Home Finance Leveraging Sustainability for Africa’s Economic Growth

Leveraging Sustainability for Africa’s Economic Growth

by internationalbanker

By Sunil Kaushal, Chief Executive Officer, Africa, and Middle East (AME), Standard Chartered Bank





The world’s quest for sources of long-term economic growth has resulted in a focus on Africa. The continent has always promised a myriad of growth opportunities, underpinned by bountiful natural resources and the world’s youngest population, but its potential has constantly been dragged down by a chronic lack of infrastructure and investment.

Africa’s youthful population, increasing levels of urbanisation, abundance of resources, and depth of financial services and technological infrastructure put the continent in a unique position for robust and resilient long-term investment opportunities.

The current year is pivotal for Africa’s economy as the continent dusts itself from the ravages of the pandemic and seeks a sustainable economic recovery. Economists across the 50-plus nations see increased global competition as an opportunity and catalyst for new funding. Equally, for investors and trade partners, African markets continue to present a canvas for innovative deals.

Catalysing real growth in Africa lies in enabling trade and enhancing financial inclusion.
However, catalysing real growth in Africa lies in enabling trade and enhancing financial inclusion. According to Statista.com, the banking industry in Africa generated US$86 billion in revenue in 2017 and was expected to reach US$129 billion by 2022.

Financial inclusion is one of the key handicaps in the African banking landscape; for example, according to studies, some West African nations such as Mali, Nigeria and Benin have some of the biggest gender gaps in account ownership in Africa.1 This calls for innovative, cost-effective solutions that facilitate the financial empowerment of women.

Over the next few years, digital banking will likely play a major role in helping women in these nations achieve progress by enabling them to create digital identities that allow them to access any banking service.

Digitisation can potentially increase women’s financial inclusion by enabling them to access banking products and services from anywhere, at any time. Bank branches are not always close to women, especially in conservative cultures or rural regions, and it can be difficult for them to leave their homes to go to a bank or even find one.

There has been a significant change in the corporate climate since the COVID-19 outbreak. Millions of jobs were lost, several firms closed, and the inflation rate was at its highest in 40 years. During this time, the banking sector also incurred significant losses, forcing many banks to start over and devise new strategies.

A study by McKinsey in 2020 projected that the COVID-19 crisis could have resulted in African banking revenues having fallen by 23 to 33 percent between 2019 and 2021. The epidemic also brought a significant change in business practices as more people around the world turned to digital services.

To this end, we continue strengthening our digital banks with ongoing introductions and innovative advancements. This is evident in our introduction of the agent banking feature in Uganda, comprising 6,500 touch points for cash deposits and withdrawals that aid in reshaping our distribution model. We have also prioritised engagements and partnerships with like-minded, progressive institutions, such as the recently announced collaboration with Airtel Africa. The partnership will aim to drive financial inclusion across key African markets by providing consumers with increased access to mobile financial services.

The African population’s median age is 19.7 years, making it a young continent. The younger generation is more computer savvy and eager to adopt new technology, so banks must adjust to meet their needs. Banks across the continent must adopt digital-driven financial solutions that provide retail and wealth goods whilst integrating with other ecosystem partners and populating the platforms with products, value propositions and campaigns that make use of analytics, ongoing consumer feedback and testing

Three years ago, African countries inked a landmark trade agreement, the African Continental Free Trade Area Agreement (AfCFTA). The AfCTA’s scope exceeded traditional trade agreements and covers intellectual property rights, e-commerce and competition policies, which have diminished trade and heightened protectionism. The AfCFTA and a modern, productive African economy both depend on digitisation. The digitisation objectives of the bank complement continent-wide economic-transformation initiatives. The Digital Economy Initiative for Africa (DE4A) and the Digital Transformation Strategy for Africa are two initiatives that work together.

Mobilising capital to fund Africa’s digital development poses a monumental investment opportunity.
Mobilising capital to fund Africa’s digital development poses a monumental investment opportunity. Let’s look at one striking example of how investment can drive growth. If internet access were expanded to an additional 10 percent of sub-Saharan Africa’s population, it would fuel growth of up to four percentage points in the region’s real per capita gross domestic product (GDP).2

The Sustainable Development Goals (SDGs), a set of 17 interconnected global goals created in 2015 by the United Nations General Assembly, serve as a “blueprint to build a better and more sustainable future for all”. Financial institutions worldwide are not falling behind as more organisations take action to improve sustainability.

