Swift Announces Expansion Plans To Support Vibrant Business Growth in Sub-saharan Africa
SWIFT will open two new offices in 2015 – in Accra, Ghana and Nairobi, Kenya – as a crucial part of its pan-Africa growth plans. From these offices, SWIFT will manage an expanded presence across the West and East Africa regions.
Christian Sarafidis, Deputy Chief Executive, EMEA, SWIFT, says: “These plans will be a significant milestone for our sub- Sahara business. They recognise Africa’s vibrant economic growth and future potential, and reflect SWIFT’s ongoing commitment to get closer to its customers in these crucial markets.”
SWIFT’s sub-Saharan Africa business, with its head office in Johannesburg, was established more than 30 years ago. In that time, Africa’s economies have changed beyond recognition and there is a growing need for SWIFT to expand to meet new client expectations and business opportunities. Hugo Smit, head of Sub-Sahara Africa, SWIFT, says: “The fact that Africa is rising is evident in various key economic indicators such as GDP growth, FDI and infrastructure investment growth. It is also corroborated by the growth in SWIFT traffic volumes. Such growth requires sound financial systems, securities systems and regulatory compliance. These are all areas where SWIFT can make an important contribution.
“SWIFT’s collaborative approach and ability to offer solutions that benefit the entire community makes it a unique organisation. By opening offices in West and East Africa, we will not only be able to further improve our solution and services offering to customers but will be better placed to support local communities and the development of regional initiatives.”
Six of the ten fastest growing economies in the world are in Africa and economic growth in the sub-Saharan region is expected to rise from 4.7% in 2013 to 5.2% in 2014. Moreover, recent World Bank figures show that capital flows to sub-Saharan Africa have continued to rise, reaching an estimated 5.3% of regional GDP in 2013, significantly above the developing-country average of 3.9%. Recent data from SWIFT supports this trend and demonstrates that its business in Africa has outperformed the total growth of the SWIFT business globally. In 2014 eleven countries in Africa experienced traffic growth of above 20% and six countries saw traffic grow by more than 30%; in the same period. As a reflection of the strong economic growth across the continent, the rise in payment traffic over the SWIFT network has been very strong. Volumes rose by almost 22% in Africa versus 8% total growth worldwide.
“Payments remain a major focus for SWIFT in sub-Saharan Africa and there is great support from policy makers, central banks and commercial banks for further development of financial market infrastructures. These help to make the intra-regional payments space more competitive, open the way for new products and services to be offered by participating financial institutions and reduce the need for foreign financial intermediation,” says Smit.
SWIFT has been working closely with the Southern Africa Development Community (SADC) on its development of the SIRESS payment system. The third phase went live in September, meaning that almost 70 commercial banks in nine countries are now participating in the system. Transaction volumes as well as values over the system are exceeding expectations and continue to rise. SWIFT is also working with other regions towards their plans for regional payment systems, including the West African Monetary Zone and the East African Payment System. Another crucial area for SWIFT is the securities markets. Outside a handful of countries such as South Africa, Nigeria and Kenya, most national securities markets are at a relatively early stage of development. There is huge potential to unlock greater local and intra-regional investment through the use of standardised and harmonised financial market infrastructure.
“With the right financial infrastructure in place and through industry collaboration, Africa has a great opportunity to improve the liquidity and efficiency of its capital markets, leading to cheaper equity funding and greater risk sharing for the continent’s expanding corporates. Robust and efficient securities markets will continue to support foreign investment but also encourage higher levels of intra- African investment. This is good for companies and investors,” says Ian Bessarabia, Head of Business Development, Sub-Sahara Africa, SWIFT. Sarafidis concludes: “The Sub-Saharan Africa region continues to outpace SWIFT’s global business in terms of traffic volume growth. This fully supports our plans to expand SWIFT’s presence on the continent. Most importantly, we are excited about the potential to grow our business here and further increase the African region’s contribution to the global organisation.”