Im­por­tance of min­ing and crit­i­cal­ity of free cap­i­tal flows – Leina Gabaraane

Zambian Business Times - - MINING - - ZBT – Lead An­a­lyst

Crit­i­cal­ity of free cap­i­tal flows and for­eign di­rect in­vest­ment

He high­lighted also that African coun­tries were in com­pe­ti­tion for cap­i­tal re­sources from po­ten­tial in­vestors and that this ap­petite was to fos­ter the req­ui­site in­vest­ment to spur eco­nomic growth through em­ploy­ment cre­ation. “That is why to­day we had a podium of 5-6 African coun­tries, each one of them say­ing ‘we are the best, come to us'” he said. It is com­pet­i­tive­ness that then forces gov­ern­ments to start think­ing more ‘free cap­i­tal mar­kets’ and con­ducive en­vi­ron­ments man­i­fest­ing through ease of do­ing busi­ness. That is a very im­por­tant fac­tor be­cause it forces gov­ern­ments to re­al­ize the im­por­tance of mak­ing free com­pe­ti­tion and cap­i­tal flows into coun­tries with in­vest­ment ap­petite. Cap­i­tal flows and for­eign di­rect in­vest­ment are very crit­i­cal in the min­ing in­vest­ment equa­tion, he said. With suf­fi­cient risk ap­petite for min­ing, cou­pled with ded­i­cated teams of sec­tor spe­cial­ists that un­der­stand com­mod­ity cy­cles, we have in­vested over $USD3­bil­lion in the Zam­bian min­ing in­dus­try over the last decade. There is no sin­gle bank in Africa as prom­i­nent as Stan­dard bank in min­ing in­vest­ments. As a group we have strate­gi­cally po­si­tioned our­selves for op­por­tu­nity and part­ner­ships be­cause we rec­og­nize the im­por­tance of min­ing as a GDP driver in African economies a sen­ti­ment we have echoed across all coun­tries we op­er­ate in.

Mean­ing for Zam­bia

We have iden­ti­fied that cop­per and min­ing in Zam­bia are im­por­tant. Other key driv­ers of the econ­omy of Zam­bia are agri­cul­ture which we are big par­tic­i­pants in, Leina said in an in­ter­view. Zam­bia is our home and we drive her growth and as such we un­der­stand that the gov­ern­ment’s as­pi­ra­tion to grow the min­ing sec­tor, cre­ate jobs and wealth. We also un­der­stand that for the gov­ern­ment to re­al­ize it’s dreams or ob­jec­tives in an African econ­omy, it needs cap­i­tal and that’s where we come in. With­out the cap­i­tal that the banks pro­vide the gov­ern­ment will not be in a po­si­tion to re­al­ize it’s dream. That’s the fun­da­men­tal role we play to say: how do we al­lo­cate cap­i­tal op­ti­mally to where it is most re­quired. In this in­stance we be­lieve it is most re­quired in the Zam­bian min­ing sec­tor but there is still a lot we can achieve from it and there is still a lot of ad­vi­sory we pro­vide into it.

Gabaraane high­lighted that Stan­bic was see­ing a re­bound­ing econ­omy on a path to be­com­ing a lead­ing re­gional econ­omy. We want to par­tic­i­pate in all those sec­tors and we be­lieve that we are part­ners to the gov­ern­ment and that’s the role we have to play and grow be­cause Zam­bia is our home, he said.

Mar­ket note

The Zam­bian del­e­ga­tion can be com­mended for send­ing a strate­gic team to pitch op­por­tu­ni­ties at the 2018 Ind­aba. Honourable Yaluma was hon­est enough to ad­mit the fail­ures of gov­ern­ment in the area of poli­cies that should trickle ben­e­fits to com­mu­ni­ties. See­ing Deputy Sec­re­tary to the Cab­i­net Chris Mvunga at a Stan­dard Bank booth was a deja vu of his pre­vi­ous life with Africa’s largest bank. Zam­bia Rail­ways CEO just needed to be present be­cause soon he will be fer­ry­ing 30% more bulk cargo through the re­cent en­acted statu­tory in­stru­ment so the ind­aba should surely give him an idea of the vol­umes to re­ally ex­pect plus net­work­ing with other na­tions rail CEO’s. Dr. Ka­solo re­flected ZCCM-IH while last but not the least Stan­bic Zam­bia CEO seems to have taken up a role just at the right time when cop­per out­look is pos­i­tive and the min­ing ind­aba was one to re-ini­ti­ate him into the in­dus­try. How­ever, Leina is not new to the Ind­aba save pre­vi­ously he spoke di­a­monds when he was CEO for the Botswana op­er­a­tion but this time cop­per and cobalt with be used more in his vo­cab­u­lary. Our min­ing and bank­ing an­a­lysts fore­cast an in­creased ap­petite for min­ing and re­lated sec­tors un­der Leina’s clock as CEO. Our team has rea­son to be­lieve he is ex­pe­ri­enced in the sec­tor. This is a space to watch.

“We don’t just pro­vide cap­i­tal but ad­vi­sory ser­vices as well. Min­ing in its na­ture is highly risky, cap­i­tal hun­gry and volatile. The ques­tion then comes: where is the cap­i­tal? We have it. Is it ready to sup­port such a volatile en­vi­ron­ment char­ac­ter­ized by un­sta­ble com­mod­ity prices – one mo­ment cop­per is up and the other it’s down…We have a ded­i­cated team of sec­tor spe­cial­ists that un­der­stand these com­mod­ity cy­cles and are able to struc­ture deals ac­cord­ingly and pro­vide the req­ui­site ad­vi­sory ser­vices.” Leina Gabaraane Stan­bic Bank Zam­bia CEO

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