By Chris Edwards

Many argue that the global financial crisis permanently changed the relationship between hedge funds and their prime brokers. Prior to 2008, South African equity managers were typically running relatively niche, domestically focused equity long-short or market-neutral strategies, whilst fixed income managers focused local exposure, largely centred on sovereign debt, often managed and financed in relative isolation. But the aftermath of 2008 forced managers to confront how closely counterparty strength and balance sheet resilience were tied to their ability to run those strategies.

The buy side diversified counterparty risk by moving to a multi-prime broker model, something that is all too familiar today, while advances in electronic trading and cross-asset modelling expanded the range of instruments that could be traded within a single portfolio, setting the stage for multi-asset strategies that now differentiate prime brokers in the market.

Managers are now able to invest more broadly within defined mandates that permit international exposure, with access to instruments across markets and asset classes that allow for far more diversified, globally integrated portfolios. For prime brokers, that has meant meeting those requirements in practice, from providing access to global markets and traded instruments to understanding the risk embedded in more complex underlying portfolios and structuring solutions that allow managers to implement these strategies effectively.

A significant amount of time and effort goes into developing multi-asset class margin models that assess portfolio risk across instruments, geographies, and asset classes. The objective is to provide fund managers with margin requirements that are both optimised and competitively priced, ensuring they are not unduly penalised through excessive collateral posting relative to the risk embedded in their portfolios. That requires looking at portfolio-level risk and the correlations that exist across asset classes, rather than treating exposures in isolation. By doing so, prime brokers ensure managers achieve the most efficient use of collateral possible, effectively maximising the value of what they post against the risks they are running.

That focus on portfolio-level risk and collateral efficiency has become even more important as regulatory requirements evolve in specific markets, South Africa being a clear example.

Local regulators are implementing reforms aligned with global initiatives to strengthen the regulation of Over-The-Counter (OTC) derivatives, most notably through the introduction of initial margin requirements for non-centrally cleared derivatives. This staged approach has had a penal effect on hedge funds that make active use of derivatives within their portfolios, materially increasing collateral requirements for instruments such as interest rate swaps and related derivatives. For funds with limited balance sheet capacity, those requirements can quickly become prohibitive relative to the capital they manage.

From a prime brokerage perspective, this is where platform capability and model sophistication matter, and some banks have moved quickly to adapt. Absa, for example, has invested heavily in developing solutions that offer managers alternative ways to meet these regulatory requirements, allowing them to collateralise exposures more efficiently. In some cases, that has been critical in enabling funds to remain viable.

This is not about circumventing regulation, but about interpreting it properly and adapting to it, finding workable solutions that sit within the rules while allowing managers to continue operating strategies that would otherwise struggle to be sustained. Recognising offsets and correlations across asset classes becomes a practical requirement for supporting multi-asset portfolios efficiently under modern regulatory regimes.

As portfolios become more complex, the way strategies are packaged and delivered has changed too.

The traditional fund structure is transforming with the growth of actively managed certificates, actively managed ETFs, and other delivery or access channels. Managers are therefore exploring alternative ways of deploying their strategies, and their choice of platform provider is being influenced by the ability to support multiple structures at once. That includes supporting traditional fund infrastructure alongside AMCs, segregated or separately managed accounts, and other tailored vehicles.

With strategies expressed through a broader set of channels, managers are looking for prime brokers that can meet those requirements in parallel rather than forcing trade-offs between them. What this means is that prime brokers will need to evolve to support and deliver services beyond liquidity and execution if they are to support the growing call for diversified, multi-asset investment strategies.

Chris Edwards, Managing Director and Head of the Prime Services, and the Index & Structured Solutions businesses at Absa Bank

By Vignesh Subramani

South Africa heads into 2026 on firmer economic footing than in recent years, with a steadier macro backdrop and modest growth prospects beginning to take shape. That should be positive for the country’s small business sector, which picked up some momentum in the second half of last year off a low base, even as sentiment improves and confidence returns in a measured, cautiously optimistic way rather than with outright bullishness.

It comes as a welcome breather for a sector that accounts for the bulk of formalised businesses and employment in the country, and which has spent the years since the pandemic contending with persistent headwinds and rising cost pressures that have steadily squeezed its room to grow. January arrives with fuel costs at their lowest in almost four years, more than 200 days without load shedding, a rand trading below 17 to the dollar for the first time since 2023, and interest rates at their lowest since 2024. If those conditions hold, or even stabilise around current levels, they will ease operating pressure materially and make it more attractive for businesses to consider funding and expansion again, two areas that have been among the most persistent constraints for small businesses.

