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Standard Bank group chief executive Sim Tshabalala has painted a dire picture of Africa to overcome its massive challenges in key areas of development such as electricity, logistics, roads, rail, ports, water, agriculture, tourism and telecoms – a whopping $3.4 trillion (about R60 trillion).
He was speaking on Wednesday on the sidelines of the 2024 South Africa-China Presidential Business Forum – ahead of the official start yesterday of the Forum for China-Africa Cooperation.
Tshabalala, whose bank has close to 16 years’ investment and trade experience in partnership with China, described the gathering of SA and Chinese business leaders as being “of significance and ground-breaking”.
He was realistic about the state of the South African and continent’s economy.
“Africa requires about $3.4 trillion in infrastructure and there is not enough money on the continent to finance all the projects,” he said.
“The Development Bank of Southern Africa and the Africa Development Bank, do not have the balance capability to finance all the projects.
“And we therefore need financial partners as Africans – whether it be the World Bank, our own development banks, Chinese, European Union and American financial institutions – mobilising those resources to implement our projects.
“South Africa has a vast number of projects that have to be executed against services required by South Africans – whether it is for municipalities, water reticulation, roads, ports and the railways.
“A forum like this is important to make a case about Chinese institutions having the financial capacity.”
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While Africa required financial muscle, needed “to present the best case for ourselves, to have access to that capacity – just like we need the same with other financial partners – be they American, South Korean or European”.
“We require the financial, construction, engineering capacity and the funding to deliver those infrastructure projects for our country to deliver its service for its people.
“It is a long journey and as Standard Bank, we have been on this journey for close to 16 years now.
“We have a team based here in Beijing and we have a partnership with the Industrial and Commercial Bank of China (ICBC).
“Just think of it, the largest bank in the world ICBC and the largest bank on the continent Standard Bank – in partnership and facilitating the movement of goods, capital, people and ideas between these two great nations – is what we do at Standard bank for the continent.
“The African Continental Free Trade Area is central to South African role on the continent, because you are not only talking about SA’s 64 million people but a population of 1.2 billion people on the continent – a GDP [gross domestic product] of $3 trillion, a massive base which should attract investors.
“This is part of a long-term programme and not imminent,” said Tshabalala.
Asked whether South Africa was negotiating on an equal footing with their Chinese counterparts, Tshabalala said: “Nobody is going to do us any favours – we need to negotiate the best terms for ourselves.
“We have a competitive and comparable advantage – something that we need to use in negotiations.
“Chinese people are great negotiators. If you do not negotiate, they will take the bargain.
“As Standard Bank, we have been on this journey for long and have been able to negotiate favourable terms for ourselves.”
In his keynote address, President Cyril Ramaphosa pledged government’s reforms in areas he said hindered trade and investment in South Africa.
These included visa policy and the country’s high crime rate.
Reflecting on discussions with his Chinese counterpart President Xi Jinping, Ramaphosa said: “In deepening our relations with China, we were able to embark on an all-round, strategic, comprehensive partnership in the new era – an upgrade from the previous partnership we have had for a number of years.
“Our relationship is based on trust and mutual cooperation. “South Africa is privileged to have such a relationship with a special country like China – the second-largest economy in the world.”
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