Why Africa and China are together driving and redefining 21st-century growth

As a bank committed to driving Africa’s growth, Standard Bank recognises the relevance of China to the growth of our continent. As the continent’s biggest bank by assets, present in 20 markets across sub-Saharan Africa, our vision for Africa’s growth is reflected practically in our partnership with the Industrial and Commercial Bank of China (ICBC). This 15-year partnership with the world’s biggest bank has enabled Standard Bank to build the world’s leading Africa-China trade and investment platform. As a result of this relationship, in 2022 alone, Standard Bank facilitated trade flows between Africa and China to the value of $600 million. This strategic and mutually beneficial partnership broadens China’s relationships with Africa and gives African businesses access to the world’s largest and most dynamic market.

Over the last three decades, China’s well-established relationship with Africa has been most obviously evident in mining and commodities. Enabled by immense infrastructural investment from China, African commodities played an important role in China’s development into a modern industrial giant and global economic superpower. During this time, Africa has also benefited enormously from the skills, increased investment and rapidly expanding export ability built off the back of China’s initial commodities and infrastructure investment.

To date, Standard Bank has supported over 3,500 Chinese commercial, corporate and state-owned enterprises (SOE) across 15 African markets. The bulk of these firms are overwhelmingly private firms invested in a broad range of sectors. The scale of new private Chinese investment operating across such a broad range of African sectors has substantially enhanced Africa’s ability to import and deploy the technology and skills required to build its own economies, while also increasing the continent’s ability to leverage global investment from other markets.

The IMF estimates that from 2024, Africa will sustain an average growth rate of 4.2% per annum, significantly more than the predicted global average. Though Africa comprises a variety of markets at different levels of development and growth, the IMF also estimates that by 2027 the African continent will replace Asia as the fastest-growing region in the world.

Recognising the phenomenal potential of our continent, we at Standard Bank, together with ICBC, have invested in building the infrastructure and relationships required to give African and Chinese businesses easier access to the opportunities in this strategic trade corridor.

In Africa’s dominant industry, agriculture, we are working hard to enable our continent’s emergence as a global agricultural powerhouse. By investing in and enabling sustainable agriculture, we are empowering Africa’s agricultural sector to leverage our continent’s abundant, uncultivated arable land to supply China’s rapidly evolving consumer economy.

Standard Bank, in partnership with ICBC, routinely showcases African agricultural products at Chinese import promotion events, such as the bi-annual China Africa Export and Trade Exhibition (CAETE), taking place shortly in Changsha, Hunan. The 2019 and 2021 CAETE expos resulted in the signing of 216 projects, accounting for over $43 billion in new trade with Africa. Separately, Standard Bank also arranges regular Africa-China trade matchmaking sessions, introducing existing or potential African exporters to hundreds of Chinese off-takers. In the past four years, Standard Bank has hosted 11 export matchmaking sessions for businesses from 15 African countries trading in a variety of mostly raw and processed agricultural goods.

Many of the secondary impacts of Africa’s relationship with China are captured in Standard Bank’s Africa Trade Barometer data. Results routinely report that African businesses are acknowledging the positive impact of Chinese infrastructure and other investments in enabling business growth and connectivity across a variety of previously unrecorded indicators of growth and business activity. While our Africa Trade Barometer also reflects significant shortcomings in trade-related infrastructure, this too highlights the continent’s significant opportunity to attract more international investment.

Looking ahead, we expect Africa and China to become even more relevant to each other. On the one hand, drawing on Chinese skills and investment, Africa will build the infrastructure, skills, energy and investment ecosystem to sustain business formation and national economic growth for generations to come. On the other, as the Chinese economy continues to diversify and mature, it will be increasingly able to draw on Africa’s youthful demographics and growing manufacturing capacity. This dovetails well with Africa’s own ambitions to increase industrial production and trade within Africa through the Africa Continental Free Trade Association, for instance.

Of course, Africa will continue to play a critical role in the supply of minerals and other commodities, especially those required for the next generation of renewable energy technologies in which China is arguably already a world leader.

Further, as Africa tackles the consequences of growth, whether this be in energy supply, healthcare, logistics or industrialisation, China will remain central to Africa’s development journey.

In energy, for example, it is inevitable that China, as a global leader in renewables technology and manufacturing, will play a central role in Africa’s efforts to build its energy ecosystems for sustaining growth and future prosperity. Similarly, China offers globally competitive healthcare solutions, ideally suited to developing contexts. In construction, investment and trade, China has proved innovative and flexible in providing either lower-cost solutions or officially supported access to its own economy.

The impact of increasingly sophisticated, private Chinese trade and investment, as well as the skills, technology, logistics and ability that these bring, will complement Africa’s economic and social transformation for generations to come. At Standard Bank, we are proud of our role in supporting and enabling what we believe could be the 21st century’s most powerfully transformative economic relationship.