THE United Bank for Africa, UBA, has signed a $100 million trade financing memorandum of understanding, MoU, with the Export-Import Bank of the United States (EXIM Bank) on the sidelines of the World Economic Forum, WEF, on Africa. Both institutions on Wednesday, May 11, explained that the MoU would provide up to $100 million to finance the purchase of American goods and services.
Fred P. Hochberg, chairman and president, EXIM Bank, and Philips Oduoza, group managing director, UBA, signed the MOU, with the goal of expanding trade between the US and sub-Saharan Africa. Shedding more light on the agreement, Oduoza, said, “For us in Nigeria and for our customers across Africa, it means that they have a source of funding for their transactions, especially the medium to long-term funds which you don’t normally find in the market easily.
“It implies that once you are importing goods from the US, then facility is available for you to draw upon. For us in Nigeria, for those that are involved in manufacturing, it will also assist them to a very large extent. So, it is not a question of one having a good project, but there are no financing. So, it provides liquidity and financing and enables businesses to produce effectively.”
According to the UBA boss, once an SME operator meets the requirements, he or she would be able to access the fund. Also, Hochberg said: “EXIM Bank is proud to build on its decade’s long commitment to financing American exports to sub-Saharan Africa.
“This memorandum signals to American exporters and African businesses alike that there are many more promising opportunities to work together, and EXIM stands ready to provide the financing needed to turn more of those opportunities into realities.”
The MoU is a statement of general intent between EXIM Bank and UBA to promote the availability of EXIM financing of up to $100 million in the region. EXIM Bank and UBA will work together to share information and develop export-financing opportunities in key sectors including commodities, agriculture and food products, spare parts, and large and small equipment purchases.
Under the MoU, EXIM Bank and UBA will explore options for offering a range of financing solutions for American exporters and African buyers, including short and medium-term financing programmes that allow for flexible repayment terms and competitive insurance policies guaranteed by EXIM.
Since 2009, EXIM has provided more than $6 billion in financing for transactions across sub-Saharan Africa. For the fiscal year ending in 2014, the Bank supported $2.05 billion in transactions in more than 20 sub-Saharan African countries. In 2014, the bank signed a $100 million MOU with the Eastern and Southern African Trade and Development Bank (PTA Bank) to finance US exports to the region that target both Diaspora businesses in the U.S. and PTA Bank’s member states.
— May 23, 2016 @ 01:00 GMT