Stanbic Bank's Regional Growth Strategy to Boost Intra-Africa Trade and Sustainability Efforts

This is the second time we are convening East African leadership, both private sector and public sector, to drive growth. So if you look at the last couple of years, one of the greatest architects for change and GDP expansion is Stanbic Bank, and it is the reason why we are convening the East Africa Business Summit in Tanzania. The reason why we are convening the East Africa Business Summit in Tanzania is because we believe that we need to have One of the greatest architects for change and GDP expansion is enhancing regional trade, Africa-wide trade, and East Africa is the catalyst for that. I'll give you some numbers. So trade is growing at between 15-20% in the last three years, and we are now in excess of $10.9 billion. It's a small percentage of GDP. GDP today is closer to $400 billion and across many sectors, manufacturing, goods and services, so you can see that moving across transportations, across many countries, energy and oil and infrastructure, you see that growing as well, and then services and people. And then there's an element of technology that you see being a digital superhighway across the two different markets. So if I look at East Africa in total, I think we are more interconnected than actually you see across many other blocks on the market. So if I think about what would shift the areas of growth, it's always the four big sectors. We have been very large in building the large infrastructure, and whether it's power, whether it's roads, whether it's the digital superhighway, and that drives jobs and opportunities. Then we catalyze through manufacturing that comes in through East Africa, depending on which country, and then finally you look at movement of people and capabilities using technology and jobs creation. I believe that trade today is almost just less than 10 percent of GDP in East Africa. It should be able to achieve a 20 percent by the year 2030. And indeed, that's quite a huge percentage that you're seeing there, Joshua. But let us look at energy investments, and as we explore the role of petroleum resources in the regional energy mix, what strategies do you believe are essential for attracting a private investment in the energy sector? And also, how best do you think, as a standard bank, you can support some of these sectors or businesses that you have here, efforts to ensure sustainability? Let me say that is a very historic, we're living in very historic times, never been actually in the last decade. So most countries start with oil discovery, explorations, and you can see countries with huge hydrocarbons, the crisis we have seen. The good thing about East Africa is that we never were that endured in the past, right? So what you are seeing now running is we've been doing movement of people, basic raw materials, no industrialization in the last decade. Now, with oil and gas coming through, especially the oil in Uganda, in South Sudan, what you're going to see is you're going to anchor. The rails were already developed. This is a very important construct for ourselves. So rails in terms of sustainable financing on these programs that we have in place. And I'm a strong believer that you can be sustainable even by financing complex projects like hydrocarbons in our markets where we are. So that's what Stanbic has been continuing to do. In fact, it's not a surprise that we are the largest only and largest lender to the oil pipeline from Uganda all the way to Tanzania. No other bank has that capabilities, resources, and conviction to be able to drive that momentum. Then it goes into agriculture, housing, infrastructure. And let me say, I was a chair in Energy Transformation Committee at both the East African level and in Kenya. Through these interventions for energy and infrastructure, whether it's pipeline, whether it's fuel transportation, whether it's refining, what you're going to be able to see is changing lives, catalyzing growth of the economy. So GDP like in Uganda will increase by an additional 35% in the next 5 to 10 years. And that's a big delta. You don't see that in the history of the continent in our lifetime. So I will say that as a bank, what we have seen in Uganda coming very strongly is the small and medium enterprises or SME. This is where 80% of the flows of income. So what excites us as a bank is to see homesteads being uplifted. Basic infrastructure for healthcare, transportation, housing, water supply, energy transformation from fuel into gas or from fuel into LPG. That's the things that you're going to be able to see in our markets. And that's how you change the livelihood and quality of our people within the markets in East Africa. So when I say it is historic, those are the numbers that we believe that more than a million new entrepreneurs will be added into the value chain for the energy and infrastructure by 2030. And looking at the numbers there, they speak a lot when it comes to the growth of the economy and also how public-private partnerships are forging towards the growth of the economy, expanding. But let us look at the aspect of sustainability and some of the ESG principles here. What do we have in place? So for us, I give you a broader view. So I'm a strong believer that sustainable development goals will anchor how the outlook of our environment and economies will look like in the medium term. You know, people believe it's a 23rd ambition, but I believe it's much more at 2063. You're going to extend it. So if you think about, like, no poverty, right? Reduce inequality, right? Improve infrastructure. If I think about those three SDGs, what this investment is doing is so we assess and we also evaluate our