AWARDS Standard Bank takes Africa titles

African currencies do not tend to take up much of the spotlight in the foreign exchange world, perhaps with the exception of the South African rand. But the vast continent, with its young and growing population, is already an investment hotspot for economic giants such as China, whose direct investment in African countries rose by a staggering 64% in the first quarter of 2017.

Meanwhile, China’s total trade with Africa was nearly 17% higher in the first three months of 2017 than a year previously. As Africa is now the second fastest-growing region in the world after Asia, the opportunities seem too good to miss.

But Africa’s growing economic importance on the world stage does not mean investors are rushing to these higher-yielding countries, partly due to bouts of political instability, but also investors’ perceptions.

“Too often, prospective investors are overly pessimistic about African currencies. Angola and Nigeria, for example, were heavily impacted by plummeting oil prices. Looking at East African currencies, on the other hand, one would be hard-pressed to find a floating currency that has been more stable against the dollar since 2016 than the Kenyan shilling,” says Robert Porter, head of flow sales at Standard Bank.

“The Ugandan shilling and the Zambian kwacha have also been stable this year. The Mozambique metical, which ended 2016 on a weak note, pulled back admirably in 2017, with customers in Mozambique able this year to move from spot-only transactions to longer-dated forward exchange contracts,” he adds.

Looking at East African currencies… one would be hard-pressed to find a floating currency that has been more stable against the dollar since 2016 than the Kenyan shilling

Robert Porter, Standard Bank

Standard Bank was voted Best Bank for South African Rand and Best Bank for African Currencies excluding ZAR at the 2017 FX Week Best Banks Awards.

The bank has used its dominant position in its home currency to build out its broader African presence, widening its footprint gradually. It recently secured a banking licence in Côte d’Ivoire to expand its business in the subregion, with the aim of becoming a dominant player in the West African CFA franc (XOF) – the currency of eight independent countries (Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo) in the region.

The bank and its largest shareholder, the Industrial and Commercial Bank of China, are investing in technology, people and systems to strengthen Africa’s FX liquidity via the Africa-China trade and investment corridor they are building and jointly managing.

“We are honoured that Standard Bank has been named Best Bank for Rand and African Currencies 2017 by FX Week. This award affirms Standard Bank’s commitment to driving Africa’s growth by supporting the success of our customers, especially as they grow cross-border to access African opportunity,” Porter says.

“Our ability to support the growth ambitions of our customers is underpinned by Standard Bank Group’s strategic commitment to Africa. This is leveraged by a continually expanding footprint, backed by a world-leading foreign exchange capability, deep liquidity in our South African home base, and unrivalled access to global capital and investment,” he adds.