Stanbic Bank adopts new mining growth strategy that improves prospects
By Almot Maqolo
HARARE – In Zimbabwe, a lack of exploration data and a high level of fighting over mining claims are two of the most significant issues deterring foreign direct investment. Finally, the government’s willingness to open up what has traditionally been a highly opaque industry prone to undue influence is critical to the success of some of the more drastic reforms proposed.
Furthermore, a mining sector driven by private investment would almost certainly need a shift in the government’s position in the sector, from direct participation to facilitation and oversight. The government is aiming for $12 billion in exports and 100 tons of gold production by 2023, in keeping with the Vision 2030 Middle Income Status goal. Leading financial services institution, Stanbic Bank, has adopted a growth strategy for the mining sector as it seeks to play a pivotal role in boosting the sector in line with Government targets. Stanbic Bank CE, Solomon Nyanhongo told the Chamber of Mines dinner attendees that the institution was committed to finding lasting solutions towards consolidating growth drivers for the mining industry.
Nyanhongo said Stanbic’s core purpose was to champion Africa and in particular, Zimbabwe’s growth across key sectors including mining. “Our institution has adopted a growth strategy for the sector cognizant of the fact that mining alone provides over 70% foreign currency receipts for the country. The strategy is premised on the realization that we need foreign currency for our economy to assist the nation achieve its goal of a medium income earning economy,” said Nyanhongo. He said the Bank is geared to provide solutions to assist its clients attain government targets. Stanbic Bank already has a significant role to play in the market and contributed over US$20 million in 2021 alone.
“Stanbic Bank is well placed to play a key role in achieving the aforementioned targets on the back of the strength obtained from its parent company, Standard Bank Group. Standard Bank Group recently participated at the just ended Mining Indaba in South Africa and as Stanbic Bank we piggy- back on its expertise to contribute meaningfully towards national development,” he said. Nyanhongo added that Stanbic Bank’s capabilities add value to the mining sector supported by knowledge, experience and insights – industry experts. The institution has mining specialists at Group level and locally as well who help continuously monitor clients’ business activities to proffer solutions relevant to them.
He noted that mining is subject to global markets volatilities, and it is imperative to rely on experts with their finger on pulse, taking a long-term view, while consistently monitoring trends in international commodity prices “Over the 30 years that Stanbic Bank has operated in Zimbabwe, we have supported corporate entities and related ecosystem partners feeding into the sector. Some of the ways we have provided support is through expert advice to clients and also sponsorship of calendar events such as these, that bring together thought leaders in the industry,” he said. Nyanhongo said as much as Stanbic supports the mining sector, there are challenges which need the input of all stakeholders to overcome.
The challenges in the operating environment call for continued engagement to come up with acceptable mitigants as key stakeholders structure solutions and in consultation with authorities, where necessary. “Despite these challenges, we see a positive outlook of the mining sector hence our significant investment. Mining is a key sector of the economy significantly contributing through forex, employment and other add-ons. Africa and indeed Zimbabwe is our home and as Stanbic Bank we are here to drive her growth and will continue to play our part in achieving national targets,” said Nyanhongo.
Rich in natural resources, the African continent has attracted a large inflow of investment in recent years. Although extraction of Africa’s reserves has been largely hindered by weak domestic governance structures and policy impediments, the continent is set to remain one of the major suppliers of a number of commodities in the coming years.