While you would be hard pressed to find an economist that would argue against Africa being a highly significant role player in the global economy, the continent’s infrastructure gap remains its Achilles heel.


There is general consensus that Africa’s infrastructure shortfall amounts to at least US$100bn per year, and without the massive global investment inflows needed to fill that gap, the continent is likely to remain limited in terms of its ability to achieve its full economic potential.

Fortunately, these infrastructure investment inflows are now steadily increasing, and it’s a testament to the high regard in which Africa’s potential is held globally that many of these investment opportunities are being recognised and pursued by European and UK-based investors and exporters of goods, equipment and services.

It’s also interesting to note that export credit finance is playing an increasingly prominent role in supporting and enabling a large proportion of the infrastructure deals and projects that are so vital in shaping Africa’s sustainable economic future. In fact, according to a recent report, Africa was the most supported export credit finance region in 2020, attracting around US$35.5bn in financing.

As one of the leading providers of export credit finance in Africa, Nedbank has positioned itself to be highly effective in leveraging this trend through an enhanced strategy and expansive presence. According to the bank’s head of Nedbank Export Credit Finance (ECF), Sekete Mokgehle, the enhanced ECF strategy represents the understanding of the business that export credit finance and infrastructure investment and development are two sides of the same coin.

“The movement of capital goods and services is obviously hugely dependent on effective, well-functioning infrastructure,” he explains. “This is why we have taken the necessary steps to ensure that we are not only one of the continent’s most prominent export credit finance providers, but also a highly suitable partner for anyone looking for an opportunity to participate in Africa’s infrastructure development.”

Craig Weitz, London-based Principal of Nedbank’s ECF business, explains that the growing interest in Africa by global firms is not unexpected. “Long-term growth rates across the UK and EU have remained modest, with many of the countries that were once growth leaders now expanding at a pedestrian rate of around 1% per annum, while the growth average across Sub-Saharan Africa currently stands at approximately 3 to 4%, despite the challenges of the pandemic.”

Weitz explains that the enhanced strategy and structure adopted by Nedbank ECF is specifically aimed at positioning the business to capture these significant trade flows, with his presence in the Nedbank London office placing the business at the heart of this burgeoning European/African trade relationship, and providing easy access to European export credit agencies and global banks that are increasingly becoming vital collaborators in financing Africa’s infrastructure evolution.

Siya Nxaba, who has recently been appointed to the role of Principal within Nedbank ECF’s South African operations, echoes Weitz’s sentiments, and explains that the enhanced Nedbank ECF strategy essentially centres on this combination of African experience with on-the-ground global reach, to deliver maximum benefits for all stakeholders involved in intra and inter-continental export credit finance transactions.

“While our London base extends our global reach and relevance, our roots are firmly in Africa,” Nxaba says. “Our location in Johannesburg, coupled with our presence in key markets in Africa, our strong syndication and distribution capabilities, our shareholding in ETI and collaboration with Ecobank to increase our reach, mean Nedbank ECF is perfectly positioned and well equipped to add value to domestic and international investors, developers and projects in Africa.”

Mokgehle points out that this established African presence and insight is further underpinned by Nedbank ECF’s well-established relationship with the Export Credit Insurance Corporation of South Africa (ECIC). “This deep relationship with South Africa’s main export credit agency allows us to leverage our position as a premier South African bank with an extensive African footprint to support the competitiveness of South African exporters – particularly given the growing opportunities and markets that we anticipate will be unlocked through the African Continental Free Trade Area.”

“Nedbank established export credit finance as a specialist lending business, enabling excellent product knowledge and relationships with key stakeholders and the ability to leverage off sector specialist knowledge in close collaboration with other lending teams in investment banking,” Mokgehle says. “This enables Nedbank to support the full spectrum of borrowers, from sovereigns developing strategic infrastructure to private sector borrowers investing in capital projects. This approach positions us to tangibly contribute to the achievement of the United Nations Sustainable Development Goals for the ultimate benefit of all Africans.”


Nedbank’s sustainable finance approach cements role of SA agriculture as key economic driver

Agriculture is one of the few economic sectors in South Africa that has shown strong growth over the course of 2020 and the first half of 2021. According to the National Crop Estimate Committee, a record harvest of around 16.3 million tons of maize is likely this season. And other crops are looking equally impressive, not least soya beans, which are set to deliver their biggest total crop volume in recorded history. Citrus farmers are also smiling, thanks to the largest ever citrus export programme, projected to be around 162 million cartons – well above last year’s exports of 150 million cartons.

Combined with steady global demand and rising prices, these figures have contributed to a significant uptick in the Agbiz/IDC Agribusiness Confidence Index, which rose to a record high of 75 in the second quarter of 2021, up 11 points on the first quarter and the highest in 20 years.

According to Zhann Meyer, Head of the Agricultural Commodities Business in Nedbank Corporate and Investment Bank, there are a number of reasons for this exceptional agri-sector resilience, not least the categorisation of agriculture stakeholders as essential services providers during the country’s lockdowns, as well as the good rains experienced over the past 18 months thanks to La Nina.

But Meyer says that the country’s agriculture resilience is also the result of significant investment by farmers into transforming their farms into highly sustainable operations; many with the help of forward-thinking finance institutions like Nedbank. “As a bank with a business model built around a sustainable development framework, Nedbank recognises the role that agriculture plays in ensuring a more food secure future for South Africans, as well as being a vital contributor to the country’s long-term economic recovery and growth,” Meyer says.

This is why Nedbank goes beyond merely providing funding to the agri sector. “We see our role as being more of a sustainable agriculture development partner, leveraging our funding and applying our expertise to enable farmers and downstream credit providers, to ensure that essential resources are sustainably utilised.”

It’s an approach that Meyer says is not only delivering significant positive results for farmers right now, but is also positioning them for a more sustainable and resilient future.

A prime example of the significant knock-on benefits of this alternative way of thinking about agri-finance is the results delivered by a PV installation Nedbank funded for Ideafruit in the Grabouw Valley. The R10mn project allows the fresh produce exporter to refrigerate tens of thousands of crates of apples and pears in controlled-atmosphere cold rooms, using only the sun’s energy. Since its installation, the solar arrangement has saved the business well over R1mn in energy costs, and avoided around 1,500 tons of carbon emissions.

Another example of how sustainable considerations are integral to Nedbank’s agri-funding decisions is the five-year, R50mn loan the bank provided to Humansdorp Cooperative to provide citrus farmers with finance for the installation of shade netting to mitigate the challenges associated with rising temperatures and lower rainfall.

Meyer says that a key requirement of all the sustainable development-focused loans Nedbank CIB advances to agri-sector participants is the accurate measuring and reporting of results. The first report received from the Humansdorp Cooperative provided evidence of the positive results that can be achieved through these types of sustainable funding partnerships. Participating farmers saw a 30% increase in pack-out percentage, and the orchards protected against harsh conditions yielded 28 tons of export fruit per hectare more than in the 2019 season. Water saving figures were even more pleasing, with average water usage for irrigation down 20% in the season.

Meyer points out that the excellent growth seen in the agri sector over the past two years has reaffirmed the vital role it has to play in driving, and sustaining, the all-important economic recovery in years to come. “Nedbank, through its sustainable development funding focus, is excited about playing a key role in restoring the agriculture sector to this position by helping farmers, and the entire value chain, to harness the full potential of a more sustainable approach to agriculture,” he says.