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Navigating SA’s decarbonisation issue in response to CBAM SA’s energy crisis

Navigating SA’s decarbonisation issue in response to CBAM SA’s energy crisis

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Punki Modise – Group Chief Strategy and Sustainability Officer

SA’s energy crisis remains one of the most significant barriers to decarbonisation. The EU’s Carbon Border Adjustment Mechanism (CBAM), due to be fully operational by 2026, represents a major shift in global trade and climate policy. Designed to impose a carbon tariff on imports of carbon-intensive goods such as steel, cement, aluminium and electricity, it aims to align with the EU’s broader Green Deal. The CBAM will effectively create a “carbon price” for products entering the EU market, incentivising exporters to reduce their carbon footprint.

For countries like SA, where high-emission industries play a significant role in the economy, the implications of the CBAM are particularly profound. Sectors such as aluminium, steel and cement are expected to experience export declines, with predictions indicating that aluminium exports to the EU could fall by 13.9%, iron and steel by 8.2%, and cement by 3.1%.

As the CBAM nears implementation, SA finds itself at a critical juncture. The challenge is twofold: the country must decarbonise its key industries to align with international standards while mitigating the economic and social effects that this transition will inevitably bring. The broader question is how SA will navigate these pressures and what role stakeholders — including financial institutions, the government and private industries — will play in ensuring the country’s decarbonisation journey is just and sustainable. Role of financial institutions: supporting the transition Financial institutions are central to SA’s decarbonisation efforts. They can offer crucial capital and advisory services to help businesses transition to low-carbon technologies. The high costs of adapting to CBAM’s carbon tariffs can be alleviated through financial support, particularly for industries most vulnerable to the new regulations. Financial institutions are well-positioned to steer industries through the turbulence caused by CBAM, employing a strategy based on three key pillars: 1. Financing low-carbon technologies: financial institutions have a critical role in offering sustainable financing solutions, such as green loans and sustainability-linked loans, which enable businesses to invest in renewable energy, energy efficiency improvements and carbon capture technologies. These solutions not only help industries meet their emissions reduction targets. but also position them for future growth in a low-carbon economy. By facilitating investments in greener technologies, financial institutions help industries remain competitive under the CBAM regime. 2. Climate risk assessments: Financial institutions are integrating climate risk assessments into their lending strategies to help clients, especially those in high-emission sectors, understand their exposure to climate-related risks. This foresight ensures that industries are not just prepared for the immediate impacts of CBAM but are also resilient in the long term. These assessments are increasingly crucial as businesses confront the dual pressures of complying with international carbon pricing policies and transitioning to cleaner technologies domestically. 3. Balancing decarbonisation with job preservation: One of the most significant challenges in SA’s transition is ensuring that job losses are minimised. With a high unemployment rate, SA cannot afford to lose jobs in key industries, even as it moves towards a greener economy. Financial institutions can play a vital role in ensuring that the transition is both socially and economically inclusive by supporting industries in their green transition while maintaining employment. Negotiating fair terms In addition to financial solutions, SA’s response to CBAM must include a strong diplomatic effort to negotiate fair terms with the EU. Xolelwa Mlumbi-Peter, SA’s ambassador to the World Trade Organisation (WTO), underscored the concerns raised by SA and other African nations about the CBAM’s potential disproportionate impact on developing economies. While global climate action is critical, the mechanism risks placing African countries — which have contributed the least to global emissions — at a competitive disadvantage. Mlumbi-Peter emphasised that climate change measures should reflect the principle of common but differentiated responsibilities, as outlined in the Paris Agreement. Developing countries like SA, which are still reliant on high-emission industries and lack the financial and technological resources to rapidly decarbonise, require more time and support to transition. The EU’s carbon pricing system, which could lead to an estimated $1.5bn annual loss in SA exports, particularly in sectors like steel and aluminium, poses significant risks to trade, employment, and overall competitiveness.

To mitigate these risks, SA’s diplomatic efforts must focus on securing extended compliance timelines and exemptions for developing nations. This includes advocating for increased climate finance and technology transfers from developed countries, ensuring that the economic burden of decarbonisation is shared more equitably. Mlumbi-Peter’s call for a more inclusive, consultative approach to international climate policy, particularly for mechanisms like CBAM, is crucial in ensuring that SA’s transition is fair and sustainable.

