An independent survey has shown that Standard Chartered Bank contributes $10.7bn to Africa’s economy, a figure equivalent to 1.2% of the region’s Gross Domestic Product (GDP), in an insight into the measurable impact of banking institutions on trade and employment.
Authored by Prof. Ethan Kapstein, Centre for Global Development, Washington DC, and Dr René Kim, founding partner of the social governance consultancy Steward Redqueen, the study, titled “Banking on Africa”, further revealed that Standard Chartered directly and indirectly supports about 1.9 million jobs, or around 0.6% of the region’s total workforce.
In Nigeria alone, the bank contributes $2.1bn, equivalent to 0.8% of GDP, and creates 396,000 jobs through its activities – a figure that represents 0.4% of Nigeria’s labour force.
“As this report shows, banks can play a vital role in supporting sustainable economic development in the communities where they operate,” commented Peter Sands, group CEO at Standard Chartered, further noting: “The opportunities across Africa are extraordinarily exciting and we are committed to playing our part in realising the continent’s potential.”
Standard Chartered has also increased its annual revenue by 16% in Africa over the past five years, according to Bloomberg, in what has been labelled a “sustainable” level of growth by the bank given the continent’s surging economic growth and uptake of banking products.
Viswanathan Shankar, the Dubai-based CEO for the region, told the financial data and media company: “There is huge interest in Africa: it is a continent of hope and of rising world interest. And if you look at World Bank data, seven of the top 10 fastest-growing economies over the next 10 years are projected to be in Africa.”
Kapstein added that in recent years, increases in foreign and domestic investment have been accompanied by a sharp rise in trade, and especially intra-African trade. Separately, the study placed the value of the bank’s support for trade $7.2bn, or 1.2% of the region’s total value.
The review also looked at the socio-economic impact of Standard Chartered’s operations in Ghana, Kenya, Nigeria and Zambia, noting: “By introducing new technology, banks increase the access that people have to financial services. Standard Chartered introduced the first ATMs in Uganda and Kenya, and the first digital branches in Ghana and Kenya.”
On the broader financial landscape, banks including Citigroup and Barclays also plan to expand in Africa, seeking growth opportunities in many of the continents developing countries over the slower-than-average economic growth in developed nations.
Gross domestic product in sub-Saharan Africa will increase by 6.1% this year, up from a projected 5.6% in 2013, according to International Monetary Fund forecasts, while investment will rise to 23.2% of gross domestic product, up from 22.8% last year.
Incidentally, Standard Chartered was also the biggest arranger of syndicated loans in sub-Saharan Africa in 2013, ahead of Standard Bank Group, Barclays and BNP Paribas, and helped its clients borrow $1.96bn, according to another report by Bloomberg.
The prominence of the bank in Africa is in part owing to operations on the continent spanning more than 150 years. Today it has a presence in 15 sub-Saharan African nations, and is also considering entering the markets in Mozambique and Ethiopia.