With an entrenched African history, the Absa Group says it strives to empower Africa’s tomorrow by finding ways to enable the continent to grow.
This was said by the CEO of Absa Corporate and Investment Banking, Charles Russon, responding to panel moderator Tania Habimana during the US–Africa Business Summit in Gaborone on Wednesday this week.
The topic of discussion was “Enhancing Africa’s Value in Global Value Chains.” Responding to a question on what he sees as an impediment to integrating Africa’s global value chain and what needs to be done, Russon first indicated that as a deeply purpose-led bank, value chain development is close to Absa
“It is Africa’s time, and for that to happen we have to come to the table. At the end of the day, we are here to enable,” he said, adding that the bank has to find ways to enable the continent to grow.
“We have incredible partnerships with developmental agencies, developmental banks, and more. Absa brings a lot of innovation to the table and has relationships across the continent.” Russon emphasised that Absa has to find ways to unlock the value chains. “To do that, we need partnerships across the continent.” Russon said it is not right that only 3 percent of global trade comes out of Africa, noting that just 15 percent of the 3 percent is intra-Africa trading.
He explained that driving the African Continental Free Trade Agreement (AfCFTA) is fundamental to unlocking value chains. “If we can align policies, drive the infrastructure and drive talent, critical skills are absolutely essential to delivering this and unlocking the next phase.”
The trade figures of the continent show that Africa needs to develop itself by industrialising. “We can’t just be at the beginning of this value chain and everything happens everywhere else in the world,” said Russon. “We want to enable the economy and do it the right way.” He noted that as Absa strives to balance environmental issues and the social responsibility, what the bank ultimately wants is financial inclusion.
“As we look to partner with agencies to go into communities and develop these value chains, we want to ultimately uplift the communities,” he said. This is because, as he pointed out, Absa has a large retail offering with a focus on linkages between the corporate sector and SMMEs.
The idea is for the whole ecosystem to benefit communities such that growth does not happen in a narrow value chain but on a broad basis. “I think as a bank this is something we can really do.” Senior Vice President and Head of Sub-Saharan Africa at Visa, Aidah Diarra, pointed out the importance of digitising value chain development in order to be able to access the global trade platform.
Digitisation and resilience
“We have seen the acceleration of digital payments, especially during the pandemic,” she said. “What we have seen is that the economies that were most digitised were the most resilient. And the merchants and small businesses that were online were the ones that were most resistant to the pandemic.
It is critical to start by digitising value-chain development in the continent and giving businesses access to global trade platforms. “That will be fostered and catalysed by AfCFTA,” Diarra said. Another panellist, John Olajaide, who is the founder and CEO of home healthcare technology company Axxess, said it is imperative for businesses to keep upskilling their labour. “We don’t have to reinvent the world,” he said.
Africa not a basket case
But before acquiring the expertise to trade in the global market, Olajaide said, it is important for businesses to have traded within the region and to gain the sophistication.
Board member and Executive Director for Financial Services at Africa Finance Corporation, Sanjeev Gupta, noted that Africa often suffers from the impact of external factors. “One of the mantras that we have adopted is that in many ways we are not in control of many factors but are in control of what we are,” he said. “Africa today is not a basket case but a solution to the world’s problems, be it access to minerals, food, energy and markets.”
Answering a question from the moderator about whether countries should specialise in services or products, Renan Ozyerli, Regional President for Eastern Europe, Middle East and Africa (EEMEA) at MSD – a pharmaceutical company – said he believes there is a need for specialisation and regionalisation.
“I think Africa is in the right way in terms of building clusters to deal with, for example, improving access to healthcare,” said Ozyerli. “What we actually need to build on is to make sure that we are sharing practices across the continent as well. This is one continent but not one country. There are a number of countries with varying access to healthcare.”