted customers face new and complex risks. Understanding and successfully negotiating new global trade and supply realities requires advanced knowledge, presence and access to agile global networks supported by much more advanced connectivity technology.
Beyond merely facilitating transactions, taking a more holistic view of trade across 15 of the continents’ most active trade markets presents BCC an opportunity to leverage its developed local, continental, and global ecosystems to intervene strategically at critical points along Africa’s trade value chain. By deploying and expanding its existing presence, networks and insight, BCC can link, inspire, support, fund and grow the ability of African businesses to leverage trade for multifactor growth.
Strategically, much of this ecosystem is already at hand.
Standard Bank has already built, and is successfully enabling, strategic African trade corridors.
Built in partnership with ICBC, Standard Bank’s Africa-China trade corridor solutions were designed to give practical force to the African growth narrative of the last decade. In addition, the bank’s long-established Europe and United States trade corridor capabilities have deftly equipped Africans to access key developed economies, and the developed West to access Africa for generations.
When the benefits of the AfCFTA gain traction Standard Bank’s established trade ecosystem will equip customers to access and expand Africa’s estimated USD 70 billion annual trade opportunity.
Unparalleled African and global networks
Standard Bank’s broad network of large African corporates, cross-border and regional businesses and global multinational clients operating across the continent provide a privileged view of African opportunity. This network also provides access to an ecosystem of producers, suppliers, vendors and off-takers – across Africa and, through ICBC, around the world. The bank’s ability across these value chains, combined with capital and ready-made trade solutions, provides a huge opportunity to take small, emerging and even larger local and regional trade clients up the growth and diversification ladder.
A trade platform business
Combining Standard Bank’s full suite of trade support, technology, capital and insight into a single well-coordinated ecosystem will build a trade platform business unrivalled in Africa.
These strategic advantages are augmented by a host of well-functioning and expertly targeted trade solutions developed to address customer pain points and sustain the expansion of African trade.
Trade Club and Trade Suite provide customers end-to-end trading, import/export, financing, shipping, customs and foreign exchange capability.
The Africa-China Import Solution supports the sourcing and importing of quality-controlled and price-compared goods and services from China, including everything from letters of credit to customs to logistics and payment. The entire process is conducted remotely without customers never having to travel to China – or even go into their local bank branch.
Another pain point for many African traders, importers, exporters, and businesses is transport. Specifically, the cost of trucks. Working with ICBC, Standard Bank negotiated a specialised transport solution with Sino Truck, one of China’s largest heavy vehicle suppliers. By supplying more affordable trucks supported by better payment terms while also providing financing solutions, Standard Bank helps customers raise the capital and secure the forex to purchase the trucks.
On the export side, Standard Bank takes African nut, wine, seed, chili, edible oil and other agri-producers to the annual Chinese International Import Expo (CIIE) and bi-annual China Africa Economic Trade Expo (CAETE). Attendance pretty much guarantees supply contracts as the full range of Chinese off-takers are present. Standard Bank also hosts quarterly virtual trade match-making events focusing on specific sectors. At these events African producers or exporters get introduced to dozens of potential off-takers virtually, often concluding deals on the spot.
By linking Africans to each other and Africa to the world, Standard Bank is supporting its customers with the world’s largest and most effective African trade ecosystem. It is not beyond the bounds of possibility that this unique and ever-expanding capability will realise Standard Bank’s bold ambition to become Africa’s leading trade bank.
*Philip Myburgh is Head of Trade and Africa-China at Standard Bank’s Business & Commercial Clients’ division