Balancing technological innovation with socioeconomic realities

The transition to a low-carbon economy is not just a financial and diplomatic challenge — it also requires significant technological innovation. As noted by Márcia de Oliveira Ramos Furlan, principal specialist at ArcelorMittal SA, while companies like ArcelorMittal are committed to decarbonisation, there are substantial technological barriers to overcome. For instance, the SA steel industry still relies heavily on blast furnace-based production, which plays a critical role in generating the scrap metal needed for future lower-emission steel production methods. However, transitioning to cleaner production methods is hindered by the high costs and limited availability of affordable hydrogen and carbon capture technologies. Without adequate financial backing — comparable to the subsidies and grants offered in other regions such as the EU, US and Canada — SA risks falling behind in its decarbonisation efforts. De Oliveira Ramos Furlan emphasised the need for policies that align with SA’s socioeconomic realities, taking into account the country’s high unemployment rate, poverty and inequality. The transition to a lowcarbon economy must be just, ensuring that vulnerable communities are not disproportionately affected by carbon pricing mechanisms such as CBAM. Saliem Fakir, executive director at the African Climate Foundation, pointed out that EU firms operating in SA’s high-carbon industries should have a say in how CBAM is applied, as it affects both their profitability and their future investments in the country. The unilateral nature of CBAM could hinder Africa’s industrial growth and trade, making it essential for SA to align its decarbonisation strategies with international climate policies while safeguarding its economic interests.

Addressing SA’s energy and infrastructure gaps

SA’s energy crisis remains one of the most significant barriers to decarbonisation. Fakir noted that while the country is making strides in its green transition, critical energy and infrastructure gaps need urgent attention. The country’s unreliable electricity supply, outdated grid infrastructure and high energy costs pose substantial challenges to integrating renewable energy sources such as solar and wind into the grid. Addressing these gaps will require significant investment in grid modernisation, energy storage solutions and distribution infrastructure to manage the intermittent nature of renewable power and ensure energy security. To mobilise the necessary investments for both the energy sector and the broader decarbonisation agenda, strong public-private partnerships are essential. Financial institutions can play a pivotal role in bridging this gap by offering long-term funding and incentivising green projects through innovative financial instruments such as green bonds. Without these partnerships, the financing needed to support renewable energy projects and green infrastructure will remain out of reach for many businesses and communities. In conclusion, the EU’s CBAM presents SA with a critical opportunity to rethink its decarbonisation strategy in alignment with international climate policies. However, the path forward must be carefully navigated to ensure that the country’s economic and social fabric remains intact.

By adopting a collective approach that involves financial institutions, government and industries, SA can accelerate the transition to a low-carbon economy while mitigating the impacts on jobs and trade. The success of this transition hinges on investments in low-carbon technologies, robust climate risk assessments, and strong publicprivate partnerships. Additionally, diplomatic efforts must continue to negotiate fair terms for developing nations, securing the necessary climate finance and technology transfers. As SA moves towards a greener future, a holistic strategy — one that balances environmental imperatives with socioeconomic realities — will be crucial in ensuring that the country emerges more resilient, competitive, and aligned with global sustainability goals. This is not just a matter of compliance but an opportunity to position SA as a leader in the global climate agenda.

 

This article was first published on Business Day on 15 November 2024

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The four letters that will define COP29

The four letters that will define COP29

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By Punki Modise, Group Chief Strategy and Sustainability Officer at Absa.

In the halls of the Bella Centre at COP15, developed nations committed to mobilising $100 billion per year by 2020 to support both mitigation and adaptation efforts in developing countries.

This financial promise was intended as a lifeline for nations facing the worst climate impacts despite contributing the least to global emissions. Yet, more than a decade later, the gap between this promise and today’s urgent realities is wider than ever.

The scale of the challenge has only grown. In 2022, 13 years after the initial pledge, developed countries finally met – and slightly exceeded – the $100 billion target, according to Organisation for Economic Co-Operation and Development (OECD) figures. However, much of this funding has come as loans, raising sustainability concerns for recipient nations already burdened by debt. Experts estimate that meeting the Paris Agreement’s targets will require trillions of dollars annually by 2030, underscoring the need for a far more ambitious financial commitment.

The New Collective Quantified Goal (NCQG) – a post-2025 climate finance target – is set to be a defining agenda item at COP29, aiming for a more ambitious and equitable financial commitment for developing countries. Setting the NCQG correctly will mean moving beyond the $100 billion baseline to a robust, modernised framework with debt-free support, transparency, and scaled-up contributions from both public and private sectors. To ensure climate financing mechanisms address real needs, the NCQG must be co-designed in close collaboration with recipient nations, incorporating their perspectives and priorities at every stage. Anything less risks falling drastically short of the real need.

For African countries, this is especially critical. In pre-COP29 strategy meetings held in September, the African Group of Negotiators emphasised the need for increased, predictable, and accessible financing. They underscored the persistent gap between pledged and disbursed funds and warned that without transparent tracking mechanisms, there is little accountability to ensure these commitments translate into tangible support.

Local communities – those bearing the brunt of climate impacts – are too often overlooked in funding mechanisms, which remain bureaucratic and challenging to access. The NCQG must dismantle barriers that prevent equitable access, such as complex application processes and stringent eligibility criteria, enabling local communities to receive timely and effective support. The group called for streamlined processes and capacity-building efforts to ensure that countries can better navigate the complexities of climate finance while also developing an Africa-led submission on the financial targets for COP29.

