René van Wyk was appointed ABSA Group CEO in March 2019, following the long and successful stewardship of Maria Ramos. As the group rolls rebrands from Barclays Africa to ABSA across the continent, Mr van Wyk talks to AfricaLive on the importance of driving African to African business, the need to connect global emerging market investors with the African market, and marketing Africa to the world.
Africa Live: How would you describe your investment philosophy, and what is the identity of ABSA Group?
Mr René van Wyk: Our involvement in Africa stems through the Barclays operations that have been there in some countries for over a hundred years. What we want to do as ABSA is to encourage and promote business along the lines of Africa doing business with Africa. We facilitate companies in doing business across Africa.
We are also keenly aware of how the international market plays out. We look to support business into Africa, especially in areas we are already present and have a footprint.
It’s an excellent opportunity for us to grow the business, not to see it just as one channel; South Africa doing business with Africa, but more broadly as Africa doing business with Africa.
Africa Live: What are the main strategic goals you are setting for your time ahead as CEO?
Mr René van Wyk: We’ve identified the business opportunities that there are within South Africa doing business with Africa. There is a need to do corporate banking across Africa, and each country has to have an individual approach to retail. Each country will be unique as far as the retail side is concerned.
We’re busy rebranding our business to ABSA, starting with Uganda, which will be the first one to change from Barclays to ABSA. We’ll continue that journey until 2020 when the whole of Barclays wherever it is across Africa will be ABSA. We want to operate in those countries because we see opportunity. We play a role in the investment coming into Africa. Each African country will have a different proposition, but we believe that in many of the African countries, agriculture will be a strong factor.
As you travel through Africa, you will also hear from the Ministers of Finance and Presidents that investment in infrastructure is significant. Renewable energy will be a big player. How we play our part in the green economy and green lending, seeking alternatives in advising governments, are all significant opportunities that we see.
Africa Live: Where do you see the most appetite at the moment for investment on the African continent?
Mr René van Wyk: From the point of view of ABSA, we look at where we believe we can play a significant role economically.
Setting up a new bank in a new country isn’t a cheap exercise. We will explore partnerships and see if we can complement the footprint. You have to be careful as to where and how you enter and what the market can offer. Markets like Ethiopia and South Sudan are ones where we don’t have a presence. We haven’t closed doors, but you have to see where international corporates and investments will come in, and what sort of footprint they want.
We believe that what we got at the moment as a representation is a suitable footprint.
Africa Live: In your opinion, where do we begin to build Africa’s entrepreneurship, and what would be the role of the banking industry and specifically ABSA in the African continent?
Mr René van Wyk: The whole issue of SMEs is as relevant to the corporates as it is relevant to the banks.
We look at how we can support the entrepreneurs within that corporate chain. With this approach, you have an understanding of the risk profile of the market, how the entrepreneur can be sustainable and how they can grow. We walk the journey with the entrepreneur, and if they are successful, we can then easily connect them with others within that business ecosystem.
I believe the best way of developing entrepreneurship in Africa is to look at the corporate supply chain, how entrepreneurs can link into that, and focus on connecting the whole ecosystem.
Africa Live: Critical to Africa’s development is to develop the skills the continent needs for growth, and to ensure the education systems output matches the needs of the economy.
How can the private sector initiate a more in-depth conversation with academic leaders to prepare for the challenges that the continent will be facing in the coming years?
Mr René van Wyk: I think we have to link the two. There’s a big misconception in the world that education has to be a university degree. It’s more than just a university degree: How can we make farmers out of our youth? That is more important because it creates jobs. If everybody wants to become a CEO or a lawyer or a doctor, there’s not going to be enough jobs in Africa to do that.
In looking at the youth, it mustn’t just be a one-way university degree, and then nothing else. It has to be a lot more realistic in how it will tie into the economy. It’s not a secret that the beneficiation of the resources of Africa is outside of Africa. Why? For that, you need a different skill, not a university degree. University degree isn’t the only type of education that will make a difference on the continent.
Africa Live: The establishment of the African Continental Free Trade Area will be a significant step towards changing the low levels of intra-African trade.
Are you confident that Africa will take this opportunity to break down borders and facilitate economic growth across the continent?
Mr René van Wyk: We’ve been operating in Africa for a long time, so we’ve seen the good and the bad, but we also look at what’s happening elsewhere in the world and the investment opportunities making good returns.
That’s not easy, so we have to look at where those opportunities are. I think there is a political will in Africa to build their own countries, and they appear to change from time to time as new people come into power.
We have a long term view in regards to opportunity in Africa. It takes hard work and interaction, and what you’re doing now at AfricaLive is part of that. As we operate in those jurisdictions, we play a role within those political systems, talking to different people on how we can make a difference.
Africa Live: In your opinion, how can we de-risk Africa in the minds of investors? What will be your approach when talking to investors about Africa’s risk-reward ratio?
Mr René van Wyk: We must firstly identify countries where investment is encouraged. Africa is a massive continent with many different countries. You have to be selective in how you go about it so that that benefits are visible and you can grow.
The best people to sell Africa are people like us who have been operating for up to a hundred years in some jurisdictions.
The thing is, you have to be present in that country to understand the opportunities and how to operate. If you’ve been there for a long time, then you know what to do and how to do it. Identify the projects and opportunities in a bid to unlock it. Open up markets and have an international presence. Investors are looking for returns. I think the opportunities are there.
There are a lot of investors out there with emerging market portfolios. We must bring it together. We must identify investors on the outside and the players in Africa, and bring it all together.
Africa Live: How confident are you in the future of your business and the future of South Africa?
Mr René van Wyk: Of course, I’m very optimistic about our future.
Yes, there are some challenges at the moment, but I believe there’s a political will to deal with that. We’ve been around for a long time. We’re among the most advanced countries in some aspects. Our banking system is regarded as one of the best. You’ll see a lot of South Africans operating elsewhere in the world as we have the skills required.
I think the focus now is sorting the political issues in our country. The corporates must also be a part of it and look at how we can help, as opposed to criticising all the time.
For the future of ABSA, we have a simple philosophy: putting our customers first. It’s about going out to our customers, going out to our staff, visiting our operations in the various countries we operate. I really look forward to the next couple of years for ABSA.
Africa Live: If you have to define success, for you, and for ABSA, what would that be for the best five years?
Mr René van Wyk: Success for ABSA would be that our clients want to do business with us; the customers want to stay with us, and other clients want to do business with us. For our employees, that we are the employer of choice, that they’re happy working here, and that we become attractive to other young talents. That will create a thriving organisation, and that, to me, is a success.
