EXPORTS Not only will
EXPORTS Not only will digitalisation benefit smaller businesses, but digital supply chain finance solutions will make it easier and more affordable for small and emerging businesses to access trade finance solutions.” One of AfCFTA’s aims is to ensure more efficient trade by digitalising customs and border procedures. Negotiations around AfCFTA’s protocol on digital trade – defined as “digitally enabled transactions for the trade in goods and services that either be digitally or physically delivered” – are ongoing. In 2023, the Economic Community of West African States (ECOWAS) announced that it had adopted a comprehensive e-commerce strategy for the 15 member nations of the organisation, becoming the fourth African regional economic community to develop an e-commerce strategy. Considering the dire need for financial support across industries and client segments, as well as the risk appetite constraints faced by commercial banks, more development finance institutions working on the continent have developed and introduced supplementary trade and export finance programmes, on both a funded and unfunded basis. The programmes allow for a collaboration with commercial banks, to support a wider range of clients, aggregators and even government agencies to realise their growth potential, mitigate their risk and enhance their operating efficiency. These facilities, reveals Akpan, are used to provide financing to SMEs and local corporates and promote both intra-African and international trade. “They also aim to encourage and expand trade finance activities of international finance institutions, or banks, who work primarily with smaller domestic banks in Africa to cater to the needs of SMEs and local corporates. Other target segments include soft commodity aggregators that support networks of small farmers and commodity traders,” notes Akpan. While demand for trade finance has recovered post the Covid-19 pandemic, Akpan says commercial banks such as Standard Bank continue to grapple with liquidity constraints that many African markets continue to face. “African governments are at different stages of managing inflation, creating liquidity and offering policy certainty, all amid the myriad of other economic and social priorities that they must focus on. This makes it harder for commercial banks to ‘do it all on their own’ and support all the demand-led growth opportunities that the continent presents.” Partnerships and collaboration between commercial banks and development finance institutions, he adds, offers a strong prospect of bridging the trade finance gap and supporting SMEs and local corporates alike in achieving their growth aspirations. The Port of Tema is a major conduit for goods in West Africa. About Standard Bank Group Standard Bank Group is the largest African bank by assets, operating in 20 African countries and seven international centres. Headquartered in Johannesburg, South Africa, we are listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange. Our strategic position, which enables us to connect Africa to other select emerging markets as well as pools of capital in developed markets, and our balanced portfolio of businesses, provide significant opportunities for growth. As of 30 June 2023, Standard Bank Group had over 18.2-million clients, employed over 49 000 people (including Liberty) and had over 1 000 branches and approximately 6 000 ATMs on the African continent. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets. For further information, go to http://www.standardbank.com Inwang Akpan, Head of Trade, Transaction Banking at Standard Bank. 20 PHOTO: Ghana Ports & Harbours Authority
AFCFTA UNPREDICTABLE GLOBAL TRADE REVEALS THE BENEFITS OF AFCFTA AND INTRA-AFRICAN TRADE AAs South Africa celebrates its first AfCFTA export to Ghana, Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group, reflects on the importance of the African Continental Free Trade Area (AfCFTA) agreement. Amid disruptions to traditional trade routes, unpredictable shipping times and soaring freight tariffs caused by the conflict in the Red Sea region, the opportunities the African Continental Free Trade Area (AfCFTA) agreement creates for the development of intra-Africa trade are becoming apparent. The African continent holds markets that connect 1.3-billion people with opportunities for halal-certified imports a combined gross GDP of about .4-trillion. Buying and trading goods in this environment offers alternative business opportunities both now and in the future. These opportunities would ease the pressure to import goods from the rest of the -million and -million world, says Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients at the Standard Bank Group. “Besides reducing the need to import goods from outside of Africa, the preferential tariff rates promote Africa’s growth. AfCFTA has the potential to boost • Frozen fish, valued at -million South Africa’s economy and create new jobs by increasing economic participation. “In January, South Africa exported its first shipment of goods to Ghana under the AfCFTA agreement. The goods shipped were forged grinding balls and high chrome grinding media products supplied to the platinum, gold, ferrochrome, base metal, power generation and cement industries.” Ghana’s strengths However, several other markets remain to be explored, says Myburgh. “Two features make Ghana a strong trading partner: its location on the west coast and its two deepwater ports. Takoradi and Tema offer logistical advantages to seaborne traffic from South Africa. And Ghana, often called the ‘Gateway to West Africa’, offers easy access not only to Ghanaian markets, but also to other countries in the region.” Some of the mutually beneficial opportunities between South Africa and Ghana, says Myburgh, include: • South African poultry and meat products. Broiler products account for about 80% of Ghana’s meat imports. With a large Muslim population, there are • South African maize, which can generate revenue of $100-million • Raw cane sugar and chemically pure sucrose, which can generate revenue of Ghana, in turn, can offer the South African market: • Cocoa powder and cocoa paste, valued between $10-million and -million • Shea butter for the expanding local haircare and skincare markets, which saw imports of 6.4-million kilograms (worth about .4-million) in 2022 “Standard Bank’s relationship with AfCFTA is focused on unlocking Africa’s potential through digital trade services and innovative technologies. These technologies include data science, AI and blockchain. We work with the AfCFTA steering committee to provide clear insight into digital trade implementation,” says Myburgh. “We have strong ties with Ghana, which include full banking operations. The country is also home to the AfCFTA headquarters. Ghana is dedicated to promoting growth and creating opportunities across the 20 African markets that Standard Bank serves. “With its young population, growing markets and opportunities for intra- African trade, the African continent has the potential to become one of the world’s major trading blocs. And African countries and their worldwide exports will benefit. We are committed to the future of AfCFTA and the continent we serve,” says Myburgh. The first shipment under the AfCFTA left the Port of Durban bound for Ghana in January 2024. Philip Myburgh, Executive Head of Trade and Africa-China, Business and Commercial Clients PHOTO: GCIS 21
