SA ‘must not be arrogant with Africa’
16 January 2014
by Mark Allix
Standard Bank joint CEO Sim Tshabalala has warned South Africa not to be arrogant in its dealings with the rest of Africa.
This comes as South African companies target young and increasingly well-educated populations that are driving new consumer markets on the continent.
Standard Bank, Africa’s largest banking group by assets, is continuing to look for opportunities as the depth and liquidity of African markets increase.
Mr Tshabalala said on Wednesday the group was "very bullish" on prospects for the continent, despite the "up and downs" of doing business in Africa. But he said lenders needed to be alert to rapidly rising cybercrime, including in South Africa, and drags on African growth such as reduced trade and development aid from struggling European Union countries.
Mr Tshabalala was speaking at the Industrial Development Corporation (IDC) offices in Sandton on Wednesday at an Africa Frontiers Forum event, where minister in former president Nelson Mandela’s government, Jay Naidoo, told delegates that only democracy could support sustainable economic development.
Mr Naidoo, now a private businessman, also said the pre-election promise by the African National Congress of the creation of 6-million jobs over the next five years was not feasible in the context of further expanding the public sector and boosting the provision of social grants.
But in holding leaders in Africa accountable, countries — including South Africa — would need to further strengthen their democratic institutions, as politics, red tape and corruption remain major obstacles to economic growth.
However, Mr Tshabalala said regulatory environments in Africa were improving. And with growing urbanisation and literacy, proposed free trade among various African blocs by 2015 would help attract foreign direct investment, facilitate economies of scale, and lower the costs of trade.
While critics contend that African economies were overheated and lacked internal growth engines beyond commodities trade, the advent of freer and better regulated regional economies, new African oil and gas finds, and the potential for South African shale gas should help alleviate the longer-term effects of a slowing growth trend in China.
Mr Tshabalala said research by the Economist Intelligence Unit indicated that demand for financial services in Africa would outstrip growth in gross domestic product by a factor of 1.5 times. With overall growth on the continent forecast to remain at about 6% this year, there is "a great deal of money to be made in African banking".
BDlive