INTERVIEW

Sim Tshabalala

CEO of Standard Bank

South Africa faced a number of financial challenges in 2016. Sim Tshbalala, CEO of Standard Bank South Africa, shares why he believes we can be positive about the country and the African continent.

“Africa is our home, we drive her growth. There is a lot of noise, turbulence and negative events but, underlying that, we every reason to believe we are a modernizing democracy that is doing the right things and that recognizes the need to address inequality, unemployment and poverty. It is important to be realistic about the very serious challenges South Africa faces. However, I remain very excited about the prospects of South Africa, I am proud to be a citizen of a country that has made such a contribution to the world in many areas: from constitutional law to the innovations we have contributed to mining and fuel cells.”

FDI Spotlight: South Africa is the eighth most stable banking system in world, in spite of challenges like the Moody rating, weaker Rand and political changes. How do you see the financial services sector evolving in the short term?

The legislation and regulations that apply to the South African banking system are among the best in the world. We are fortunate to be supervised by an excellent central bank that punches way above its weight in global monetary policy making. We are equally lucky on the fiscal side: South Africa is ranked third after Sweden and New Zealand in fiscal transparency.

Our capital markets not only run well and function well, but in 2016 they were ranked the best in the world for capacity to raise local equity. Our banks are ranked as the sixth-best globally in terms of our ability to finance business and eight-best for soundness. Therefore we are operating in a market where the financial sector and financial deepening are very advanced by global standards.

It is important to remember that South Africa remains a country with one of the best constitutions in the world; we have very strong institutions, including a robust and stable democracy, independent and reliable courts, and an entirely free and vibrant media.

FDI Spotlight: Which markets in Africa do you see growth coming from?

Nigeria remains the most attractive and exciting proposition in sub-Saharan Africa; it is a large economy with a large population and fantastic demographics. The country has the potential to realize a large demographic dividend. The Nigerian economy continues to diversify, and any business that faces consumers, corporates and the government, as ours does in Nigeria, stands to benefit from these investments. Increasing activity in manufacturing, agriculture and indeed in Nollywood bespeak an economy that is developing increased resilience.  Nearly 60% of Nigeria’s GDP is now in services.

Angola is also attractive because of its resources and because of what is possible given its need for infrastructure. Looking at the oil importers, clearly Kenya, Ethiopia, Uganda and Tanzania are the ones we should look at. In addition to their agricultural and resource endowments, the reason they’re among the fastest growing countries in the world include their political stability, impressive structural reforms, and improvements in the ease of doing business – Uganda and Kenya, for instance, are both ranked in the global top ten for fastest-improving business environments.

FDI Spotlight: Why are State Owned Enterprises in South Africa always under fire?

A combination of a lack of clear mandates, weak governance and bad management. The good news is that these are fixable. A couple of years ago Eskom was a very different company to what it is today. Its mandate is clearer, it’s got a plan and it can account for its plan. You may disagree with them but you can’t accuse them of not having a plan.