Africa banking on fruitful cooperation

Standard Bank Group, Africa's largest bank by assets and trading as Stanbic Bank, in partnership with Industrial and Commercial Bank of China, is seeking to break new ground by encouraging Chinese companies to build infrastructure through joint ventures with private African companies.

James Karama, head of the oil, gas and industrials sector at Stanbic Bank Uganda, says that while the Chinese and African governments have done a commendable job with government-to-government partnerships, little has been done through corporate partnerships.

"Government can do its part, but up to a limited level. We therefore want to facilitate the relationship between local businesses and Chinese companies so that African countries can hinge on Chinese knowledge, technology, efficiency, capacity and capital to drive their businesses and make them more competitive," he says.

Karama says the banks help Chinese companies find out about projects for consideration. Stanbic also acts as a collecting agent for Chinese banks that have made loans to African governments.

"We collect loan installments and remit them to the Chinese banks. We have been facilitating this relationship in 20 African countries where we have operations," he says.

To enhance the relationship, Stanbic and ICBC hosted an oil and gas business conference on Aug 18 in Kampala, the capital of Uganda. The event enabled discussions on partnership opportunities and encouraged more cooperation between Ugandan and Chinese businesses in the country's oil and gas sector.

Speaking about the need for greater cooperation between Ugandan and Chinese companies, Ernest Rubondo, executive director of the Uganda Petroleum Authority, said the government had put in place policies and procedures that will ensure that Ugandan companies actively participate in the sector's development.

"As you take on these opportunities, I would advise you to look for international partners who have specialized skills and resources you might not currently have. This will allow you to scale up your operations faster and take advantage of new business streams at a minimal cost," he says.

However, the oil and gas conference was not the first event held by Stanbic aimed at encouraging China-Africa business partnerships. In March, the bank hosted the Africa-China Economic forum, bringing together the Chinese business community and Ugandan companies doing business with China to discuss trade and investment opportunities.

Edwin Mucai, Stanbic's head of corporate and investment banking, says the aim of hosting the forum was to provide a strategic platform that promotes continuous dialogue between like-minded businesses that appreciate the importance of the special relationship between Africa and China.

"As Africa's biggest bank, we are uniquely placed to support this growth through our extensive geographical footprint across the continent, which provides the ideal gateway for the promotion of cross-border projects between Africa and China," he says.

With ICBC as its partner, Mucai says it has strong relationships with Chinese businesses, many of which are already working on large-scale infrastructure projects alongside the many associated industries that drive socioeconomic transformation.

According to Patrick Mweheire, chief executive of Stanbic, his institution and ICBC have had a long-standing relationship, providing financial solutions for small and large companies doing business between Africa and China.

This relationship was further cemented in 2007 when ICBC bought a 20 percent stake in Standard Bank, giving the two partners a much stronger bond and creating a unique link between the two markets.

"Customers using Stanbic or ICBC are able to access end-to-end trade and transaction solutions that improve business efficiencies, reduce trade turnaround times and minimize unnecessary third-party costs," Mweheire says.

Stanbic Bank Uganda is a member of the Standard Bank Group. To date, Standard Bank and ICBC have jointly financed deals worth about $15 billion between Africa and China.

As of Dec 31, the group's assets amounted to $128 billion, while its market capitalization was $11.8 billion.

Standard Bank Group has 1,221 branches and 8,815 ATMs in Africa, making it one of the largest banking networks on the continent.

edithmutethya@chinadaily.com.cn

(China Daily Africa Weekly 09/01/2017 page28)