Standard Chartered Bank has released an independent study on the social and economic impact of its operations in Africa, looking at the value added to the economy and how it supports trade and employment.
The report shows that the bank directly and indirectly: supports some 1.9 million jobs in Sub-Saharan Africa, equivalent to around 0.6 per cent of the region’s total workforce; contributes $10.7 billion to Sub-Saharan Africa’s economy, equivalent to 1.2 percent of the region’s GDP; supports Sub-Saharan Africa trade worth $7.2 billion, equivalent to 1.2 percent of the region’s total international trade; and supports $1.8 billion of tax payments to governments in Sub-Saharan Africa, equivalent to 1.1 per cent of total receipts of governments in the region.
The report was authored by a professor – Ethan Kapstein who currently is a visiting fellow at the Centre for Global Development in Washington DC and René Kim, founding partner of environment, social and governance consultancy firm Steward Redqueen.
While also looking at Standard Chartered overall impact in Africa, the study – called Banking on Africa – takes a closer look at the social and economic impact of its operations in Ghana, Kenya, Nigeria and Zambia.
The findings show that the Bank directly and indirectly in Ghana: contributes $1.4 billion of value to Ghana’s economy, equivalent to 3.4 percent of GDP; 283,000 jobs are related to the Bank’s activity, representing 2.7 per cent of Ghana’s labour force.
In Kenya: contributes $2 billion of value to Kenya’s economy, equivalent to 5.5 per cent of GDP; 323,000 jobs are related to the Bank’s activity, representing 2.9 per cent of Kenya’s labour force. In Nigeria, the bank contributes $2.1 billion of value to Nigeria’s economy, equivalent to 0.8 per cent of GDP; 396,000 jobs are related to the Bank’s activity, representing 0.4 per cent of Nigeria’s labour force; and in Zambia it contributes $953 million of value to Zambia’s economy, equivalent to 4.6 percent of GDP; 147,000 jobs are related to the Bank’s activity, representing 2.7 per cent of Zambia’s labour force.
Peter Sands, Group Chief Executive at Standard Chartered, said “As this report shows, banks can play a vital role in supporting sustainable economic development in the communities where they operate. I am proud that Standard Chartered has contributed to Africa’s development over many years and we will continue to focus on supporting businesses’ growth – which creates jobs – improving people’s lives and encouraging trade and the creation of wealth. The opportunities across the continent are extraordinarily exciting and we are committed to playing our part in realising Africa’s potential.”
Professor Ethan Kapstein, lead author of the report, said “Recent years have seen an increase in foreign and domestic investment in many African countries along with rising levels of trade, particularly intra-African trade. Standard Chartered has played a significant role in facilitating these investments and trade flows, because of its longstanding presence and unique knowledge of African markets. Our report quantifies the impact of Standard Chartered on employment, incomes, corporate profits, and tax revenues and highlights the crucial importance of having a dynamic financial sector to support Africa’s sustainable development.”
In addition, the findings show that Standard Chartered’s impact in Africa stretches beyond supporting jobs, trade and growth. By introducing new technology, the Bank increases the access that people have to financial services. For example, Standard Chartered introduced the first ATMs in Uganda and Kenya, and launched the first ever digital branches in Ghana and Kenya.
The report also provides recommendations on how Standard Chartered can, over time, make an even greater contribution to economic growth in Africa.
The suggestions encourage the Group to continue its work toward supporting development and include: further increasing engagement with SMEs by providing greater access to supply chain financing; building on existing collaborations with the international community’s bilateral and multinational development agencies to improve local infrastructure. For example, building on the extensive work that the Bank is already doing to finance power in Africa; and continue working closely with governments and regulators to ensure a business environment that supports and encourages investment, innovation and entrepreneurship.
By: Iheanyi Nwachukwu