investment decisions and lending to all our clients in the value chain. What are we doing with the environment? What mitigating actions are we putting in place as an organization today? What practices are put in place in the mining segment? You know, because that's also important. We deal with child labor for instance, talking about equal rights for employees working in that segment. And what value is added? We call it local content. What is added? You don't want to export the entire value, because remember we are not yet refined in our market, but that is the journey in terms of the investment. And I believe that the way the market has been shaped, the capability of Stanbic and Standard Bank over the years, no wonder you needed Africa's largest giant bank to come into this ecosystem. And has it been easy? The answer is no. Have we been criticized? And I'm a strong believer that if you're not being criticized in our markets, you are not shifting the delta for the transformation you need in our markets. And lastly, if I look at markets like in Kenya for instance, there is a down payment called the down payment. Sometimes when you want to be sustainable, you may lose a client. Your cost may be much higher. And what we are seeing now is over time, early adopters of sustainability, finally in the medium term, will get the final ambition and growth in the markets they operate. So there is obviously a challenge. Do I start to be sustainable because it's expensive, or do I wait? And my view has always been that we start now. And there are many enablers and supporters. There's banking sectors coming along. There's transformation like in Kenya we've seen across East Africa. Central banks are coming along to support the industry from climate mitigations, climate taxonomy guidelines. And finally, international organizations like the IFC and the World Bank and others are joining to be able to drive the change. So it's an exciting moment for us to enhance. In fact, I believe that if you don't bring in sustainability in your business today, I don't think you'll be able to anchor your long-term survival in the medium term. Indeed. So that is collaboration for growth. That is a song that we can't emphasize more and more. But what more is on the pipeline when it comes to Stand Big Bank, when it comes to the regional growth, and also maybe the continent as a whole? So let me speak about, that's a very important question to look at. So over time, we have always seen the lens. We look at the posture as one lens. So how do you bring in all actors into our conversations? And the vision I see today for our market is one of convergence. So state actors, right, so policymakers, non-state actors like public sector, private sector, how do we bring in all our energies, whether it's from basic non-tariff barriers, which we spoke about, whether it's about lifting the gums for trade, single transformations or a single custom union within the market, not just by policy but by action. And so what we are seeing is we deploy one singular product. I mean, there's nothing as powerful as delivering one solution for our clients in East Africa, in the Horn of Africa, across the continent and to global markets. I mean, that's like a full quadruple delivery into the market that we see today. And we do that because of our reach and capabilities in structuring complex products. We're the largest bank by thousands of years when it comes to structuring complex energy transactions, not just on pipelines but even oil and gas, even railways. You know, like in Kenya, we're very much involved in structuring the express, the SGR, the Standard Gauge Railway. So I would say collaboration is the way to go. And it comes with something I believe financial sectors bring on the table, a deeper conviction that local institutions on the continent, and remember there's been a lot of de-risking. Global banks have been leaving the continent saying, we don't care about the risk we are taking. But we have to be deliberate in choosing the ambition of what we set. And between, maybe more collaboration is required in the private sector, in my view. Because policy will always be catching up with market. And so for us, we are able to syndicate a bigger transaction across many banks. And we can then use our example in Angola, our example in Mozambique, our example in Uganda. So then it becomes, when I speak about the convergence, and setting the mindset of what we see our markets going to be done. So skill base for our people, and remember Standard Bank is also very much connected with the practices from China, practices from advanced economists like London, practices like our offices in New York. So that for me is the most exciting part. And I'm very proud that for an organization more than 50,000 people across our 20 countries on the continent, you never have a better partner to catalyze, to champion, and to partner for growth in this generation.

Regional trade integration is tipped to witness accelerated growth as African countries strive towards boosting the share of intra Africa trade. CNBC Africa’s Tabitha Muthoni had an exclusive interview with Stanbic Bank CEO, Joshua Oigara on the side-lines of the East Africa Business Summit in Tanzania’s port city of Dar es Salaam. 

Stanbic Bank eyes regional trade integration as AfCFTA gathers momentum

Regional trade integration is tipped to witness accelerated growth as African countries strive towards boosting the share of intra Africa trade.

Stanbic Bank eyes regional trade integration as AfCFTA gathers momentum

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Stanbic Bank eyes regional trade integration as AfCFTA gathers momentum

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