Some African leaders, including South Africa’s Forestry, Fisheries, and Environment Minister Dion George, advocate for the NCQG to be set at $1.3 trillion annually, citing the urgent need for predictable and accessible resources. For nations already dealing with severe droughts, floods, and agricultural losses, climate financing must prioritise resilience-building, protective infrastructure, and equitable adaptation support. Climate impacts vary widely across regions, and the NCQG must account for this diversity, ensuring tailored support that empowers each nation to address its unique climate challenges.

There is also a moral imperative at play. Addressing historical imbalances requires an equal partnership in shaping the NCQG, ensuring that African and other developing nations’ insights and priorities are embedded at every level. The continent is home to some of the fastest-growing economies and populations, and a significant investment in its climate resilience now, through mechanisms co-designed with recipient nations, will pay dividends in stability, economic growth, and reduced migration pressures globally.

Yet, the global landscape in which this NCQG is being shaped remains complex. Pivotal elections in key donor nations may shift climate priorities, while macroeconomic challenges push these countries to focus on more immediate domestic issues. Additionally, the EU’s new Carbon Border Adjustment Mechanism (CBAM) could introduce economic pressures on developing countries reliant on exports. As a result, some developing nations may argue that CBAM revenues should contribute to NCQG funds – a position that could gain traction in negotiations.

As the world gathers in Baku, Azerbaijan these four letters – NCQG – will serve as a critical test of global commitment to equitable climate action. This new goal offers a unique opportunity to rectify the broken promises of past summits and foster a partnership that empowers every nation to confront the climate crisis on equal footing. True climate resilience is built through unity.

Only by including every voice and prioritising an inclusive framework for action can we achieve a future where all nations, from the smallest island states to the largest economies, can confront the climate crisis together.

The time to act is now.

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Africa’s options if ‘Finance COP’ falls short of expectations

Africa’s options if ‘Finance COP’ falls short of expectations

By Msizi Khoza, Managing Executive for ESG at Absa Corporate and Investment Banking

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By Msizi Khoza, Managing Executive for ESG at Absa Corporate and Investment Banking

In mid-November, world leaders will gather in Baku, Azerbaijan to try agree on a new climate finance target for assisting developing countries in their fight against global warming. African nations will rightly push for a substantially more ambitious goal than the first one – but should nevertheless consider alternative paths forward should COP29 fail to live up to expectations.

At the 2009 climate summit in Copenhagen, wealthy countries committed to mobilising at least $100 billion per year by 2020 to help developing nations adapt to climate change and decarbonise their economies. That promise was notoriously missed, although it was finally reached in 2022, according to OECD estimates.

From the outset, the goal, though welcome, had come under criticism because it lacked ambition. According to the Climate Policy Initiative (CPI), African countries alone would require $277 billion a year in the decade to 2030 to implement their climate plans, which themselves are understated.

The gap between what is currently being provided and what is required is wide and, worse still, growing. Despite contributing the least to climate change – yet being most exposed to its effects – Africa receives only around 2% of total global climate finance flows, CPI data shows.

At 2021’s COP26 in Glasgow, nations promised to decide on a new goal no later than 2024 — which means COP29 in Baku is the time and the place. This makes the upcoming climate conference a pivotal moment in the race to net zero emissions. For the first time in 15 years, wealthy nations will need to agree to a new funding mobilisation target, known as the new collective quantified climate finance goal (NCQG).
This is a clear source of tension that will dominate this year’s COP. Another is how the support is structured. Building off of the just energy transition programmes underway in South Africa, Indonesia and a handful of other countries, there are calls for more international public climate finance to be provided in the form of grants, rather than loans that have the potential to exacerbate debt crises in climate-vulnerable countries.

It is clear that the quantum on offer must be raised substantially, and this will no doubt be at the very top of Africa’s agenda for the summit.
However, there is a real possibility that the negotiations will disappoint, partly because wealthy nations are grappling with other priorities and domestic issues. At the same time, elections in key markets pose risks to sustained climate action in almost every region.

The US, for example, is bracing for a tight election result. If Donald Trump returns to the White House, he is expected to withdraw the US from the Paris Agreement and vastly scale back climate-related spending at home and abroad. Similar political developments are taking place in other major economies.

With this in mind, African countries need to consider how to plug the finance gap in a worst-case scenario. Regardless of what comes out of COP29, climate change continues to advance, and Africa is on the frontlines of the crisis.

A recent study estimates that climate change could reduce incomes on the continent by 30% by 2050 as extreme weather takes its toll on infrastructure, agriculture, productivity, and health. Moreover, as advanced nations move to cheaper and cleaner energy sources, Africa risks becoming less competitive in the global market.

It is therefore critical that the continent finds a way to ramp up investments in climate adaptation and mitigation – irrespective of the level or external support on offer.

This implies the need to innovate by tapping into pools of domestic capital. By developing clear climate action strategies and robust project pipelines, the continent’s pension funds could be incentivised to invest deeper in the emerging green economy, for instance.