According to the Small Business Growth Index (SBGI), South Africa’s first real-time barometer tracking the conditions shaping small business performance, only 38% of businesses surveyed in 2025 believed they could survive for more than a year under cost pressures without external support. Those pressures were concentrated around input costs, energy reliability, and the broader economic environment, with many respondents pointing to the need for government action that reduces administrative friction and provides relief from energy-related costs. Additionally, more than two thirds (70.5%) expected to require additional financing within six months, largely to fund working capital, capital equipment, marketing, or refinance existing debt. In practice, at least 40% were relying primarily on self-funding, with others turning to family and friends or informal and private lending.

Taken together, this resolves into a composite SBGI reading that points to fragile stability as the sector enters 2026. The Index shows that around 59% of small businesses anticipate moderate to strong growth over the next 12 months. Growth intentions are largely domestic, with 92% planning to expand locally and 72% nationally, while a smaller but notable share is looking outward, with 45% intending to export and 67% aiming to grow their online presence.

The extent to which those intentions translate into action will be determined by how conducive the operating environment proves to be, and by how quickly small businesses are able to adapt to it. There is no one-size-fits-all approach, but some common principles are starting to take shape.

Market access will be vital, with greater emphasis on the channels through which customers are reached. Many businesses are meeting customers where they already transact, whether by extending physical operations online or by using digital marketplaces to sell products and services. Part of this is the way businesses make and receive payments, with instant payment platforms and digital wallets gaining traction, especially among underbanked businesses, helping to stabilise cash flow and reduce delays. This area is likely to see further innovation as the year unfolds, and owners, especially those with smaller operations, will need to take a deliberate digital- and mobile-first approach to stay relevant.

Technology is also becoming more consequential inside the business, with efficiency becoming a defining factor in competitiveness. Tasks that were previously manual are now being digitised through AI-powered chat assistants, cloud-based financial reporting, diary management, and employee management tools. These tools are more accessible than ever and are worth serious consideration. For larger businesses within the SME segment, this brings a parallel requirement: more deliberate investment in cybersecurity, particularly as digital tools are adopted more broadly across operations.

Meanwhile, through conversations with business owners, it is clear that concerns around infrastructure have not eased, despite the extended period without load shedding. Water security, in particular, has become the dominant worry. Many businesses are already investing in backup and storage solutions in anticipation of future constraints, and this is becoming an important consideration for operations that depend on reliable water supply.

The SBGI suggests that most businesses are unlikely to move forward aggressively this year.

Improving indicators have not translated into a rush to commit capital, and caution still shapes much of the decision-making process. Speed of access to funding still matters, particularly when opportunities emerge, but there is growing awareness of the risks that come with accepting finance on unfavourable terms. In some cases, that trade-off may be justified. In others, it can place unnecessary strain on the business at precisely the wrong moment.

This is why stronger relationships with financial institutions are arguably among the most decisive factors this year.

The SBGI found that while most SMEs surveyed sought some form of advice, engagement with formal advisory networks is very limited, with a meaningful share still operating without any external input at all. When financial institutions are treated only as transactional intermediaries, opportunities to test assumptions or structure funding more deliberately are often missed. More open engagement allows businesses to think through questions of timing, funding mix, and risk exposure before those decisions become urgent. It also brings sector-specific insight into the conversation, which can be particularly valuable in an environment where conditions differ sharply across industries.

For many small businesses, 2026 is less about acceleration and more about judgement. Building a working relationship with a financial partner, one that supports informed decision-making, may prove to be one of the most practical advantages available in the year ahead.

Vignesh Subramani, Interim Managing Executive of SME Business at Absa Business Banking

By Thuso Tseetse and Reindolf Ofosu-Hene

It is often said that Africa holds close to a third of the world’s known reserves of the minerals essential to the energy transition and to emerging industrial technologies. The figure appears so frequently in policy papers and investor decks that it has become almost rhetorical, a shorthand for potential rather than a measure of realised strategy. But that is beginning to shift, at least at a discernibly faster pace.

Over the past year, policymakers across several of the continent’s major producers have advanced new mining frameworks built around local content and domestic participation. The aim is to draw processing and manufacturing capacity closer to the resource, creating beneficiation within national economies and attracting investment into the wider mining ecosystem rather than into extraction alone.

The direction has been welcomed by those who see it as a long-overdue alignment between resource ownership and national development. It remains important to attract capital and create a friendly  investor environment for mining and  capital-intensive projects.

Countries like Botswana and Ghana have become emblematic of policies and strategies designed to strengthen the mining industry by building national participation, diversifying away from historically dominant commodities, and improving regulatory coherence.

