A Positive and Diverse Relationship with Africa

The past month gave us ample opportunity to do that in the context of Africa – a market where we are seeing rapid diversification in terms of the type of work and services Jersey firms are doing with African investors, families, companies and asset managers to support their success.

Jersey firms and Jersey Finance have been visiting Africa for several decades, but it was back in 2014 that Jersey produced its first research paper focused on Africa – ‘Jersey’s Value to Africa’. It found that Africa offers enormous potential, with a growing young population estimated to drive economic growth by 5% per year until 2040. But to do that, significant amounts of private capital would be needed, around US$6 trillion in fact – and that’s where international finance centres like Jersey have a role.

Recognising the potential, we built on this theme in our ‘Jersey’s Contribution to FDI’ paper in 2016, which further supported the idea that Jersey has the capacity and skills to support private and institutional investment into African markets. It found that around one fifth of Jersey’s outbound Greenfield FDI was being channelled into Africa.

And our latest report, ‘Jersey’s Contribution to Global Value Chains’, takes the idea even further. It found that Jersey’s global economic footprint and its contribution to global value chains (GVCs) supports £170.3 billion of global GDP on average each year, of which £6 billion of GDP growth relates to Africa. That investment in turn helps support more than 900,000 jobs in Africa, according to the study.

The links between Jersey and Africa have clearly grown over the past few years, and our latest visit to Africa over the course of June really did give us an incredibly valuable opportunity to drive home these ideas even further among key stakeholders and provided a showcase for Jersey’s ongoing evolution in the African market.

In Kigali, Rwanda, I was fortunate enough to present compelling reasons to an audience at the Commonwealth Heads of Government Meeting (CHOGM) Business Forum, as to why Jersey’s approach to innovation and collaborative, strategic decision-making between Government, industry and regulator can continue to support economic growth across the Commonwealth.

In addition, our Nairobi roadshow, included a series of events, focusing on sustainable finance, private wealth, corporate services, funds, family businesses, and infrastructure. A key message delivered at these events was that Jersey is in a prime position to be at the forefront for supporting new, and absolutely critical, waves of investment into Africa as the continent recovers from the pandemic – attracting capital to the continent and creating jobs.

We also continued to drive up our visibility in South Africa having recently published a private wealth focussed report on Jersey for South Africa. This also built on our attendance at the SAVCA Private Equity Conference in Cape Town in May – where we highlighted that using Jersey for South African fund assets is on the rise; with 2021 statistics showing a 38% year-on-year increase.

Misconceptions still exist, though – in particular, the notion that Jersey’s connection with Africa is about supporting outbound investment for wealthy African families. In one interview I did while in Kigali with CNBC Africa, for example, I was challenged on Jersey’s role and was able to explain to a valuable audience how Jersey’s platform helped pool capital and redistribute it globally.

I explained that Jersey is enabling asset managers in exciting, emerging areas such as venture capital, tech, digital assets and renewable energies to raise investor capital and access investor geographies they hadn’t previously had access to. I also highlighted that Jersey offers investors in Africa access to expertise in growing sectors such as sustainable finance, private wealth, investment management, corporate services and funds/capital raising, all in an environment that is politically and economically stable.

And significantly, I was able to clarify how Jersey is attracting international investment and driving it into African economies and show how the investment Jersey supports into Africa is not just a one off, but a capital injection that generates multiples, as part of value chains.

This year marks a significant year of progress in terms of our relationship with key African markets. Our activity on the ground in Africa over the past month or so has provided a flavour of just how Jersey is diversifying its proposition for supporting inbound and outbound investment to the continent, often in surprising and innovative ways.

It’s a two-way relationship, enabling African investors to realise their global ambitions, while also facilitating growing amounts of capital into a continent that continues to offer amazing potential.

There’s no doubt Jersey wants to be part of Africa’s success story, which is why we’ll be returning later this year to South Africa. I hope to see you there.