Counter challenges of withdrawal of int’l banks with structured trade finance, Oramah tells Afican bankers

 

 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, November 21 2016.

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 as 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.