Botswana, for example, is actively diversifying its mining sector beyond diamonds, largely in response to sustained headwinds in the diamond market. Diamonds still dominate the economy – accounting for about 80% of export earnings, one-third of fiscal revenue, and roughly a quarter of GDP – making Botswana the world’s largest diamond producer by value. But policy and investment attention are now shifting toward critical minerals such as copper, nickel, soda ash, salt, manganese, lithium, uranium, and gold, driven by global demand for clean-energy inputs. Exploration activity in the Kalahari Copper Belt and Tati Greenstone Belt has intensified, increasingly supported by new geological and data-driven techniques, with multinational firms such as BHP and domestic operators committing capital to battery-metal and gold projects intended to move the industry closer to value addition and long-term sustainability.

In October of 2025,Botswana’s Mines and Minerals (Amendment) Act No 14 of 2024 officially came into effect, introducing reforms to promote beneficiation and enhance citizen participation in the country’s mining industry. Among its provisions: a 24% citizen equity participation requirement – including a clause that, if the State does not exercise its interest, the block must be offered to citizens or citizen-owned companies; and a mandatory environmental rehabilitation trust fund or financial guarantee from a Botswana-registered bank. For investors, Botswana’s trajectory offers a study in how regulatory tightening can coexist with opportunity.

The country retains one of the most liberal financial regimes in Africa, with no exchange controls and straightforward capital repatriation, which simplifies cross-border investment structures. Its political stability and consistent policy execution continue to rank it among the continent’s most reliable jurisdictions for mining capital.

New opportunities are emerging for investors attentive to the ecosystem outside extraction. Skills development and technology adoption are becoming priority areas, with increasing use of AI-driven exploration, digital geological modelling, and automation to improve safety, efficiency, and resource recovery while reducing costs.

The same can be seen in Ghana. Last year, Africa’s top gold producer announced plans to shorten mining licence durations and introduce direct revenue-sharing with local communities – its most far-reaching overhaul of mining law in nearly two decades. The reforms aim to tighten accountability and anchor mining benefits more visibly in local economies. Licences will be time-bound rather than open-ended, with renewal tied to environmental, social, and production performance. Revenue flows, once centralised, will now be partially redirected to host communities through fixed-percentage contributions, replacing the older system of discretionary development agreements. The framework also proposes a clearer licensing structure for mid-tier operators and a review of stability agreements, aligning fiscal terms more closely with project lifecycles. The other side is the existence of the local content law, which prescribes that certain aspects of mining activities are the preserve of Ghanaian owned entities. E.g. all surface mining contract activities are the preserve of 100% owned Ghanaian companies. For underground mining operation, ownership must be not less than 30%.

At the same time, policymakers are acutely aware of the risk that comes with Ghana’s dependence on gold, which accounts for close to 90% of total mineral export revenue. High prices have shielded the economy in recent years, but they also mask the vulnerability of relying on a single commodity exposed to global cycles and geopolitical shifts. In response, government strategy has turned toward broadening the mineral base. Lithium discoveries in commercial quantities have opened a new frontier, though subdued international prices have delayed full-scale development. The state has also renewed focus on manganese and bauxite, directing new investment into production and downstream capacity, while exploration for copper is beginning to attract interest from both domestic and international firms.

The underlying intent is clear: to use the current gold windfall to finance a transition toward a more balanced and resilient mining economy.

These reforms, combined with a more stable macroeconomic environment, have strengthened Ghana’s investment climate. The recent appreciation of the cedi and the rebuilding of foreign reserves have improved financial predictability, while policy has remained pragmatic and growth oriented. For investors, this signals a jurisdiction where regulation and macro management are beginning to reinforce each other; a market in which both capital and long-term participation can be reasonably protected.

What is unfolding in Botswana and Ghana forms part of a broader continental pattern, and it is being shaped with intent.

Last year, the African Union released its Africa’s Green Minerals Strategy, a plan to use the continent’s mineral wealth to drive value addition at source, regional industrialisation, and climate resilience. The strategy recognises that Africa must move beyond raw exports and build integrated value chains that support jobs, skills, and diversified growth.

What stands out is that the continent is not closing itself to global capital in the process. It is making partnership more transparent, access more structured, and alignment with national priorities more deliberate – reshaping the terms of engagement between African resource holders and international investors. For those able to adjust to this new order, Africa’s mining sector offers the chance to participate in one of the most important industrial transitions of the coming decades.