Governments could also consider mobilising funding for climate action by placing surcharges on luxury items and fossil fuels, and by redirecting the billions of dollars in annual fossil fuel subsidies. This is by no means a definitive recommendation, but a question worth considering in light of the massive climate financing gap.
In short, Africa may have to become more self-reliant when it comes to climate action.

That said, if the continent presents a compelling vision for itself, it will be better placed to attract global funding flows as well.

Doing so would require strengthening key institutions and planning frameworks, creating an enabling policy environment, developing attractive project pipelines, and refining and enhancing national climate commitments – known as national determined contributions (NDCs). All countries are expected to submit revised NDCs in 2025.

Africa could also push for a global enforcement mechanism for climate finance commitments to ensure they are fulfilled.

This is a critical moment in our collective efforts to avert a full-blown climate disaster. Bold action is needed, and hesitancy will only stall progress right at the moment when it matters most.

Msizi Khoza, Managing Executive for ESG at Absa Corporate and Investment Banking

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Absa Group once again sponsors BEN-Africa Conference on business ethics

Absa Group to once again sponsor BEN-Africa Conference on business ethics

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Absa Group is proud to sponsor, for the second year, the Business Ethics Network (BEN) Africa Conference, taking place from 7-8 November in Accra, Ghana.

This year’s edition of the BEN-Africa Conference takes place at Ghana Communications Technology University under the theme “Agenda 2063 and a sustainable Africa: the role of ethical businesses”.

The conference brings together organisations, leaders and other stakeholders from private, public and non-profit organisations who have a shared passion for ensuring ethical decision-making in all aspects of business practice in Africa. The conference will explore opportunities to leverage the commitment and competence of organisations and leaders in Africa to do business with moral integrity. There will be a specific focus on how ethical business practice can support the African Union-driven Agenda 2063.

According to Absa Group Chief Compliance Officer Akash Singh, Absa’s support for the conference is in line with its commitment to being an active force for good by promoting ethical business practice across Africa. “We recognise that in keeping with Agenda 2063, we believe in Africa’s agency to co-create ethics-based business practices across the continent as we aspire for the Africa we want,” he said.

“On a continent that is currently being ravaged by corruption – according to the African Union, Africa loses more than $140 billion to corruption – ethical businesses that operate in accordance with sound governance principles and integrity stand as one of the strongest weapons against this scourge and other illicit dealings that undermine Africa’s progress,” he added.

As a pan-African business that has presence in 12 markets across Africa, and more than 20 000 Third Party value chain partners, Absa promotes the creation of an enabling environment where businesses with integrity can grow and thrive even as they contribute to the economic growth of Africa. “It is for this reason that we are pleased to be associated with a platform that allows all those committed to the success of Africa to engage and reinforce the importance of business ethics as a foundation for sustainable value creation and growth,” Singh said.

President of the Business Ethics Network of Africa Dr Bryan Robinson said he was pleased to once again partner with Absa as they host what promises to be an insightful and impactful conference. “It is an honour to collaborate with Absa once again as we drive conversations about reinforcing the moral fabric of African communities and businesses, thus promoting moral integrity in all our business dealings in Africa. Once again, we are proud to be associated with Absa as we continue our journey to promote an environment of trust and integrity through dialogue,” he said.

The Conference will also include the Absa BEN-Africa Ethics Supplier Day on 6 November 2024; an event where small businesses will be given an opportunity to participate in the Ethically Aware Supplier Induction Programme. Developed by the Ethics Institute, the training programme aims to help SMEs make sense of the increasing ethical demands on their business and to ensure that they are ethically aware of issues such as bribery, anti-corruption, environmental and human rights practices. It also aims to give them the tools to promote ethics in their organisations.

According to Absa Group Chief Procurement Officer, Vusi Fele, the SME supplier day forms part of the Group’s commitment to ethical business practices and to being an active force for good in Africa by equipping its communities with the tools to operate with moral integrity.

“There is continued pressure on big businesses to ensure that they themselves, along with their suppliers, uphold sound governance principles. At Absa, we endeavour to collaborate with our suppliers to achieve high corporate governance standards,” Fele said.

“This training programme will therefore enable us to support SMEs, whilst demonstrating our commitment to promoting ethically aware businesses that can contribute to building a sustainable economy in Africa, in keeping with Agenda 2063.”

To attend the conference virtually, please register here

For more information about the BEN-Africa Conference, please visit [https://www.benafrica.org/]

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Increased Competition is Redefining Luxury and Affordability in the SA Automotive Sector

Increased Competition is Redefining Luxury and Affordability in the SA Automotive Sector

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South African consumers are experiencing a paradigm shift in the automotive market, with emerging players disrupting traditional notions of luxury by blending in one key aspect – affordability.

For the average South African, this key distinction has proven significant over the past few years as the cost of living, fuel price, and inflation figures continue to escalate unabated, placing a squeeze on household budgets and finances.

