AI Issue 5 2017

Acquisition International - May 2017 47 Striving for Excellence in Banking donor support towards some African economies, but the near-term risk for African firms and economies is the high likelihood of a stronger Dollar over the course of the year, which could also lead to more expensive rates for Dollar debt. “The Trump administration has also proposed to reduce taxes in the US and this has prompted the US Federal Reserve to flirt with the possibility of raising rates faster in 2017 in an attempt to reign in any potential inflationary threats owing to the likely reduction in taxes.” The Kenyan economy is not heavily reliant on donor flows but most textile firms in Kenya export to the US, Ben explains, adding that should there be any disruption in the trade relations between Kenya and the US, textile firms could face severe headwinds. Ben then explains this interesting point in his own words. “In this world of uncertainty with Trump and Brexit, the two key strategies that will make firms resilient are ‘diversification and appropriate risk management’. For instance, should a horticulturist expect their GBP revenue from UK to slow down after Brexit, they should perhaps look to hedge this currency risk. “Alternatively, as demand for products from the UK is likely to subside over the coming years, firms need to try and look for new developing source markets so as to minimise the revenue concentration risk away from the UK. “The same goes for an importing firm which could be worried about the Dollar soaring against African currencies from Trump’s tax proposals, and in this case, the hedging strategy should be adopted. Also, should the firm in question have any outstanding Dollar debt, they should quickly consider to swap the debt currency or fix the interest rate in order to enhance profitability.” Ben then wraps up what has been a very interesting interview indeed, by reflecting on his aspirations for his employer as it continues its exciting journey in 2017 and beyond. “As we continue to operate in a turbulent micro- economic environment, my future aspiration for Stanbic Bank Kenya is to continue driving the acquisition of profitable transactional customers whose ecosystems we will support for our mutual growth and thereby build a sustainable bank that will continue to deliver acceptable returns to our shareholders. “If we can achieve this, while keeping our people excited about coming to work daily, the knock-on effect will effectively transcend to our customers and as an organisation and we will certainly touch many lives and contribute to our country and the continent’s growth.