Thuso Tseetse, Head of Natural Resources, Botswana and Reindolf Ofosu-Hene, Head of Natural Resources, Ghana at Absa CIB

By Shirley Webber and Stephen Seaka

In 2023, a mine operating along the Central African Copperbelt moved its first test consignment through the Lobito Corridor, using the refurbished rail spine that links the Democratic Republic of Congo to Angola’s Atlantic coast. Roughly 1100 tonnes of copper concentrate from the Kamoa-Kakula complex in Kolwezi were loaded at the Impala Terminals facility and sent west by rail to the Port of Lobito. The journey took eight days. Until this trial run, more than nine-tenths of the mine’s output had been routed through Durban or Dar es Salaam, where a single turnaround typically stretched to six weeks.

Angola, the DRC, and Zambia have positioned the corridor as a flagship, with financial and political backing from the United States, Italy, the European Union, and a coalition of multilateral financiers under the G7’s Partnership for Global Infrastructure and Investment and the EU’s Global Gateway. The goal is to create an alternative westward route for copper and cobalt exports, reducing dependence on longer paths through South African and East African ports, lowering transport times, and de-risking supply for battery and clean-energy manufacturers.

Seen from within the continent, though, Lobito matters for another reason.

It shows how a corridor can become the organising unit of industrial strategy, because the infrastructure that moves ore and the systems that govern its movement naturally operate beyond national borders. It also forces a more fundamental question onto the table: if the next generation of global industry is going to draw on Africa’s critical minerals, what scale of planning can genuinely support that opportunity? In practice, the geology is regional, but industrial policy is still national. Lobito exposes that mismatch and demonstrates how coordinated corridors can begin to bridge it.

Africa holds close to a third of the world’s known reserves of future-facing minerals. These include the metals driving the global energy transition – copper, cobalt, manganese, graphite, nickel, lithium and the platinum group metals – as well as a broader suite of inputs used in advanced manufacturing and emerging digital technologies, from rare earth elements to titanium and vanadium. But they are dispersed: copper and cobalt across the Central African Copperbelt; lithium, nickel and graphite across Southern Africa; manganese and PGMs across South Africa, Botswana and Zimbabwe; bauxite concentrated in Guinea; and rare earth prospects emerging through Namibia and parts of East Africa.

With the IEA projecting sharply higher demand for key battery metals and transition-linked commodities over the next two to three decades, Africa’s mineral endowment places it at the centre of an emerging geopolitical and industrial reordering.

This makes the case for regional thinking almost self-evident, at least one would think.

But many continental strategies blur the distinction between regional cooperation and regional approaches to beneficiation. Regional cooperation is about how states organise the rules of the game across borders. It includes tariff alignment, customs procedures, rail and port concessions, environmental and social standards, power-pool governance, dispute-resolution mechanisms and the regulatory treatment of long-term PPPs. Regional beneficiation, by contrast, is about where along the value chain different activities sit and how those activities are sequenced. Ore can be crushed, concentrated, smelted, refined, turned into precursors, assembled into components and eventually integrated into finished products. Some of these steps require substantial power and water; some are knowledge-intensive; some are highly trade-exposed and shaped by logistics costs. It seldom makes sense to duplicate each step in every country that hosts a deposit. It is more efficient to map which segments of a copper-cobalt-manganese-lithium chain should sit in which locations along a corridor, then design fiscal regimes, power investments, and skills programmes accordingly.

The continental policy landscape is beginning to move in this direction. The African Union’s Green Minerals Strategy positions critical minerals as a regional industrialisation opportunity and promotes integrated value chains and corridor-based infrastructure planning. The Regional Economic Communities – SADC, COMESA, ECCAS and others – provide sub-continental platforms that could support this kind of coordination, although their mining and industrial frameworks are uneven. Nonetheless, they offer the institutional footing on which more deliberate regional planning can be built.

In practice, turning these frameworks into functioning corridors requires a different discipline from governments. It means treating a corridor as a single planning unit for power, water, data connectivity and skills, even while it traverses several jurisdictions. It means aligning fiscal terms enough to prevent destructive competition for smelters and refineries, while allowing differentiated incentives where countries have distinct industrial strengths. It also demands joint approaches to environmental and social governance, so that high standards become a feature of the corridor rather than a source of regulatory arbitrage. These elements form the operational foundation on which regional value-chain design can take shape.

The private sector sits at the centre of whether this works. Mining companies and their supply chains will not commit to multi-decade smelting or refining investments unless they see predictable corridor-wide frameworks on transport, power pricing, fiscal regimes and environmental standards. Battery and EV manufacturers will only treat African corridors as strategic production nodes if they can access sufficient scale, consistent quality and credible delivery timelines. Regional banks and DFIs will structure project finance and corporate facilities more confidently when risk is shared across a corridor with pooled revenue streams rather than tied to the fiscal position of a single sovereign.