The latest Consumer Pulse Survey by credit bureau, Transunion, points to hope on the horizon. Despite the odds, the report notes that consumer optimism rose three percentage points from last quarter, and 27% of survey respondents considered a new car loan or lease. This signals both resilience and renewed confidence in making significant financial commitments, even in a challenging economic climate.

It also suggests that, while macroeconomic pressures persist, there is a growing appetite for investment in personal mobility as consumers navigate the path forward. Consumers are aspirational and are not looking to automakers to reinvent the wheel but keep the basics – innovation, reliability, and advanced technological features.

Charl Potgieter, Managing Executive at Absa Vehicle and Asset Finance said: “The South African automotive market is fundamentally transforming, and the emergence of new brands willing to be at the nexus of affordability, cutting-edge technology, and reliability is proving to be a significant differentiator. The existing and well-established brands aren’t taking this emergence lightly and have responded with better value offerings that offer consumers increased choice.”

According to insights from Absa’s equity research, while 12-month rolling new vehicle sales declined 6% year-on-year in August. Asian Original Equipment Manufacturers (OEMs), that include India, China, Japan and South Korea, have made remarkable strides in capturing the South African market, with their share of new vehicle sales volumes surging by 21% — from 47% in August 2015 to an impressive 68% in August 2024.

This growth, driven predominantly by Chinese brands leading the category, underscores their capacity to democratise access to new vehicles. By offering products that resonate with the needs of an increasingly discerning and value-conscious consumer base, these brands have successfully positioned themselves as key players in making new car ownership more accessible, relevant, and sustainable in the evolving automotive landscape.

Chery, GWM-Haval, Foton, Omoda & Jaecoo and BAIC, are brands making headway as consumer favourites, gaining significant inroads in the market.

It’s not just the price that sets these vehicles apart. New players have recognised that South African consumers want more than just affordability — they expect reliability, comfort, and advanced technology. By delivering on these expectations, these brands have carved out a niche for themselves, offering vehicles with cutting-edge technology, such as advanced safety systems and infotainment options, at a price where this level of luxury and features were not previously available. The established competitors boast more extensive dealer networks, longstanding reputations and lower maintenance costs that will take time for new brands to build.

“The entry of new competitors into the market bodes well for the industry standard as a whole, with intensifying competition compelling all players to continuously elevate their offerings, driving a dynamic cycle of improvement that benefits the consumer while accelerating the pace of technological and design advancements across the automotive sector,” Potgieter said, on the sidelines of South African Autoweek (SAAW) 2024.

In terms of new vehicle sales, Chinese and Indian automotive players are closely followed by Japanese, and South Korean OEMs, which are making notable gains in market share.

As the anchor sponsor of SAAW, which took place last week at the Cape Town International Convention Centre, Absa remains committed to supporting the sector as it navigates this new terrain. Organised by Naamsa | the Automotive Business Council, this prestigious event coincides with the 100th anniversary of South Africa's automotive industry—an important milestone for one of the country’s most vital economic sectors.

Speaking at SAAW President Cyril Ramaphosa underscored the global shift towards decarbonization as both a challenge and an extraordinary opportunity for South Africa's automotive sector. Cultivating private-public partnerships that accelerate the production and adoption of New Energy Vehicles (NEVs) are critical to driving long-term growth, enhancing South Africa's global competitiveness, and contributing meaningfully to the global climate agenda.

NEVs (which include battery electric vehicles, traditional hybrid electric vehicles and plug-in hybrid electric vehicles) accounted for 3% of new vehicle sales volume in August 2024, up 40bp M/M and 150bp Y/Y.

As the automotive industry observes this shift in purchasing dynamics and the evolving paradigm, Absa, a leading pan-African bank and financial services group, is meeting the sector and consumers where they are.

 

Managing Executive at Absa Vehicle and Asset Finance Charl Potgieter delivered the keynote address at the Absa-sponsored Captains of Industry Dinner, held during SA Autoweek 2024 in Cape Town, celebrating a century of innovation and growth for South Africa’s automotive industry. The three day conference also included a range of though-leading panel discussions on various topics of pertinence to the industry, as well as an address by President Cyril Ramaphosa.

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Widespread progress in African financial markets

Widespread progress in African financial markets

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Absa Africa Financial Markets Index scores rise for majority of the countries

There have been clear improvements across countries in the Absa Africa Financial Markets Index 2024. Scores have risen for 23 countries (82%), which is the highest share since the index was first published in 2017.

In its eighth year, the Absa Africa Financial Markets Index evaluates countries’ financial development based on measures of market accessibility, openness and transparency. With support from the United Nations Economic Commission for Africa, coverage in the index has grown to 29 countries this year with the addition of Benin, encompassing approximately 80% of the population and gross domestic product of Africa.

To construct the index, OMFIF conducted quantitative analysis and surveys of over 50 organisations across Africa, including central banks, securities exchanges and regulators, for their data and insights. The aim is to provide the investment community with a benchmark of market infrastructure across the continent, as emphasised by Yasmin Masithela, interim chief executive, Absa Corporate and Investment Banking: ‘The core of the Absa AFMI is about African countries actively building a fit-for-purpose financial market ecosystem, and perhaps the most important developments, are those that reflect direct changes in policy-making and regulation’.

