Stanbic leads the way in pivot to China
ACAP is an initiative of Stanbic Bank that provides access to a universe of Chinese suppliers and eases the cash flow of importers through expert financial support. In explaining this, Stanbic’s Head of Business Banking, Calistas Chijoro, does not overlook concerns about African countries’ ability to trade with China during and after COVID-19. He has been speaking with KITSO DICKSON.
Q: Kindly explain the bank’s Africa-China Agent Proposition (ACAP) in terms of what informed this proposition.
A: Stanbic Bank Botswana launched its Africa China Agent Proposition (ACAP) in April 2020. As Stanbic Bank Botswana, our clients remain at the centre of everything that we do as we strive to seamlessly deliver holistic, relevant financial services offerings through relevant and value-adding channels. We are a partner for growth and are working to support our clients in keeping their supply chains strong during this time of increased uncertainty brought about by the COVID-19 pandemic. This initiative provides the foundation of long-term, mutually beneficial and sustainable trade relationships, equipping local importers with the tools to navigate both the simple and complex aspects of doing business in China. This is a difficult period for everyone, and we believe businesses across Botswana need as much support as possible to ensure continued sustainability in operations. We want to help where we can and this is one demonstration of that.
Q: What goals is the bank trying to achieve?
A: The ACAP proposition aims to assist Botswana’s importers source and validate quality goods, safely and efficiently, from the most competitive suppliers in China. The initiative provides access to a universe of Chinese suppliers and eases the cash flow of importers through expert financial support and empowering importers with insight and control of the entire importing and logistics process.
Q: What informed the choice of China?
A: Africa continues to have close trade partnerships with China, with great reliance on imports from China even in Botswana, from raw materials to completely finished goods. This was the impetus for us looking at China. However, concerns have been raised about African countries’ ability to trade with China during and after COVID-19, and Botswana is no exception. China-Africa relations have been marked by vast advancements in trade and cultural exchanges over the past two decades, and yet the outbreak of COVID-19 has affected global trade greatly. ACAP is revolutionising the way in which African businesses import from China as one possible solution to the challenges faced by importers and businesses in Botswana wanting to trade with China.
Q: What does ACAP do to promote problem free experiences by Botswana-based importers?
A: ACAP works to reduce the hassle and increase opportunity and access for ease of trade, making it easier and more seamless for Botswana-based importers to import goods from China and build a veritable network of suppliers. Through ACAP, we are:
- Connecting clients with reputable Chinese importers,
- Providing assistance to navigate the regulatory requirements,
- Assisting to overcome language barriers,
- Sourcing and confirming goods of the required quality backed by requisite quality assurance certification,
- Negotiating prices on behalf of clients,
- Issuing Letters of Credit and Guarantees, and
- Providing access to Renminbi currency to reduce multiple currency conversions.
Q: How many trade agents does this proposition provide African importers access to?
A: We have thus far partnered with one agent in China who was chosen based on their track record, impeccable credentials and extensive knowledge and reach of the Chinese market across all provinces. All this was done with ensuring our client’s peace of mind in accessing this proposition.
Q: Due to COVID-19, we have seen travel bans and supply chains being impacted. What role do you see this initiative playing in helping businesses which have been severely affected? Is this a solution to such problems brought about the pandemic?
A: Ordinarily, and especially before the advent of the pandemic, clients would travel and ensure they identify the right products and at the right price, as well as meet their design specifications. Needless to say, travel, especially international travel, has become quite significantly difficult in the pandemic. Shipping has become more cumbersome and expensive. With this offering which puts forth an end-to-end solution, there is absolutely no reason why businesses have to worry about any of these impediments to business.
Q: Kindly share with us the uptake of this initiative during such trying times?
A: COVID-19 presented many challenges to business, especially with regard to the inability to trade. Importers as well as exports were not only disrupted but they changed quite a lot in terms of what was traded. The demand for Personal protective equipment (PPEs) skyrocketed and they became difficult to find. The waiting times for those increased and they became expensive. Through the reach that this proposition unlocked, we were able to overcome these challenges for our clients and we assisted them to procure much-needed PPEs. This was in addition to the production inputs such as machinery and raw materials.
Q: Kindly share with us how this can benefit trade flow between Botswana and China.
A: At the core of this offering is the involvement of our client in ensuring that we understand and help identify the very goods that our clients are looking for. Once this has been done, we begin the process of ensuring that our clients get the best possible terms, such as a no up-front payment (which significantly exposes the importer) or a lower deposit, discounts and so on. Following this, the bank arranges a safe payment mechanism, discussed and acceptable to the exporter such as a letter of credit – which seeks to deepen trust in Africa-China trade relationships and helps ease flow and ability to trade between these two regions. Stanbic Bank acknowledges the role that both Botswana and China play in expanding each other’s economic capacity and unlocking their potential to prosper through international trade and is committed to driving Botswana’s growth. This strategic trade partnership aims to unlock the potential of this key sector to benefit the economy in the long-term.
Q: What trade capabilities, partnerships or networks does the bank have to do this?
A: The ACAP proposition builds on Standard Bank Group’s long-standing expertise and heritage in Africa, spanning over 155 years. We are confident that we have the expertise, insight and experience to support our valued clients here, further leveraging the relationship with the Industrial Commercial Bank of China (ICBC). We are confident we are the right financial partners to help make our clients’ dreams become a reality through this proposition and indeed the wider purpose delivery of the bank.
Q: Is there any role that the bank is seeking to play to drive Botswana’s growth through this? Please explain
A: We are looking to help build meaningful impact for Botswana businesses in their Africa-China trade, thus strengthening local business potential for growth. This inherently helps solidify the Botswana market base and enhances ability to grow the GDP. We all have a role to play in driving growth for the country, and as a business, this is central to our very Purpose: “Botswana is our home; we drive her growth.” It is further supported by our belief that we can and will help turn clients’ dreams, ambitions and hopes into reality.
Q: Are these services exclusive to businesses?
A: This proposition is open to businesses and individual clients alike. It also covers both Stanbic Bank and non-Stanbic Bank clients (the latter being subject to requisite KYC requirements). So quite clearly, this proposition is for everyone and we look forward to welcoming and serving anyone needing our assistance.