Business

Africa understands global risk trends, says Standard Bank

KABANDA CHULU, Lusaka
A FINANCIAL analyst says Africa has excellent investment opportunities to offer investors that have a good understanding of likely risks and trends on the continent over the next 15 years.
Standard Bank Group chief executive officer Sim Tshabalala told an audience at the Deloitte & Touché-organised Africa Outlook Conference in Johannesburg, South Africa, recently, that the continent has taken steps to get its own house in order by improving governance, undertaking major regulatory reforms, offering better education and health care.
The group, which operates as Stanbic in Zambia, has also forecast that Africa’s growth will linger in the range of four and five percent.
Mr Tshabalala was dismissing assertions that the ‘African rising concept is a myth’.
“Most countries that are doing these reforms are reaping rewards since these are substantially independent from the falling international commodity prices.
“It is for these reasons that Africa will continue to grow at between four and five percent a year for the next five years. It is not quite as fast as we would like but still far better than the world average,” he said.
Mr Tshabalala said the slowdown in China is having a negative impact on short-term trade, but there are benefits, too.
“Some African countries can, for example, benefit from a weaker yuan [Chinese currency] that will cut the cost of the Chinese goods and services they import. A weaker yuan will mean more heavy equipment lower cost,” he said.
On currency depreciation, Mr Tshabalala said evidence suggests that it has its advantages.
“If appropriately managed, depreciation supports national competitiveness and makes structural reform easier. In most African economies, depreciation has rather small effects on local inflation. On average, 10 percent depreciation will cause domestic prices to rise by only 1.3 percent [not percentage points],” he said.
Africa already leads the world in mobile payments and its digital revolution is expected to continue.
“By 2021, we can expect the continent to have over one billion smartphones in use. The economic, social and political effects of a fully digital Africa will be enormous and I think almost all positive,” Mr Tshabalala said.

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