African nations have been confronted with difficulties, such as growing urbanization, susceptibility to climate change, and social and economic disruptions brought on by the COVID-19 pandemic. Banks should focus on minimising the negative effects of their financing while also improving, cleaning up and making the world a safer place. To address these issues, finance is essential. It is an opportunity enabler, accelerating economic inclusion through digital solutions and assisting in the transition to low-carbon technologies. Therefore, Standard Chartered’s strategy is to offer financial goods and services to individuals and organisations in order to promote sustainable development, economic growth and job creation.

African countries must confront climate change. A Stanford University3 study finds that inaction could cause a stunning 30-percent loss in future global economic output—whereas the world’s scientists and governments have concluded that even the most aggressive climate action costs under 0.1 percent GDP. The world has recently been plagued by natural calamities, including severe drought in Africa, forest fires  in  Australia, floods and landslides in China, and floods. COP 27 will be held in Egypt later this year with the underpinning objective of promoting dialogue about addressing climate change. Every industry should develop strategies to reduce climate change, because it impacts everyone. Therefore, banks must play a part in helping the continent adapt to climate change and lessen its effects.

Only 2–3 percent of the world’s carbon-dioxide emissions from industrial and energy sources come from Africa. Africa has contributed very little to the issue of greenhouse-gas emissions, but the international community anticipates that it will respond similarly to the rest of the world. Additionally, 14 percent of the world’s forest cover, which acts as a carbon sink, is found in Africa, where it helps to lower atmospheric carbon-dioxide levels.

14 percent of the world’s forest cover, which acts as a carbon sink, is found in Africa.
Standard Chartered recently announced new targets to reach net-zero carbon emissions from its financed activity by 2050, including interim 2030 targets for the most carbon-intensive sectors. This approach hinges on reducing the emissions associated with our financing activities to net-zero by 2050, setting 2030 interim targets in our most carbon-intensive sectors.

The bank released a methodology to assess emissions and define its emission targets at the sector level in an effort to help organizations, a move that other players in the sector could adopt. This, therefore, ensures that the players improve the accuracy and availability of their data, as well as the standards and methodology used in emission computations.

The bank has also identified three precise levers to help it reach its net-zero goals. The first step is assisting clients with their decarbonisation journeys by offering transitional, environmentally friendly finance and guidance. Secondly, the bank will often meet with clients to better understand their shifting strategies. Through these workshops, they will be able to evaluate and balance their willingness and capacity to switch to lower-emission technologies.

By the end of 2022, we expect all clients in carbon-intensive sectors such as power generation, mining and metals, and oil and gas sectors to have a strategy to transition their business in line with the goals of the Paris Agreement.

Significant funding and specialised assistance are needed to meet climate goals without denying developing nations the chance to develop and succeed. African nations, particularly the major oil-producers, lack the resources and infrastructure necessary to switch from fossil fuels to sustainable energy completely. The adoption of alternative clean energy and a gradual increase in its proportion in the race to fulfil the global targets for 2050 are key components of a sustainable future.



1 Gates Foundation: “Women’s Digital Financial Inclusion in Africa,” July 2019.

2 World Economic Forum: “How COVID-19 could spearhead a resilient and sustainable sub-Saharan Africa,” September 21, 2020.

3 Think Progress: Trump’s abandonment of Paris climate deal to cost U.S. economy trillions, new study reveals,” Joe Romm, May 29, 2018.



Sunil Kaushal is Chief Executive Officer of Standard Chartered Africa and Middle East (AME) and a member of Standard Chartered’s Global Management Team, the highest executive body within the bank. Prior to this, Sunil was the Regional CEO of Standard Chartered South Asia and CEO of India. He has been with the group for nearly 24 years and has approximately 34 years of banking experience in diverse markets across North Asia, Southeast Asia, South Asia, the Middle East and Africa.


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