Standard Bank Sees Opportunity for Africa in Brexit, Trade Wars

JOHANNESBURG (Capital Markets in Africa) – Standard Bank Group Ltd., Africa’s largest lender, sees trade opportunities opening up for the continent as a result of Britain’s eventual exit from the European Union and the dispute between the U.S. and China over tariffs.

Britain and China will be looking to bolster their relationship with emerging markets, and African nations could benefit from improved access, more favorable tariffs and increased trade should their governments step in to assume some of the credit risk to support flows, said Vinod Madhavan, Standard Bank’s head of trade.

“They will be looking toward other countries or markets to supply to or buy from,” Madhavan said in an interview in Cape Town on Thursday. “There is a gap and they need to fill that gap.”

Key highlights from the interview:

• Trade wars pose a risk to global growth, with fallout for Africa.
• The outcome of the U.S.-China trade standoff, which is likely to be resolved, will have a far bigger impact on Africa than on how Brexit plays out because of their relative market size.
• Most of Standard Bank’s corporate clients in Africa are adopting a “watch-and-wait” approach toward Brexit, and appear more concerned about possible credit risk than currency risk.
• Despite a slowdown in global growth, trade between Africa and the rest of the world has been growing strongly.
• A planned African free-trade agreement, once ratified, is likely to increase flows and spur the development of new transport infrastructure.
• Read more about Africa’s free trade deal plans.