MARKET DEVELOPMENT
Africa Must Process Primary Commodities Before Export
Africa Must Process Primary Commodities Before Export
25/03/2016 (Southern Times Africa) – The African Export-Import Bank’s (Afreximbank) wants to see African businesses acquire state-of-the-art equipment to be able to process raw materials so that when they trade, they can bid their goods at the highest value in the supply chain and subsequently create jobs in their respective countries.
These tallies in with the Southern African Development Community as well as the Africa Union’s positions adopted last year for the beneficiation of primary products from the continent so that they fetch more on the international markets. Afreximbank’s manager for project and export development finance, Oluranti Doherty, who is based in Cairo, Egypt, said oil, diamonds and many other commodities were taken away from Africa in their raw form but were brought back to Africa after processing and purchased at high prices.
“It means that we are losing a lot. The bank wants to find a way to move things. How do we assist member countries?
For us, it is stimulate consistent expansion of African trade to reduce dependency on commodity export (and) to reduce exposure to volatility in commodity trading,” she stressed.
Doherty was speaking at the Afreximbank business forum in Windhoek, Namibia, last week held under the theme “Promoting Economic Development and Diversification Through Trade”.
She said the bank’s export development programme was aimed at facilitating non-commodity export production and adding value to commodities, in order to exploit intra Africa trade opportunities.
“There is so much we can do between ourselves in terms of trade. Namibia is a great exporter of diamonds; why not have a big processor of diamonds here? Why should China or India continue to be the major diamond processing centres of the world?”
Gift Simwaka, Afreximbank’s regional manager for the southern Africa office based in Harare, Zimbabwe, said the bank has the capacity to facilitate intra-African trade and global trade through financing and it could finance enterprises for exportation of goods from the point of export to post shipment.
This is to enhance the ability of business to trade, according to Simwaka, Afreximbank also extents short and medium term credit to African exporters and provides insurance and guarantees for payment from buyers.
“Africa is considered high commercial risk, especially (because of) governments that overextend their mandates,” he pointed out, adding that many businesses, especially in the Western world, get worried when they do business with Africa because of high volatility.
However, he said the bank could act as the go-between for African markets and foreign markets to provide guarantees so that if a loss arises due to political risks, it is able to compensate the other party.
The bank’s aim is to remove bottlenecks to the trading of products already produced or near production and able to enter trade with facilities organised under dual and non-dual recourse programmes.
Afreximbank also provides capital for African exporters through equity investment including shares, loans and creates a venture fund across the African continent to enable good business ideas to come to fruition, according to Simwaka.
The bank was established in Abuja, Nigeria, in 1993 by African governments, African private and institutional investors as well as non-African financial institutions and private investors to finance, promote and expand intra-African and extra-African trade.
It was established under the twin constitutive instruments of an agreement signed by member states and multilateral organisations, and which confers on the bank the status of an international multilateral organisation, as well as a charter, governing its corporate structure and operations, signed by all shareholders.
The authorised share capital of the bank is US$5 billion.
Afreximbank’s headquarters is in Cairo, Egypt, and it has branches in Harare, Zimbabwe; Abuja, Nigeria; Abidjan, Ivory Coast, and Kenya, Nairobi.
Currently, Afreximbank has 37 participating states across Africa, including Namibia, Zimbabwe, Zambia, Lesotho, Botswana and Angola among countries in the SADC. South Africa is expected to come on board by the end of March 2016, according to Simwaka.
Among some of the special initiatives, it has undertaken financing a 250 million Euro bridge loan facility in Ivory Coast; providing trade debt-backed securities in support of Zimbabwe’s banking sector to the tune of US$200 million; and providing a US$300 million syndicated term loan facility to finance a 300 hectare oil plantation and palm oil processing plant in Gabon.
These tallies in with the Southern African Development Community as well as the Africa Union’s positions adopted last year for the beneficiation of primary products from the continent so that they fetch more on the international markets. Afreximbank’s manager for project and export development finance, Oluranti Doherty, who is based in Cairo, Egypt, said oil, diamonds and many other commodities were taken away from Africa in their raw form but were brought back to Africa after processing and purchased at high prices.
“It means that we are losing a lot. The bank wants to find a way to move things. How do we assist member countries?
For us, it is stimulate consistent expansion of African trade to reduce dependency on commodity export (and) to reduce exposure to volatility in commodity trading,” she stressed.
Doherty was speaking at the Afreximbank business forum in Windhoek, Namibia, last week held under the theme “Promoting Economic Development and Diversification Through Trade”.
She said the bank’s export development programme was aimed at facilitating non-commodity export production and adding value to commodities, in order to exploit intra Africa trade opportunities.
“There is so much we can do between ourselves in terms of trade. Namibia is a great exporter of diamonds; why not have a big processor of diamonds here? Why should China or India continue to be the major diamond processing centres of the world?”
Gift Simwaka, Afreximbank’s regional manager for the southern Africa office based in Harare, Zimbabwe, said the bank has the capacity to facilitate intra-African trade and global trade through financing and it could finance enterprises for exportation of goods from the point of export to post shipment.
This is to enhance the ability of business to trade, according to Simwaka, Afreximbank also extents short and medium term credit to African exporters and provides insurance and guarantees for payment from buyers.
“Africa is considered high commercial risk, especially (because of) governments that overextend their mandates,” he pointed out, adding that many businesses, especially in the Western world, get worried when they do business with Africa because of high volatility.
However, he said the bank could act as the go-between for African markets and foreign markets to provide guarantees so that if a loss arises due to political risks, it is able to compensate the other party.
The bank’s aim is to remove bottlenecks to the trading of products already produced or near production and able to enter trade with facilities organised under dual and non-dual recourse programmes.
Afreximbank also provides capital for African exporters through equity investment including shares, loans and creates a venture fund across the African continent to enable good business ideas to come to fruition, according to Simwaka.
The bank was established in Abuja, Nigeria, in 1993 by African governments, African private and institutional investors as well as non-African financial institutions and private investors to finance, promote and expand intra-African and extra-African trade.
It was established under the twin constitutive instruments of an agreement signed by member states and multilateral organisations, and which confers on the bank the status of an international multilateral organisation, as well as a charter, governing its corporate structure and operations, signed by all shareholders.
The authorised share capital of the bank is US$5 billion.
Afreximbank’s headquarters is in Cairo, Egypt, and it has branches in Harare, Zimbabwe; Abuja, Nigeria; Abidjan, Ivory Coast, and Kenya, Nairobi.
Currently, Afreximbank has 37 participating states across Africa, including Namibia, Zimbabwe, Zambia, Lesotho, Botswana and Angola among countries in the SADC. South Africa is expected to come on board by the end of March 2016, according to Simwaka.
Among some of the special initiatives, it has undertaken financing a 250 million Euro bridge loan facility in Ivory Coast; providing trade debt-backed securities in support of Zimbabwe’s banking sector to the tune of US$200 million; and providing a US$300 million syndicated term loan facility to finance a 300 hectare oil plantation and palm oil processing plant in Gabon.