Standard Bank’s Africa-China trade and investment corridor unlocks Africa and China’s full potential
Africa is virtually unrecognisable compared to even 10 years ago, largely due to the continent’s ever-deepening partnership with China. China’s trade with Africa increased from $100-billion in 2007 to $175-billion by the end of 2017. Chinese foreign direct investment stock in Africa has grown at twice this speed, and is now approaching $35-billion, while total Chinese concessional lending to Africa exceeds $100-billion.
The result is that across Africa and China a vast range of business activities, relationships and transactions are redefining the scale and flow of global trade within what Standard Bank calls the Africa-China trade and investment corridor.
Every day African traders travel to China or transact with suppliers or receivers of goods. Chinese travel to Africa, setting up or operating businesses across the continent. Africans importing goods from China expand crossborder and regionally across the continent, supported by their Chinese suppliers. Chinese multinational companies operating in Africa need to transact in — and between — African countries. African governments and multinationals sign construction deals with Chinese suppliers. Chinese companies building infrastruc- ture develop and rely on African suppliers and contractors to support and implement projects. As more Chinese businesses engage in local beneficiation, the quality and sophistication of goods being exported by Africa to a wide range of global markets is increasing.
Over a decade ago Africa’s largest bank by asset, Standard Bank, recognised the significance and the opportunity that Africa and China held for each other. “The strategic decision to nurture, facilitate and grow this relationship — so critical to the growth of the bank, the development of our continent and the geostrategic ambitions of China — is a key element of our vision,” said George Lo, executive head of Pan-Africa China Banking for Standard Bank Group. While at group level this involved developing a strategic partnership with the Industrial and Commercial Bank of China (ICBC), at an individual level this meant building the full universe of transaction capabilities in and across Africa for both African and Chinese clients, across all client segments.
Capabilities include opening a current account in Chinese, assisting African businesses expand cross-border, importing or exporting goods to China, managing telegraphic transfers, negotiating letters of credit and buying foreign exchange. “Standard Bank is today a leading provider of trade solutions in Africa, financing and developing the entire import-export value chain between Africa and China,” said Lo.
Elements of the broader financial ecosystem that support the myriad of relationships and transactions that constitute the AfricaChina trade and investment corridor include:
• SHYFT, Standard Bank’s global digital wallet for Android and iOS, allows foreign currency purchasing and trade — all from a mobile phone. Clients and customers throughout Africa and in China can use SHYFT to send, spend, store or exchange funds in dollars, euros, pounds and Australian dollars.
• In addition to enabling direct renminbi clearance and trading, Standard Bank’s strategic partnership with ICBC means that beneficiaries who are ICBC account holders receive preferential rates.
• Today Standard Bank’s Personal and Business Banking division alone has more than 30 Chinese-speaking bankers across 15 markets acting as relationship managers; many of them are Africans who speak Chinese. Chinese-speaking bankers deliver Standard Bank’s broader panAfrican and global capabilities in Chinese to individual as well as small and large commercial Chinese enterprises operating in individual African countries, between African countries and between Africa and China.
• Across the whole bank there are over 100 Chinese-speaking relationship managers, bankers and advisors, including Chinesespeaking traders on the bank’s trading floors.
• Standard Bank recently launched its first Africa China Banking Centre (ACBC) in Johannesburg. ACBCs, manned by Chinese-speaking bankers, are one-stop-shops for businesses and individuals seeking to transact in, across and out of Africa. More ACBCs are planned for Kenya, Uganda and Tanzania in 2018, with other countries to follow thereafter.
• Standard Bank is working on several value propositions in the card space, looking to allow businesses and individuals to transact in a simpler, more efficient manner across its geographic footprint.
In short, the range, scale, technology and volume of everyday transactions that support these relationships is transforming both Africa and China, daily deepening the mutual relevance of both ends of the Africa-China trade and investment corridor.
By building the financial structures, deploying the skills and evolving the platforms and technologies, Lo said: “Standard Bank is supporting and growing the ability of Africa and China to realise the full development potential that we have in each other.”
“Standard Bank is today a leading provider of trade solutions in Africa, financing and developing the entire importexport value chain between Africa and China”