Port Louis, 21 November 2016 – With international banks once again withdrawing from African trade finance and with the continent’s trade finance gap estimated at more than $120 billion, African banks, have an opportunity to step in, through structured trade finance, to ensure that Africa, never again descends into economic chaos because of a sudden withdrawal of international banks, Dr. Benedict Oramah, President of the African Export-Import Bank (Afreximbank), said today.
In an address in Port Louis, Mauritius, during the opening of the Afreximbank Annual Structured Trade Finance Seminar and Workshop, Dr. Oramah said that unlike in the 1990s, structured trade finance had emerged a well-proven ammunition to deal with the risks presented by the environment, including the tightening of credit conditions, worsening of trade finance conditions and decline in the willingness to supply international trade finance in Africa despite increasing demand.
He noted that unlike in the 1980s when there were no pan-African banks, today, pan-African banking had taken root with the likes of Ecobank, UBA, Bank of Africa, and State Bank of Mauritius (SBM), among others.
Dr. Oramah said that understanding structured trade finance would empower African trade finance professionals to deal effectively and decisively with the challenges confronting the continent.
He commended Mauritius for having successfully built its foundations on trade and for emerging a global export success, having jettisoned timidity and chosen openness.
In Mauritius, the four pillars of agriculture, tourism, financial services and manufacturing had combined to form a solid and diversified foundation for the economy, he noted, saying that the country reminded Africans from commodity dependent economies of “the folly of captivity by commodity illusion”.
The President announced that in the 16 years since its introduction, the Structured Trade Finance Seminar series had provided training to more than 1,600 African trade finance professionals, including bankers, traders, academics, regulators and others
In his contribution, Kee Chong Li Kwong Wing, Chairman of SBM, predicted a significant rise in African trade in the coming years and urged African banks to step up efforts to play key roles in that rise.
African banks need to take their destiny in their own hands by working to fill the financing gaps left as a result of the exit of international banks from the continent, he urged, stressing that all hands should be on deck for the achievement of that objective.
Declaring the seminar open, Rameswurlall Basant Roi, Governor of the Central Bank of Mauritius, urged African banks to give heightened attention to financing small and medium-sized enterprises (SMEs), given the important role they played in economic development.
According to the Governor, closing Africa’s trade finance gap required focusing attention on the neglected areas, particularly the SMEs,
The seminar is featuring speakers from some of the world’s top financial institutions, academic institutions and firms, as well as representatives from Afreximbank, the Central Bank of Mauritius, SBM, the Central Bank of Seychelles, Standard Chartered Bank, Mauritius Banker’s Association and the Loan Market Association.
The close to 200 participants from 22 countries include senior executives from African banks and financial institutions, regulatory institutions, hedge funds, Africa country funds and venture capital institutions, corporate entities engaged in trade, manufacturing and privatized infrastructure projects, Afreximbank’s trade finance and project finance intermediaries, African law firms and insurance firms are among participants expected at this year’s seminar.
The four-day training started today with the Structured Trade Finance Seminar November, to be followed on 23 November by a workshop on agency and syndications, focusing on the role of the Loan Market Association. A second workshop, titled “Making factoring work for Africa,” will take place on 24 November, with the objective of raising awareness of factoring as an alternative trade finance tool in Africa.
The holding of the Trade Finance Seminar and Workshop is part of Afreximbank’s effort to prepare African banks and financial institutions to meet the trade finance needs of the continent and is being organised in co-operation with the Central Bank of Mauritius and SBM.
1. Afreximbank President Dr. Benedict Oramah (2nd left) with (R-L) Kutoane Kutoane, Chief Executive Officer, Export Credit Insurance Corporation of South Africa; Kee Chong Li Kwong Wing, Chairman of SBM; and Obi Emekekwue, Afreximbank Head of Communications; during press conference after the opening of the Afreximbank Annual Structured Trade Finance Seminar and Workshop in Port Louis, Mauritius.
Media Contact: Obi Emekekwue (oemekekwue@afreximbank.com; Tel. +202-2456-4238)
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About Afreximbank:
The African Export-Import Bank (Afreximbank) is the foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organization, and the Charter, which governs its corporate structure and operations. Since 1994, it has approved more than $41 billion in credit facilities for African businesses, including about $6.2 billion in 2015. Afreximbank had total assets of $9.4 billion as at 30 April 2016 and is rated BBB- (Fitch) and Baa2 (Moody’s). The Bank is headquartered in Cairo. For more information, visit: www.afreximbank.com