A lot of noise has been made around the world and more specifically in Africa about the impending Big Barclay’s exit. As an entrepreneur does it hurt the chances of me growing my business? Why are people making this such a big deal? How will it affect us at the end of the day? What consequence will it have on the grand scheme of helping or hurting Africa rise? So many questions but no worries Inspire Afrika is here to provide the answers!
First things first! Let’s lay out the facts:
There is the Barclays Africa Group and the Barclays Plc. The former is a subsidiary of the latter, where the former is a shareholder among other companies; Barclays Plc currently hold a 62% share in the Barclays Africa Group. So when the Barclays Plc announce that they are pulling out of Africa this does not mean that there will be no Barclays on the continent anymore. But simply that the parent company (Barclays Plc) will no longer be a shareholder.
Secondly, why is this happening?
Simply put when the economic crash of 2008 happened a lot of banks suffered. Even huge banks like the Lehman Brothers were completely liquidated but somehow Barclays was smart and managed to survive. But like most things in life, this came at a cost. Many speculate that while they were doing well then, a lot of the symptoms -such as having to be more cautious with their expansion plans- of the crash are affecting them now. This would serve as justification for them having to downsize their interests in order to regroup. From the standpoint of the board sitting in London, it just makes sense to ‘pull out’ of Africa, in their eyes we are expendable.
The decision to leave Africa allegedly began to take form when President Zuma of South Africa hired and fired two different finance ministers in one week, seemingly without providing sufficient reason to do so. This move apparently sent the big executives in London shaking with fear about the volatility of the African markets. Which again from a business standpoint share prices fell in reaction to the move.
Lastly, how and why does this affect me?
Imagine a big round uncut cake. Now imagine this cake is Barclays. Now imagine 62% of the cake being taken away, which is what is going to happen. Not all at once but it is probable that within two years the move will be complete. What this means is that there will be times that finances within Barclays Africa Group will be unstable as it readjusts itself. But more than this, it allows African owned businesses or individuals to buy some or all of that 62%. This is something that me as an individual can get behind!! We, Africans can have a majority say in one of the biggest companies on the continent. As an entrepreneur this means that other Africans who understand your needs will be at the helm of decision making in one of the biggest organizations on the continent. They will be able to use this position to support emerging businesses which will ultimately see the continent prosper beyond any of our expectations.