Cape Town - Cape Town has “every possibility” of achieving the status of a global financial services centre like London and Geneva with the opportunity to serve the new wealth of Africa, as the industry could be more valuable than its gold and diamonds.
It has “talent galore” in financial services, a friendly climate, compelling scenery and all the good things the world's high-net value individuals seek in an investment destination, but Michael Lafferty – executive chairperson of the Retail Banking Academy of London which is part of the Lafferty Group - said a lack of political will to achieve this dream may hand the mantle to another destination: an obvious example being nearby Mauritius.
Lafferty, a former Financial Times banking writer who addressed bankers and financial services executives in Cape Town on Monday, pointed out certain obstacles in the way of achieving this dream. “You know more about the politics (of South Africa) and the problems associated with (the) politics than I do,” said Lafferty, but noted that Cape Town did not have anyone “who can talk for it” on the global stage.
It is also “an absolute disgrace” that the national airline, South African Airways, no longer has a direct flight from Cape Town to the world’s financial capital, London. Remaining exchange controls are also an obstacle.
To achieve the dream of Cape Town becoming a new Singapore of Africa, he said there needs to be cross-political party teamwork with bankers and players in the financial services sector. “You don’t have a strong body to promote Cape Town. (It) probably has the best case in the world (to become a global financial capital), but are you going to allow Mauritius to grab it?”
He recently held talks with the Mauritius central bank governor, Rundheersing Bheenick, who was applying his mind to making his country a global centre for international investment with a focus on the opportunity of the century, the African continent with a burgeoning middle class, booming small business environment and massive largely untapped consumer market – especially in retail banking.
Between Mauritius and Cape Town
“The governor of the (Mauritian) central bank is totally committed to it. I was there two weeks ago. I was saying to him… It is between you (Mauritius) and Cape Town.”
Pressed on what was the recipe for South Africa to telescope Cape Town to the position of a world financial services capital, he said there needs to be an alliance of political parties, the professionals, the academic community and the financial institutions “saying we are special”.
If the main governing party has a different agenda “and an anti-Cape agenda… that will not help”.
South Africa also needs to launch new banks to serve local communities. The United States has over 6 000 privately-owned banks. On a comparable basis, South Africa "ought to have 1 000 banks".
Asked whether the African Bank experience was not off-putting to those wishing to bank the poor, Lafferty said the biggest problem with corporate banks is "they don't have a clue about the consumer". He said African bank had been "lending wrong.. you don't borrow short and lend long".