Thursday, June 3, 2010

Setting Up Increased Trade between Africa and India - the Next Big Trade Route

South African President Jacob Zuma is currently on an official state visit to India accompanied by a trade delegation of leading South African business people. Nimesh Kampani, Chairman of JM Financial Group, and Sizwe Nxasana, CEO of FirstRand, signed this landmark MoU during the conference organised in Mumbai as part of this state visit.

Trade and investment between Africa and India is significantly on the rise, with India set to become one of Africa's major trading and investment partners over the next decade.

The bilateral trade between India and Africa is likely to grow by an estimated 22 percent in the next two years from the current levels of close to $45 billion to $55 billion in 2012.

Both economies offer tremendous growth potential given their large consumer base. The MoU signed between RMB and JM Financial will enable corporates at both destinations to explore and leverage opportunities in the economies of India and Africa.

According to the MoU, JM Financial and RMB will jointly provide M&A advisory services to:

- Indian clients seeking to make investments into entities or transactions in Africa; and
- South African and African clients seeking to make investments in entities or transactions in India.

Nxasana commented: "A partnership between RMB and JM Financial will unlock significant value for both parties by leveraging their individual expertise and sharing distinctive local market knowledge for the benefit of clients and shareholders."

In addition RMB's parent, FirstRand, is one of the largest financial services groups in Africa, and will provide JM Financial with opportunities to enhance its service to its domestic customers seeking to do business in Africa.

FirstRand also brings significant balance sheet capability to support future investment flows in the Indo-African corridor.

"This co-operation represents a significant step in furthering both RMB's and the Group's strategy to grow in the Indo-Africa corridor."

Kampani said: "In recent years, several Indian companies have shown interest in Africa. Both, Africa and India, are vibrant emerging economies, each with a rich resource base, a vast talent pool and low cost business models, offering immense business opportunities to investors, and thereby being a favourite investment destination world over."

"JM Financial's strong advisory and execution capabilities along with RMB's market knowledge and expertise will enable both parties to provide its clients with valuable advice and service. We are delighted to partner with RMB and FirstRand."

Also: South African President Sets Target of $10 billion trade between India and South Africa

- I-Net Bridge