London looks to cement trade links with SA
Fintech, professional services, and green and Islamic finance, are areas that SA and the UK can collaborate, writes Lord mayor of the City of London
As the 689th lord mayor of the City of London, I act as an ambassador for the UK’s financial and professional services sector, and have been in SA this past week to meet with senior business and government officials to discuss how we can build closer business ties between our two countries.
During my year in office, visiting both established and emerging markets was a key priority for me, and as Africa’s most developed economy, I looked forward to discussing how we can ensure Britain remains a vital partner for businesses across SA.
London is the world’s leading financial centre, boasting an unparalleled clustering of expertise, and the UK’s regional centres of excellence, such as Leeds, Edinburgh and Bristol, complement London’s exceptional global offer. One of the UK’s key strengths is our leadership in the field of financial innovation, with London a key global centre for both green finance and Islamic finance. I would encourage South African companies to explore these two financial products as possible alternative financing routes for investing in future growth and prosperity.
In London we are also looking to the future, with the rapid growth of fintech quickly becoming one of the City’s crown jewels. More people are employed in this sector in the UK than in New York alone, or in Singapore, Hong Kong and Australia combined. I see real possibilities for British fintech firms to collaborate with South African firms to help people across Africa access banking and financial services in a way that is not currently facilitated by physical banking infrastructure.
The UK and SA already benefit from strong trade links. In 2015 alone, SA imported £1.8bn in services from the UK, with financial services making up a significant slice of this pie. Our trade in financial services has been growing at a steady rate in recent years too, rising by more than 30% between 2007 and 2015. Some of this trade in financial services is in forex trading, with an estimated 40% of all global trading taking place in the UK, and the rand serving as one of the key currency options in London’s trading houses.
But it’s not just trade that ties our two nations: it’s estimated there are more than 130,000 South African workers based in the UK, who make up about 2% of the entire workforce in London’s financial district.
SA’s financial sector is a sophisticated and thriving industry, which provides huge benefits for SA. The sector has benefited from a technological boom, particularly in recent years, which has enabled the sector to grow and adapt faster than ever before. It’s predicted that SA will spend about R16bn on financial IT by 2019, with major growth in cloud-based services and system integration.
As part of this trip, I wanted to make sure the UK and SA continue to work together to establish even greater opportunities for technological growth, more advanced ways of implementing these new opportunities, and ensure that we can, together, build and modernise the financial sector across both the African and European continents.
As the UK prepares to leave the EU, we are actively looking at how we can deepen our relationships with existing international partners. We have been clear that we remain committed to the EU, but I am personally looking forward to seeing how we can increase trade, boost collaboration, and share business opportunities with our partners across Africa, particularly here in SA.
The financial sector, in particular, with its well-established trading relationships with international partners will look to cement its ties with its partners across the world. With some of the most promising emerging markets in the world, the UK’s relationship with African nations will become ever more important, and, as a financially mature country, SA will be a key partner in the region.
In recent years, the City of London Corporation has been proactively looking at ways to strengthen ties with partners across the Commonwealth. The Commonwealth is a collection of 52 member states, with a population in excess of 2.3-billion, united by shared values of democracy, free speech, human rights, and the rule of law, all of which underpin our prosperity. I know there is a strong desire to develop Commonwealth trade. We can and should do more. In 2013, intra-Commonwealth trade in goods and services stood at nearly $600bn. It has grown at almost 10% a year since 1995. The aspiration is to hit $1-trillion in trade by 2020.
With both London’s position as a hub for the Commonwealth, and the strong business ties that already exist between the UK and SA, I am confident this trip marks a step in building a dynamic, expanding relationship for the future. The City, London and the whole of the UK remain firmly open for business, and I look forward to discussing how we can shape a prosperous future for both our countries.