Standard Bank lauds China-Africa investment

Set to reach $100bn by 2020.
Sim Tshabalala, joint CEO of Standard Bank Group Ltd.

JOHANNESBURG – Sim Tshabalala, joint CEO of Standard Bank, on Friday reaffirmed the banking group’s commitment to deepening Sino-African relations through its partnership with the Industrial and Commercial Bank of China (ICBC), which he said identified Africa as an important growth market “long before it was fashionable for global banks to do so”.

“While others have continued to think of Africa in terms of clichés and generalisations, China has been quietly building solid diplomatic and commercial relationships with African countries since the turn of the century,” Tshabalala, speaking at the ICBC/Standard Bank China-Africa Investment Financing Cooperation Forum, said.

The Forum takes place on the sidelines of the Forum on China-Africa Cooperation (Focac), which runs across Friday and Saturday and seeks to strengthen trade and investment ties between China and Africa.

ICBC made the largest ever investment of a Chinese enterprise in Africa when it purchased a 20% stake in Standard Bank in 2008 for $5.5 billion.

“So far ICBC and Standard Bank have worked together on more than 70 projects…with the total agreed financing amount reaching about $20 billion,” noted ICBC President, Yi Huiman, speaking alongside Tshabalala at the Forum.

Some of the deals made possible by the partnership include the Kabompo hydro project in Zambia, a loan facility to Angolan state oil company, Sonangol and a R3 billion refinancing of Samancor Chrome’s debt.

The two banks will jointly support up to 100 new infrastructure and industrial projects across some 30 African countries at an investment of $80 billion, President Huiman said.

“By 2020, an estimated $190 billion will be invested in Africa’s initiative in promoting industrialisation, as well as construction of high-speed railways, expressways and airline networks. Sino-African trade volume will hit $400 billion and China’s foreign direct investment in Africa will reach $100 billion,” he said.

He said that Standard Bank had facilitated ICBC’s rapid business growth in Africa, which at the end of September had made loan commitments of around $10 billion to Chinese enterprises for 44 projects in 20 African countries.

“Over the next five years, Standard Bank will assist ICBC to raise R10 billion in local currency to support the development of South Africa’s power generation infrastructure,” Tshabalala added.

The two banks have selected businesses specialised in nuclear power, solar power, hydro power and other renewable energy sources, Huiman told media.

They are also partnering on retail banking to facilitate online person-to-person and business-to-business remittances between South Africa and China.

A payment solutions infrastructure was very important for the development of the renminbi, said Huiman, which has become increasingly important in global trade and settlements.

“Already a number of African countries are holding reserves in renminbi and we’ve participated with ICBC in providing swaps for the South African sovereign,” Tshabalala added. “An increasing number of import/export clients find it easier to transact in renminbi and we’ve provided then with payment and trade products together with ICBC to solve payment challenges.”

“With China’s assistance, Africa’s economic take-off is now well underway. It’s a great time to be investing and working in Africa,” he said.

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