Published on December 18, 2024 by Agencies for Kenya Online News
Last Updated on 1 year by Agencies for Kenya Online News
Equity Group has signed a memorandum of understanding with ODDO BHF of Germany for collaboration that will serve as a bridge for European and Africa businesses to establish across the continental divide. The agreement was signed by Equity Group Managing Director and CEO Dr James Mwangi and ODDO BHF Head of Corporate Banking Florian Witt during the German-Africa Business Summit held in Nairobi. “We are looking for a strategic partnership that can act as a bridge between Africa and Europe to enable businesses from both continents to work together and expand each other’s opportunities in terms of markets,” said Dr Mwangi stating that whereas Africa has significant human capital, unutilized arable land and huge opportunities for renewable energy and strategic minerals, Europe has accumulated and developed entrepreneurial capital and human capital in terms of skills and built technological advancement. “When you put the strengths of Equity and ODDO, you have all the factors of production together under oner roof. Equity and ODDO have chosen to be a bridge so that Africa sheds off perceived potential and transform it to products and services that go a long way to enhance the quality of life of Africans and Fasttrack Africa development.” Contrary to perception of risk of doing business in Africa, Witt said ODDO is a strong believer in Africa where it has operated for decades. “We realize doing business in Africa is very sustainable, stable and profitable with much lower risk than is perceived,” he said. Enumerating why Africa is attractive to investment, ODDO highlighted demography, decarbonization, digitization and derisking as the four ‘D’s that illustrate why the continent should not be ignored any more. “Demography is a strong driver of economic growth and Africa has enormous human capital that the world needs. Europe is capital rich and financing value chains expansion is critical. We need to employ this capital more than ever because our retirement system needs to be paid and the higher yields are available in Africa,” he said noting that ODDO has the means to go into partnerships for trade financing in the region including the Democratic Republic of Congo, DRC. Digitization stood out among the ‘D’s because what Equity can do for a retail customer, most European banks cannot. “It’s much more difficult to have instant payments in Europe and legislation for such services is required. In Kenya, you have developed telecoms payment systems that is being copied in Europe so we can learn a lot about digital adoption from a society that is on the average younger and much quicker to adoption,” he said. It is perhaps derisking of supply chains that provides the most critical value proposition for the agreement. According to Witt, Germany has been too strongly focused on China and Russia. “We are now reaching more to Africa than before. It can be an opportunity and chance for everybody if we do it on equal terms and this agreement between ODDO and Equity has the spirit of doing things on an equal footing,” her said. Witts’s sentiments were echoed by Dr Mwangi who unwrapped how the challenge of world geopolitics is a huge opportunity to reshape and redefine future economic models and being actors, businesses like ODDO and Equity can choose to collaborate. “There has never been a better time for Africa and Europe to redefine their relationship. The past is what it is, but the future is what our aspirations should be. Two different continents within the same time zones. At Equity Group we will be willing to take the risk of European businesses that come to Africa by providing them local currency debt so that there is no mismatch of currencies,” he said. Under the understanding, ODDO will also work on impact investment meaning a collaboration between Equity Group Foundation and ODDO’s foundation. Witt acknowledged what EGF is doing saying, “What Equity has built as a foundation is not only remarkable but is a role model considering the yearly donations you are giving to society and is one of the largest foundations in the world in terms of per capita. We should be respectful of what you are doing in reforestation, education renewable energy and agriculture,” he said forecasting that with the partnership Equity will be in among other giants in the global finance scene. The MOU came on the heels of the launch of a German Desk at Equity in another collaboration between the Equity Group and German Development Finance Institution (DEG). The collaborations have strategically placed Equity on a platform to launch into Europe as explained Dr Mwangi who is also the Executive Chairman of EGF. “Germany is unique to us in the sense that it is built on small and medium enterprises SMEs. It is family businesses that aggregated to build the 3rd largest economy in the world. Similarly, Africa is about family businesses. It’s about micro, small and medium enterprises, MSMEs that graduate systematically from micro to small and small to medium sized enterprises. Equity will bring the passion and enthusiasm to see a transformed Africa because a Transformed Africa is a sustainable world. Equity wants to see a sustainable world as an inheritance that we can bequeath our children.” ODDO BHF is an independent European financial group specialized in private banking, asset management, private equity, corporate and investment banking and banking services.
