Focus on trade key for African development
Efficient, effective and sustainable trade structures and technologies are central to achieving Africa’s vision for growth and alleviating the poverty that still grips many parts of the continent, Vinod Madhavan, Group Head of Trade at Standard Bank said.
Sub-Saharan Africa is, today, the second fastest growing region in the world– and home to some of the most exciting emerging markets on the planet.
Madhavan, said that these emerging markets, combined with frontier markets of equally great potential, present a future cross-border trade and economic environment that could, one day, emulate Asia in diversity, opportunity and growth.
Economically excluded populations can be rapidly included in meaningful economic participation by growing sustainable and inclusive domestic, regional and global trade value chains.
“Trade has the potential to drive inclusive growth in Africa by leveraging new technologies – especially in information – able to link sustainable African industries with a new generation of global consumers,” Madhavan stressed.
“Now has never been a better time for Africa to sustain growth by taking charge of its own growth momentum, by rapidly expanding the continent’s internal and cross-border cash, trade and securities capabilities,” said Madhavan. This will, deepen local capital markets, enabling the development of sustainable, diversified and inclusive domestic economies through cross-border trade.
To achieve this vision, however, the information that Standard Bank has access to, across its 20 markets shows how important it is that legislators get the cross border and policy basics right. At the same time Africa’s financial institutions should look to developing the digital and sustainability solutions necessary to leverage the continent’s potential.
Speaking on cross-border integration (of production, supply and markets) through trade, Madhavan said it drives the rationalisation of standards, the efficiency and growth of markets, and the diversification of economies, naturally.
“Creating the financial markets that allow this evolution to happen is critical for Africa to successfully claim a greater share of global productivity, and the trade networks that support these,” Madhavan said.
Furthermore, Madhavan added that Africa will not realise the benefits of regional and global trade without, at minimum; liquidity, access to capital, progressive foreign exchange regimes, and clear tax systems.
“Being supported by; rational infrastructure, agile labour policies, relevant education and efficient customs and excise rules coordinated by regional trade bodies, will free Africa to expand growth internally, while continuing to attract foreign investment,” Madhavan added.
From a cash, trade and investment services perspective, Madhavan said Standard Bank is seeing a lot of evolution in digitisation being driven by its clients and their customer.
“Our clients continue to search for operational efficiency (especially in a largely paper intensive Trade finance business) and hence we expect to see increased adoption of digitisation and digitalisation in trade (across the physical supply chain, the financial supply chain and the documents chain). Technologies such as Blockchain naturally lend themselves in realizing benefits from the digitisation of financial supply chain and documents chain (that secures the documents legal transferability while drastically reducing delays in couriering etc.),” he said.
Madhavan added, “since the competitive management of trade information, in the modern age, includes end-users being aware of how sustainably products and services are developed and delivered, businesses also need to develop, clear, transparent and fair procurement and production environments – that are sustainable over the long term.”
Standard Bank as one of the two African banks signatory to the Equator Principles on sustainability in banking and finance is acutely aware of the opportunity that the global sustainability movement offers Africa.
According to Madhavan, Standard Bank is the only Africa bank currently involved in the Sustainable Trade Finance working group constituted by ICC (International Chamber of Commerce, Banking Commission).
“Standard Bank is ideally placed to help Africa achieve this vision by deploying its technological, policy, market and human insights, built up over a 154 years and now present in 20 markets, in the development of a cross-border trade environment that drives inclusive growth and effective global competition in a rapidly changing global environment,” Madhavan concluded.