Key findings from the 2024 index include:

  • ESG has been introduced into market frameworks for 23 AFMI countries to broaden their investment appeal.
  • Rwanda is the highest riser in the index this year, as new ESG assets and climate-related financial regulation was introduced in the country alongside an improving macroeconomic environment.
  • Major foreign exchange reforms have been implemented in Egypt, Ethiopia and Nigeria to move towards more market-based regimes. While this does not directly improve scores for the 2024 index, these reforms – if sustained – are likely to bolster transparency and activity in FX markets in the coming years.
  • New assets are becoming available on domestic exchanges, including ESG assets, sukuk bonds and diaspora bonds.

This year, the breadth of improvement can also be seen at the pillar level. In each of the six pillars, more countries improved than reduced their scores. Taking a longer view, there is evidence of notable improvement in Africa’s financial markets, as 20 countries have higher scores this year than when they were first introduced to the index. According to survey participants, key developments since the index was first introduced in 2017 include expanded domestic markets, better access to financial services and enhanced market infrastructure.

As David Marsh, chairman and chief executive officer, OMFIF highlighted ‘anxieties about Africa’s vulnerability have not disappeared, but have been mitigated by strong evidence of robustness in capital market structures’. Despite recent global economic challenges, the continued advancement in developing local financial markets suggests a promising outlook for Africa’s economic resilience and its ability to attract investment.

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22nd Absa Champagne in Africa Festival: A Feast for the Senses

22nd Absa Champagne in Africa Festival: A Feast for the Senses

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Join us for an unforgettable experience at the 2024 Absa Champagne in Africa Festival on 8 November 2024 at the exquisite Summer Place in Sandton. As the title sponsor of this sophisticated event, Absa proudly invites champagne aficionados, culinary enthusiasts, and those who appreciate the finer things in life to join us for a day filled with elegance, and unforgettable experiences.

“The Absa Champagne in Africa Festival is a true celebration of the artistry and elegance that champagne brings to our lives,” shares Sydney Mbhele, Group Chief Marketing and Corporate Affairs Officer at Absa Group.

He continues: “This festival not only showcases the finest French champagnes but also highlights the stories that unite us all, reminding us that at Absa, your story matters.”

The Absa Champagne in Africa Festival is the largest French Champagne festival in Africa, curated in collaboration with the Ambassadeur Dignitaire of L’Ordre des Coteaux de Champagne, members of the centuries-old French order tasked with extolling the virtues of Champagne globally.

This festival is a celebration of this trusted partnership and serves as a world-class and proudly African platform, allowing guests to discover the finer things that embody excellence and “joie de vivre” —an exuberant enjoyment of life.

Step into a world of luxury as they showcase over 40 authentic and distinguished French champagne houses, each offering a unique taste of their finest selections. This festival is not just about sipping champagne; it’s an opportunity to explore the rich heritage and craftsmanship behind each bottle. Guests will be treated to a vibrant atmosphere that brings together the best of the champagne and luxury lifestyle, making it the ultimate destination for enthusiasts and novices alike.

What to expect at the event:

  • Savour Champagne: Delight in the exquisite offerings from renowned French champagne producers, ranging from iconic names to artistic and boutique houses. This is a rare chance to taste, compare, and discover your new favourites.
  • Culinary Delights: Experience an expertly curated gastronomic menu that perfectly complements the French champagnes. Prepare to embark on a culinary journey that will tantalise your taste buds.
  • Cultural Experience: Immerse yourself in a feast for the senses with art installations, live music, and fashion showcases that reflect the elegance of the event. Enjoy the ambience and make memories while mingling with fellow champagne lovers. Each interaction at the festival helps weave the stories of our diverse community
  • Public Access: The Absa Champagne in Africa Festival is open to the public allowing French champagne enthusiasts to be a part of this extraordinary celebration. Come and enjoy an evening of indulgence and entertainment.

A Legacy of Excellence

As the title sponsor, Absa has proudly supported this prestigious festival for over 22 years, previously known as The Absa Champagne Festival.

“In 2021, the event rebranded to the Absa Champagne in Africa Festival, reflecting our commitment to inclusivity and our Pan-African footprint,” says Mbhele. “This year’s festival aims to honour not only the luxury of French champagne but also the stories of resilience and triumph that resonate with our communities.”

He continues, “We are delighted to host the 22nd Absa Champagne in Africa Festival, a true reflection of our legacy and commitment to excellence. This festival embodies the spirit of enjoyment, bringing together the community to appreciate superior experiences, delectable cuisine, and great conversations. We look forward to creating unforgettable moments with our guests.”

Every glass poured and every story shared contributes to a tapestry of experiences that defines who we are. We look forward to celebrating our guests' stories.

