STRONG HAND

Zambia 2014 | FINANCE | INTERVIEW

TBY talks to Charles M. Mudiwa, Chief Executive of Stanbic Bank, on the company's portfolio, sectors to watch and attractive investment destinations

Charles M. Mudiwa
BIOGRAPHY
Charles Mwanyara Mudiwa became Chief Executive of Stanbic Bank in 2013. Prior to his appointment, Mudiwa was Chief Executive of Standard Bank Malawi from 2007. His past directorships include Standard Bank Insurance Brokers, Eduloan Limited, as well as Agri Bank. He holds an Economics Degree from the University of Zimbabwe. Mudiwa’s previous positions in the Standard Bank Group over the past decade include Executive Director for Retail Banking and Operations at Stanbic Bank Zimbabwe. In South Africa he was Director in charge of Standard Bank’s mass market banking.

What is Zambia's role in Stanbic's overall portfolio?

For the Standard Bank Group, Zambia is obviously an extremely important country for a number of reasons. First, it is one of the fastest growing economies in Sub-Saharan Africa. Our average growth is above 6%, which is incredibly rapid. It has the potential to grow, and, therefore, it provides immense investment opportunities. Secondly, if you look at Zambia, it has moved from being a low-income to being a middle-income country, which obviously provides opportunities for a growing middle class, and it lets us get into a developing economy. Thirdly, Zambia being landlocked in Southern Africa provides important linkages to all its neighbors. The geographical position and acts as a hub as a result. We have a number of NGOs moving into Zambia as well, which is an interesting development.

What sectors in Zambia are you seeing the most growth in?

Mining continues to dominate in Zambia with a significant number of investment in the sector. In addition to mining, we are also seeing growth in the agriculture sector. Zambia used to import maize and wheat, but it is now self sustaining in the provision of grain, and we are happy to note that agriculture is increasingly becoming a strong player in the economy. With 50% of the land being arable and not utilized, there is a huge scope to grow this sector. Zambia also has the privilege of having 30% of the fresh water in this region, so there is abundant water resources, conducive weather patterns, and available land to drive growth in agriculture. The telecommunications sector has also undergone massive growth, and we foresee more activity in this sector. I am of the view that telecommunications is important because it provides a strong ICT platform for economic growth. The sector that is currently underrated, but I believe has huge potential is energy, power, and infrastructure. With the abundance of water, there is an opportunity to install a lot of hydro and clean energy sites, and we are happy to note that the Zambia Electricity Supply Corporation (ZESCO) has been committed to this cause. There is the private sector participation as well, which provides a huge impetus for growth. I see Zambia playing a significant role in energy development in the Sub-Saharan region. With Zambia being in the geographic middle, it has the opportunity to link southern Africa with eastern Africa, and also the Francophone central Africa. I think there is a strong potential for Zambia to become a net exporter of energy in the medium term.

Can you talk about your loan portfolio? Who do you lend to?

We see ourselves as a universal bank; therefore, we deal with all sectors of the economy, from personal up to corporate. If you look from a segment point of view, we have a portfolio in the personal market, a portfolio that deals with the high-net-worth sector, and we also deal with SMEs and local, regional, and multinational corporates. From an economic sector point of view, we are focusing on resources, such as mining, power and infrastructure, telecoms, and agriculture. By market share, we have the largest agriculture portfolio in Zambia. In mining, I believe we are probably joint-first, if not first. We are the largest bank in terms of assets. With infrastructure development in terms of property we financed the largest shopping mall in Zambia. In power, we just signed a deal with ZESCO to provide finance of around $165 million for an 800-kilometer power line from the south to the northwest part of the country. We were also the sole advisors for Copperbelt Energy Corporation (CEC) on the structuring of $70 million capital raised through a rights offer.

What has Stanbic done to make Zambia a more attractive investment destination?

Locally, as a bank we have worked in bond issuing with the International Finance Corporation (IFC), which was really just to develop the local capital markets as that is important for investors. We also host an African Investors Conference in New York and London, with the last one held in London in June 2014 where we had the opportunity to invite government officials and about 30 investors in private equity funds to talk to other investors in those countries. Such are the platforms that Stanbic Bank provides to promote Zambia's investment opportunities on the global map.