Africa does not have the luxury of treating regional cooperation and regional beneficiation as afterthoughts.

If the continent continues to negotiate in small, fragmented units, the result will be a patchwork of export restrictions and incentive schemes that strain investor confidence without building the connective tissue of shared infrastructure and industrial capacity. If, instead, leaders use projects such as the Lobito Corridor as prototypes for how to align geology, logistics, and industrial policy at a regional scale, the continent can begin to shape global value chains rather than simply feeding into them.

Shirley Webber, Coverage Head for Resources & Energy and Stephen Seaka, Managing Executive for Public Sector & Growth Capital Solutions at Absa CIB

By Kumeshen Naidoo and Narisa Balgobind

Kenyan beverages giant East African Breweries recently refinanced an existing KES 11 billion corporate bond through a medium-term note priced at 11.8%, marking the first issuance under its newly approved KES 20 billion programme. The timing mattered. Kenya’s 10-year government bond yield had eased to around 13.3%, its lowest level since mid-2022, which made the economics of refinancing workable again. The offer received strong demand, driven by active participation from banks, fund managers, pension schemes, and retail investors. This resulted in an oversubscription of 152.4%, which in turn allowed EABL to upsize the issuance to KES 16.7 billion.

What that deal underlined is a point many practitioners make when they look at African markets: liquidity does exist for the right opportunities. The market has grown, rates have started to come off their post-pandemic highs, and that shift is beginning to change borrower behaviour. As the cost of funding becomes less punitive, investment decisions that were previously deferred are returning to the table, including acquisitions and expansion activity where financing plays a critical role.

This opens the space to think more creatively about funding structures and where capital is best deployed.

As most businesses grow and their funding requirements evolve, borrowers begin to look beyond traditional bank funding towards a broader range of available funding sources. Borrowers increasingly challenge pricing, terms and conditions, the funding purpose, and the level of security they are willing to provide. At this stage, transactions often shift into the syndicated loan space. According to the OECD, syndicated lending in Africa has expanded significantly over the past two decades, with issuance and outstanding volumes almost doubling. These types of transactions are often more nuanced and require a higher level of sophistication.

Accessing the continent’s bond market, however, is far more involved.

Issuers need to prepare an issuance programme, appoint arrangers, external legal counsel, trustees, paying agents, and calculation agents, engage with investors, comply with listing rules, and meet ongoing disclosure requirements around financial reporting. It is no wonder then that Africa’s corporate bond issuance has been particularly weak, with outstanding amounts falling from USD 52 billion in 2010 to USD 38 billion in 2024, according to the OECD. It also found that despite Africa contributing 2.5% of global GDP, it only contributed 0.1% of the global Corporate Bonds outstanding.

Yet there is significant room for development.

Regulation itself is not the constraint; most African markets have straightforward issuance and listing requirements. What differentiates outcomes is scale, understanding, and flexibility. Those factors ultimately shape whether an issuer accesses the bond market or remains in the loan market, which is typically easier to navigate and more adaptable.

In some cases, issuers can access the bond market at a significantly lower cost, sometimes at levels the loan market cannot match. In practice, this usually applies to specific parts of a transaction rather than the entire structure. As a result, blended financing then becomes more common, allowing borrowers to combine lower-cost market funding with loans or other instruments that provide the flexibility, tenor, or risk coverage. And this is starting to feature more prominently on the continent. According to research by Convergence, Africa accounted for around 40% of global blended finance transactions in 2024, representing roughly a third of total volumes transacted, and reflecting  the evolution of capital  markets towards more structured solutions rather than reliance on a single instrument

Looking ahead, innovation in Africa’s capital markets is likely to focus on developing new products and demonstrating the ability to execute transactions. When East African Breweries first accessed the Kenyan bond market in 2021, it marked the first corporate issuance in that market in nearly five years. The transaction helped reopen the market and signaled to other issuers that investors were active, execution was achievable, and that pricing could be made to work.

Outside South Africa, capital markets across much of the continent are relatively shallow. That limits how effectively domestic savings can be channeled into long-term investment. Equity markets are small and thinly traded, and bond markets lack the depth and reference points that make pricing and secondary activity easier. To foster real development across the continent, this is where the focus must be.

Kumeshen Naidoo, Head of Debt Capital Markets, and Narisa Balgobind, Head of Debt (AR), at Absa