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Achieving economic inclusion through cross-border trade 

Access to Capital, Asia, Cash Management, Cross-Border Trade, Digitisation, Economic Inclusion, Emerging Markets, International Chamber of Commerce, Liquidity Management, Standard Bank, Sub-Saharan Africa, Supply Chain Finance, Sustainable Trade Structures, Trade Value Chains

October 13, 2017

  • Access to Capital
  • Asia
  • Cash Management
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Sub-Saharan Africa is, today, the second fastest growing region in the world– and home to some of the most exciting emerging markets on the planet. These emerging markets, combined with frontier markets of equally great potential, “present a future cross-border trade and economic environment that could, one day, emulate Asia in diversity, opportunity and growth,” says Vinod Madhavan, Group Head of Trade for Standard Bank.

Efficient, effective and sustainable trade structures and technologies are central to achieving this vision for growth – and also for alleviating the poverty that still grips many parts of the continent.

Economically excluded populations can be rapidly included in meaningful economic participation by growing sustainable and inclusive domestic, regional and global trade value chains. Trade has the potential to drive inclusive growth in Africa by leveraging new technologies – especially in information – able to link sustainable African industries with a new generation of global consumers.

Now has never been a better time for Africa to sustain growth by taking charge of its own growth momentum, by rapidly expanding the continent’s internal and cross-border cash, trade and securities capabilities. This will, deepen local capital markets, enabling the development of sustainable, diversified and inclusive domestic economies through cross-border trade.

To achieve this vision, however, the information that Standard Bank has access to, across its 20 markets shows how important it is that legislators get the cross-border and policy basics right. At the same time, Africa’s financial institutions should look to developing the digital and sustainability solutions necessary to leverage the continent’s potential.

 Cross-border 

Cross-border integration (of production, supply and markets) through trade, drives the rationalisation of standards, the efficiency and growth of markets, and the diversification of economies – naturally.

Creating the financial markets that allow this evolution to happen is critical for Africa to successfully claim a greater share of global productivity – and the trade networks that support these.

 Progressive policy 

Africa will not, however, realise the benefits of regional and global trade without, at the minimum; liquidity, access to capital, progressive foreign exchange regimes, and clear tax systems. Being supported by; rational infrastructure, agile labour policies, relevant education and efficient customs and excise rules coordinated by regional trade bodies, will free Africa to expand growth internally – while continuing to attract foreign investment.

 Digitisation 

From a cash, trade and investment services perspective, Standard Bank is seeing a lot of evolution in digitisation being driven by our clients and their customer. As the various players in the client ecosystem – i.e., producers, suppliers, service providers – push the bank’s clients to adopt cheaper, more digital, technologies. The bank’s clients also expect the bank to be able to operate and deliver across these platforms.

Our clients continue to search for operational efficiency (especially in a largely paper intensive trade finance business) and hence we expect to see increased adoption of digitisation and digitalisation in trade (across the physical supply chain, the financial supply chain and the documents chain). Technologies such as Blockchain naturally lend themselves in realizing benefits from the digitisation of financial supply chain and documents chain (that secures the documents legal transferability while drastically reducing delays in couriering etc.).

Keeping close to clients, especially in Africa where mobile and other such digital solutions are evolving independently – and often ahead of the rest of the world, places Standard Bank in a position to observe these evolutions first hand – and then evolve solutions that support these digital needs.

Getting this right requires a culture without a territorial or parochial view of innovation and technology an innovative culture completely at home with the democratic and universal culture of today’s digital consumer, client, customer or business person.

 Sustainability 

Since the competitive management of trade information, in the modern age, includes end-users being aware of how sustainable products and services are developed and delivered, businesses also need to develop clear, transparent and fair procurement and production environments – that are sustainable over the long term says Mr Madhavan. While the growing importance of sustainability in business and trade is a challenge in many parts of the world, in Africa the shift to sustainability presents the continent with a myriad of opportunities to develop new, clean and efficient industries – from the ground up.

Standard Bank, as one of the two African banks signatory to the Equator Principles on sustainability in banking and finance, is acutely aware of the opportunity that the global sustainability movement offers Africa. Standard Bank is also the only Africa bank currently involved in the Sustainable Trade Finance working group constituted by ICC (International Chamber of Commerce, Banking Commission).

Getting sustainability right is likely to place Africa at the epicentre of a new global trade in sustainable products and services. This will have profound implications for growth and inclusiveness on the continent.

Standard Bank is ideally placed to help Africa achieve this vision by deploying its technological, policy, market and human insights – built up over 154 years and now present in 20 markets – in the development of a cross-border trade environment that drives inclusive growth and effective global competition in a rapidly changing global environment.

Vinod Madhavan, Group Head of Trade, Standard Bank

 

 

 

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