Prepare to sip, savour, and indulge with us at this exquisite event! For the latest updates and ticket information, visit Quicket at http://bit.ly/40dZUe5. Tickets for this exclusive joie de vivre are priced at R2250 per person. Don’t miss your chance to be part of this remarkable celebration.

Stay connected with the event and share your experience by using the hashtag #AbsaChampagneinAfrica2024 when posting content. Follow us on social media at X @Absa and Instagram - @absa.africa to stay updated on the festival and join the conversation!

Please click here to find out more

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Absa Group Advances Digital Empowerment and Gender Equality in Tech

Absa Group Advances Digital Empowerment and Gender Equality in Tech

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Absa Group continues to strengthen its commitment to digital innovation and community upliftment through strategic initiatives that deliver tangible, long-term impact. A key component of this commitment is Absa’s ongoing collaboration with Women in Tech South Africa, through which it proudly sponsors the Philippi Village Learning Centre, empowering women and youth with cutting-edge digital skills.

“We aim to be a catalyst for transformation, empowering Africa’s tomorrow, together… one story at a time. Our goal is to help women thrive in tech and shape a future defined by innovation, inclusivity, and shared success,” said Dr. Philile Mkhize, Chief Operations Officer at Absa.

Located in Cape Town’s Cape Flats, the Philippi Village Learning Centre provided crucial resources to over 9,600 individuals in 2023. The centre offers free access to computers, digital skills training, and a safe environment for studying and academic support to residents from Philippi, Gugulethu, Nyanga, Crossroads, and Mandalay.

Philippi Village hosted a hands-on robotics workshop for 25 students aged 10 to 13 on 18 October 2024. This interactive session introduced young learners to the world of programming, robotics, and sensor technology, fostering creativity and critical thinking while inspiring the next generation of leaders in technology.

Through Women in Tech, Absa has also extended its partnership with Amazon Web Services (AWS) to increase women’s access to careers in technology. In 2023, 50 unemployed women achieved AWS Cloud Practitioner certification through this initiative. For 2024, Absa has more than doubled its efforts, upskilling 130 women across South Africa, Zambia, and Kenya, while offering advanced certifications to past graduates seeking to deepen their expertise.

Commenting on the ongoing partnership with Absa, Melissa Slaymaker, Global Partnership Director for Women in Tech South Africa, said, “By 2030, we aim to empower five million women and girls, and Absa stands shoulder to shoulder with us in this mission, actively collaborating to turn this vision into reality.”

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Absa Group and Business Unity South Africa Lead Critical Roundtable on Just Energy Transition: Exploring CBAM’s Impacts and Opportunities to Shape Africa’s Trade and Economic Future

Absa Group and Business Unity South Africa Lead Critical Roundtable on Just Energy Transition: Exploring CBAM’s Impacts and Opportunities to Shape Africa’s Trade and Economic Future

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Absa Group in partnership with Business Unity South Africa hosted a hybrid Carbon Border Adjustment Mechanism (CBAM) roundtable that brought together key industry stakeholders, policymakers, and thought leaders to discuss the implications of the European Union’s (EU’s) CBAM on Africa’s exports, supply chains, and economic sectors.

The discussion highlighted how CBAM presents both opportunities and challenges for African markets as it aims to impose carbon tariffs on imports of carbon-intensive goods such as cement, steel, aluminium, fertilisers, and electricity from countries with less stringent climate regulations than the EU. The policy incentivises sustainable production by ensuring that imports are subject to the same carbon costs as EU-made products.

“Africa accounts for only 4% of global carbon emissions, yet it remains the most climate-vulnerable region. A fair and equitable just energy transition is crucial for Africa to mitigate the economic impact of CBAM, ensuring the continent can transition sustainably without disproportionate financial burdens on its industries and communities. For this transition to happen, governments must create policies and incentives that promote green technologies and enhance carbon reporting.  Strengthening public-private partnerships to develop regional carbon markets will facilitate emission offsets and align with global carbon pricing mechanisms,” said Xolelwa Mlumbi-Peter, Deputy Director-General in the International Trade and Economic Division, Department of Trade, Industry and Competition.

“At Absa, we understand the critical importance of CBAM for our clients and the broader economy. This is a defining moment for African industries to innovate and attract green finance, requiring collaboration among businesses, governments, and financial institutions. While we recognise Africa’s particular vulnerability to climate change, our Net Zero declaration underpins our belief in and support for a Just Transition,” said Punki Modise, Absa Group Chief Strategy and Sustainability Officer.

“Our commitment is to use our financial expertise as an active force for good, empowering Africa’s tomorrow while addressing climate-related risks such as climate finance and green loans. Through our Sustainability, Social, and Ethics Committee, we are dedicated to managing these risks and advocating collectively to ensure a sustainable future for all,” she added.

CBAM presents African businesses with a compelling opportunity to unlock Africa’s potential by strengthening intra-African trade through the Africa Continental Free Trade Area agreement and fostering sustainable regional supply chains. Embracing forward-thinking strategies now, will enable Africa to align with future compliance standards and play a significant role in advancing the global sustainability agenda.

