In our view, this period should be used to diversify economies via reforms that grow and deepen economies. A lot of attention needs to be given to agriculture, for example, and how African countries can become more self-sufficient in food production in this sector that has the potential to create many jobs.
More focus is needed on domestic manufacturing to reduce high import costs. Local industries also need to be given the incentives to prosper, especially as intra-African and regional trade grows in prominence.
To grow domestic industries and sectors, governments should also be looking at how they continue to support improvements in power supply and how to lower the cost of doing business. Opening up to foreign investment to support specific industries and adopting investor friendly policies will also be vital. In addition the enforcement of regulations as they relate to commercial businesses and local entrepreneurs needs to become more predictable and less burdensome. These changes will encourage the growth of local industries and foster investment, which in turn will assist in overcoming the current short term challenges faced.
Encouragingly, some governments are expressing support for these and other policies that will diversify their economies. What needs to happen now, however, is execution in a coherent and consistent manner.
The private sector, however, cannot sit by and wait for all of this to happen. As a bank which calls Africa home and places it at the core of our strategic vision and thinking, Standard Bank remains committed to supporting our private sector clients through the current short term challenges.
We will facilitate this by providing advice and credit where appropriate, to support growth in our African markets. We know that many of our clients – with our support – have operated in these markets for a number of years and their resilience will be rewarded. There is no doubt many countries and businesses need to adapt to the current conditions, which include a severe drought in certain regions on top of the commodity price decline. However, what is evident is that the continent cannot be ‘painted with a broad brush’ – certain sectors and markets remain buoyant and there are still bankable opportunities.
Strong sector expertise, a footprint across 20 countries, a network of experts on the ground linked to the main financial centres of the world and the experience garnered by banking in Africa for more than 153 years will assist Standard Bank to support its clients on their long-term growth journeys.
The sustainability of our own business depends on our support for profitable firms and we therefore remain committed to supporting the sustainable development of industries across the continent.
Guest Contributor: Victor Williams
Head, CIB, RoA, Standard Bank Corporate and Investment Bank