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Business Reporter
BUSINESSES operating in Africa should respond to change and seek guidance on how to navigate the increasingly uncertain landscape, the Standard Bank Group says.

While there are lots of opportunities on the continent, it says there is an urgent need for businesses to review their strategies in response to changing global realities.

The banking group says the inability to confidently interpret information in Africa “fuels uncertainty” in the continent’s corporate transaction landscape, which remains fundamentally positive.

“What is different about the current cycle is a shortage of reliable insight on which to build predictability and, ultimately, effective corporate strategy,” says Standard Bank head of global advisory, Mr Frad Shoko.

“In this environment it is not the frequency, value and drivers of corporate transactions that keep businesses up at night. Instead, banks are increasingly being asked ‘what should we do to develop our business, where are the opportunities and what are the risks?’ As a corporate advisor, this is when the rubber really hits the road.”

From a correctly informed perspective, Mr Shoko says Africa looks distinctly different. He observed African governments have increasingly demonstrated a willingness to work with investors — often making significant concessions to the right kind of investors with the right attitudes and approach.

To him the continent’s regulatory framework, in many countries, is becoming increasingly pragmatic as governments reap the benefits of global investment in tax revenues, jobs and growth.

Mr Shoko further notes that barriers to entry in Africa, from a competitor perspective, are fewer with technologies tested and developed elsewhere being rolled out without development costs in many African markets.

He says Standard Bank was well positioned to give sound advice on investment and transaction opportunities across Africa on the back of over 150 years of experience and presence in over 20 countries in the continent.

The banking group, which is Africa’s biggest by assets, says it is well equipped and willing to advise clients on deals to choose, which sectors to target, which economies to prioritise and, mostly, where the dangers lie.

“Having the right partners, insight and relationships provides a more nuanced and informed view of African opportunity,” says Mr Shoko.

“Standard Bank believes in Africa. By bringing this perspective to clients the group allows businesses to confidently develop effective corporate strategies based on sound advice and the correct interpretation of information.”

Africa does not have many restrictions for new entrants who often enjoy first-mover status in many markets.

The banking group also says personnel and other input costs in Africa are often more competitive —especially as local currencies depreciate against the United States dollar and other global currencies.

Despite concerns about the relatively small-scale of African corporate transactions, Standard Bank says the recent $100 billion plus Anheuser-Busch InBev – SABMiller transaction demonstrates the continent’s ability to manage large global deals efficiently — using local intermediaries.