As Brexit threatens, Absa Bank opens Africa to UK investors

"Real growth opportunity" for UK investors in Africa

By David Beach | 19 September 2018

Last week Absa Bank, one of Africa’s largest diversified financial services groups, launched its UK office.
The move supports the group’s ambition to open Africa to the UK and Europe as the preferred corporate and investment banking partner, even if trade relations between the UK and Europe seem to be heading for a no-deal; the group described the move to the UK as coming at “an opportune time” in the launch statement.
“The Africa-UK trade corridor is historic. We’ve found a renewed interest in Africa on the back of Brexit. Multinational corporates are asking how they might protect themselves from Brexit,” Cheryl Buss, head of global clients, told bobsguide at the London launch following a welcome from Absa’s chairman, Wendy Lucas-Bull, as well as Charles Bowman, the Lord Mayor of London.

“During her trip to South Africa," said Buss "Theresa May was very clear around encouraging UK-Africa business and opening the trade corridor to the continent. Absa is the face of Africa, we’ve launched in London to be close to the decision makers.”
According to a recent report by Accenture, Sub Saharan Africa (SSA) is home to approximately 856m consumers who spent $600bn in 2010. That figure is predicted to rise to $1trn by 2020. As such, Africa presents an unparalleled alternative opportunity for investors planning their strategy post Brexit.
The continent has seen emphatic foreign investment throughout the 2000s, with a fivefold increase between 2000 and 2008, standing at $72bn in 2008.
“Across the world there’s reinvigorated investment into Africa,” said Buss. “China last week announced it is increasing its investment to $5bn, while we’re seeing a lot of political alliances from India, resulting in economic benefit. These countries see Africa as a great long term growth opportunity.
“The obvious example is mining, but once you get the ore out of the ground, what are you going to do with it? You need the infrastructure and that’s why we’re seeing early headway in roads, rail and port construction.”
According to the same Accenture report, that population figure is set to rise to 1.3bn by 2030 in SSA, thanks in large part to innovations and investment in agriculture.
“Africa has the world's largest arable land,” said Buss, “but is currently farmed by small scale commercial subsistence farmers. With current food shortages, investment in agriculture becomes critical.”
It is here that Buss places the opportunity for UK investors as well as the continent in general. With a high youth population migrating to urban centres, it creates an emergent workforce ready to man new ventures.
But for Buss, fintech plays an unlikely role in the overall development of the continent: “Fintech is also crucial to talks between government, banks and corporates to encourage the fourth industrial revolution.
“Although Africa needs infrastructure, in fintech we’ve actually leapfrogged the world, particularly in mobile technology. It’s perfect breeding ground for further development.”
It is a complimentary crossover between fintech and the emergent sectors that provides a robust advantage for the continent.
She relays how small-scale farmers rely on their mobiles to upskill and how some FMCGs and telcos provide tips via SMS to help with farming and providing micro-insurance: “In this respect, agriculture and fintech, innovators in mobile technology, are actually coming together to develop both sectors to the benefit of the entire continent.”


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