The alliance goals to behave as a pipeline for companies in Europe and Africa to leverage funding alternatives throughout the 2 areas.
Deal modelled to capitalize on Africa’s untapped potential and Europe’s superior entrepreneurial and tech skill to drive investments.
The 2 events have recognized demography, decarbonization, digitization, and derisking as causes for Europe’s rising curiosity in Africa.
Monetary companies big ODDO BHF from Germany has taken a step ahead in fostering cross-continental financial collaboration by signing a memorandum of understanding (MOU) with regional lender Fairness Group.
This alliance, which was formalized through the German-Africa Enterprise Summit in Nairobi, goals to behave as a pipeline for companies in Europe and Africa to leverage funding alternatives throughout the 2 areas.
Dr. James Mwangi, Managing Director and CEO of Fairness Group, alongside Florian Witt, Head of Company Banking at ODDO BHF, signed the settlement that’s modelled to capitalize on Africa’s untapped potential and Europe’s superior entrepreneurial and technological assets to drive investments.
“We’re in search of a strategic partnership that bridges Africa and Europe, enabling companies from each continents to work collectively and broaden alternatives,” mentioned Dr. Mwangi. He cited Africa’s huge assets—human capital, arable land, renewable power potential, and strategic minerals—paired with Europe’s technological and entrepreneurial experience as important elements that may energy industrialization at scale.
This synergy may fast-track Africa’s growth and improve the standard of life for its roughly 1.4 billion folks.
Altering the funding perceptions about Africa
Florian Witt of ODDO BHF countered conventional misconceptions in regards to the danger of doing enterprise in Africa. “We now have operated in Africa for many years and located it to be sustainable, secure, and worthwhile,” he mentioned, including that the perceived dangers are removed from the fact.
Witt highlighted 4 key drivers—demography, decarbonization, digitization, and derisking—as causes for Europe’s rising curiosity in Africa.
The 4 ‘D’s: Why Africa?
Demography: Africa’s youthful inhabitants presents vital human capital, which the ageing populations of Europe want. “Europe is capital-rich, and financing worth chains in Africa is vital to reaching larger yields to assist our retirement methods,” Witt defined.
Decarbonization: Africa’s renewable power potential aligns with Europe’s push for a greener financial system.
Digitization: “What Fairness can do for retail prospects, most European banks can’t,” Witt remarked. Africa’s innovation in telecom-based cost methods, similar to Kenya’s cellular cash options, presents helpful classes for Europe, the place laws usually slows digital adoption.
Derisking: Witt identified Europe’s over-reliance on provide chains in China and Russia. “We at the moment are reaching out to Africa. This may be a possibility for all if we function on equal phrases,” he mentioned.
Addressing international geopolitical challenges
Dr. Mwangi framed the alliance as a response to shifting international dynamics. “The problem of world geopolitics presents a possibility to redefine financial fashions. Companies like ODDO and Fairness can select to collaborate and form a brand new future,” he mentioned.
The settlement goals to determine equal partnerships that transcend historic imbalances, guaranteeing mutual advantages for each continents. Fairness is ready to tackle the danger of European companies getting into African markets by offering native forex debt to mitigate forex mismatch dangers.
Affect Investing: Fairness-ODDO BHF shared imaginative and prescient
Past business pursuits, the partnership focuses on influence funding. Fairness Group Basis (EGF) and ODDO’s basis will collaborate on initiatives in reforestation, schooling, renewable power, and agriculture.
Witt lauded Fairness Group Basis’s work, calling it a job mannequin in company social accountability. “Fairness’s basis is among the many largest globally per capita. This collaboration will place Fairness amongst international monetary giants,” he mentioned.
A basis for sustainable progress
The MOU builds on earlier collaborations between Fairness Group and German establishments. Notably, the current institution of a German Desk at Fairness Financial institution highlights the deepening ties between the 2 entities. This platform, supported by the German Growth Finance Establishment (DEG), positions Fairness as a bridge for European companies to faucet into African markets.
Dr. Mwangi underscored the similarities between Germany and Africa’s financial buildings. “Germany’s financial system is constructed on small and medium enterprises (SMEs), very like Africa’s micro, small, and medium enterprises (MSMEs). Fairness brings the eagerness to see a remodeled Africa, which in the end contributes to a sustainable world,” he mentioned.
ODDO BHF’s position within the partnership
ODDO BHF, a number one European monetary group specializing in personal banking, asset administration, and company banking, brings in depth experience to the alliance. Its dedication to sustainable investments and commerce financing is anticipated to unlock vital alternatives throughout Africa, together with areas just like the Democratic Republic of Congo (DRC).
The Fairness-ODDO BHF alliance represents a strategic transfer to reshape the Europe-Africa financial relationship, fostering sustainable progress and innovation. By leveraging their strengths, Fairness and ODDO are paving the best way for a future the place cross-continental partnerships may drive prosperity for all stakeholders.
As Dr. Mwangi aptly put it, “A remodeled Africa means a sustainable world. That is the inheritance we wish to depart for future generations.”
Learn additionally: How subsidiaries buffeted Fairness Group’s $230M half-year earnings
