Unlocking trade for sustainable economy in East Africa

The highly anticipated Stanbic East Africa Business Summit recently concluded in Dar es Salaam, Tanzania, bringing together a diverse group of business leaders, policymakers, and industry experts. The theme of the summit was unlocking trade for sustainable growth in the region, with a focus on addressing barriers and facilitating collaboration between various stakeholders. CNBC Africa's Tabitha Muthoni had the opportunity to speak with Patrick Mweheire, Regional Chief Executive of Standard Bank Group, to delve into key strategies and initiatives discussed during the summit. Mweheire emphasized the importance of thought leadership in such gatherings, where policymakers, clients, and other stakeholders can engage in deep conversations about the challenges hindering trade in East Africa. One of the primary objectives of the summit was to identify ways to enable the ecosystem by addressing capital constraints faced by small and medium enterprises (SMEs) engaged in cross-border trade. Mweheire highlighted the role of financial institutions like Standard Bank in de-risking the value chain and creating tailored solutions to support all players involved. A significant focus of the discussions revolved around the level of integration in East Africa, with the region already accounting for 30% of trade among its member countries. Mweheire acknowledged the progress made over the past five decades since the establishment of the East African Community in 1967 but pointed out the need to double the current trade volume to $20 billion. The summit participants explored strategies to unlock the next phase of growth and enhance cooperation among public and private entities. Energy infrastructure emerged as a critical topic during the summit, with a spotlight on supporting the energy sector through long-term financing solutions. Mweheire highlighted the challenges posed by mismatched financing terms for energy projects that have much longer lifespans than the typical funding arrangements. To address this issue, he underscored the importance of partnering with development institutions to provide extended funding periods and reduce pressure on tariffs, ultimately lowering the overall project costs. Another key aspect discussed at the summit was the integration of Environmental, Social, and Governance (ESG) criteria into investment decisions. Mweheire noted the adoption of stringent standards, such as those set by the International Finance Corporation (IFC), by global banks like Standard Bank to assess project sustainability. The emphasis on ESG factors aims to promote responsible lending practices and ensure that projects contribute to environmental and social well-being. When asked about sectors with untapped growth potential, Mweheire redirected the focus to areas requiring support rather than specific industries. He identified agriculture, tourism, telecommunications, and fintech as key sectors with significant opportunities for expansion in East Africa. SME participation in agriculture, the region's reliance on tourism for foreign exchange earnings, and the growing influence of fintech innovations like mobile money services were highlighted as pivotal areas for unlocking sustainable growth. In conclusion, the Stanbic East Africa Business Summit served as a platform for fruitful discussions and collaborative efforts to drive economic growth and promote sustainable practices across the region. By addressing trade barriers, enhancing financial support mechanisms, and integrating ESG principles into decision-making processes, East Africa is poised to realize its untapped potential and chart a path towards a prosperous future.