Speaking at the event, Saliem Fakir, Executive Director of the Climate Foundation, said: “Critics argue that CBAM primarily protects the EU’s competitiveness in green industrial development, but its impact will vary across African countries. For example, Africa could face a significant economic hit of up to €25 billion due to the exposure of sectors like steel, cement, and fertiliser.  Lower-income countries like Mozambique face different challenges as half of the aluminium from Mozambique’s Mozal smelter, which exports to the EU, would be affected. Meanwhile, countries like Kenya, Nigeria, and Egypt will experience varying degrees of impact depending on carbon pricing scenarios, though the overall effect on Africa’s GDP is estimated at around 1%. This variation underscores the complexity of CBAM’s implementation and the need for nuanced solutions, as the EU seeks to lead in global carbon pricing while balancing the interests of its industries.”

Insights shared during this discussion concluded that though CBAM presents challenges, it offers African economies a unique opportunity to modernise industries and embrace a greener future. With the right strategies, Africa can leverage CBAM to drive sustainable growth, attract new investments and strengthen its integration into global green supply chains.

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African Development Bank and Absa unveil multi-billion rand financial package to expand sustainable capital markets, boost economic growth for women and youth

African Development Bank and Absa unveil multi-billion rand financial package to expand sustainable capital markets, boost economic growth for women and youth

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The African Development Bank and Absa Group, one of Africa's leading financial services providers, today celebrated a landmark agreement to mark the execution of a transformative financial package aimed at increasing funding for underserved segments, across South Africa and the continent. The target audience includes women-owned businesses, youth entrepreneurs, and small and medium-sized enterprises (SMEs).

In addition to enhancing Absa's regulatory capital, the facility will promote access to finance, deepen domestic capital markets, and ensure continued access to global supply chains for issuing banks in regional member countries, including low-income and fragile states.

The financial package includes:

  • A subordinated sustainability-linked (Tier 2) loan amounting to R1.7 billion, complemented by a non-financial support package of R18 million for capacity building and technical assistance targeted at SMEs, youth, and women-owned enterprises.
  • Subscription of R1 billion into Absa’s inaugural social (Tier 2) bond issuance, with proceeds earmarked for providing affordable housing loans to female homeowners.
  • A trade finance Risk Participation Agreement (RPA) facility valued at $150 million, designed to underwrite the risks of trade transactions originated by African issuing banks, reinforcing Absa’s role as a regional bank.

Several components of the package have already been executed, including the successful issuance of Absa's first Tier 2 social bond on the Johannesburg Stock Exchange in July 2024. The R1 billion proceeds from this bond will be allocated towards affordable housing loans specifically targeting women, empowering them as first-time homeowners in low-income segments.

Leila Mokaddem, Director General of the African Development Bank’s Southern Africa Region, stated: ”This partnership with Absa Group underscores our commitment to driving sustainable and inclusive economic growth across Africa. Through this financial package, we are not only fortifying Absa's capital base but also ensuring that essential funding reaches women, youth, and entrepreneurs, fostering a more equitable and prosperous continent. This collaboration aligns seamlessly with our strategic priorities of supporting Africa’s industrialisation and enhancing the quality of life for its people.”

Absa has secured a R1.7 billion sustainability-linked Tier 2 loan aimed at general corporate business purposes while incentivizing the extension of finance products to women-owned SMEs as a key performance indicator. As part of this agreement, Absa is collaborating with the African Development Bank to enhance skills among both Absa staff and women business owners. A capacity-building training program has been launched to address the unique challenges faced by female and youth entrepreneurs, by providing mentorship and financial solutions.

Charles Russon, Absa Group interim CEO designate remarked: “The finalisation of this package concludes a three-year process that significantly enhances our capacity to fund social initiatives aligned with our commitment to being a force for good. This partnership enables us to increase funding for women and youth in South Africa while facilitating greater trade opportunities across the continent.”

“This partnership aligns with the African Development Bank’s strategic objectives of advancing green, social, and sustainability instruments in the domestic capital markets, supporting African capital market development and regional financial integration,” said Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank. He emphasised that it is designed to empower Absa to effectively disburse funds for highly impactful social and sustainable economic development initiatives.

The $150 million trade finance facility will drive trade support across Africa, addressing the continent's annual trade finance gap of over $100 billion. This initiative will enhance access to financing for key sectors such as agriculture, transport, and manufacturing, while fostering financial sector development and regional integration.

Left to Right: Ahmed Attout, Director, Financial Sector Department, AfDB; Leila Mokaddem, Director-General, Southern Africa, AfDB; Charles Russon, Absa Group Interim CEO Designate; and Deon Raju, Absa Group Financial Director

Left to Right: Leila Mokaddem, Director-General, Southern Africa, AfDB; Charles Russon, Absa Group Interim CEO Designate and Deon Raju, Absa Group Financial Director