The African Export-Import Bank (Afreximbank) (https://www.Afreximbank.com/) has called on African countries to prioritize the development of public and private export trading companies (ETCs) in order to position the continent’s small and medium enterprises (SMEs) to participate effectively in global trade.
In an address to the Africa International Exhibition, which opened yesterday on the sidelines of the United Nations General Assembly in New York, Kanayo Awani, Afreximbank’s Executive Vice President, Intra-African Trade Bank, speaking on behalf of Bank President Prof. Benedict Oramah, said that SMEs participating directly in global trade faced stiff competition from multinational and significantly large corporates, making their chances of success or survival marginal, if not zero.
Mrs. Awani noted that Asia had addressed that challenge by establishing ETCs to act as conduits through which SMEs accessed global markets, explaining that ETCs acted as aggregators and created a sizeable volume of trade that attracted greater value and withstood competition.
She said that the limited participation of Africa’s SMEs in global value chains reflected institutional policy failure and called for strong policy support systems that would provide capacity developments, incipient protections from unfair competition, and improved access to regional markets and access to finance.
“These are particularly urgent as Africa commences implementation of the African Continental Free Trade Agreement (AfCFTA),” stated Mrs. Awani.
She announced that, over the years, SMEs had been a central focus of Afreximbank’s continental interventions through its export development SME-focused strategy, with unique funding instruments to bridge the financing constraints faced by African SMEs, including products, such as factoring, supply chain finance, and intermediated financing.
Mrs. Awani said that Afreximbank was the principal promoter of factoring in Africa and that the factoring law it sponsored had been adopted in the Republic of Congo, Burkina Faso, Niger, Togo, Mali, and Cote d’Ivoire and was under consideration by regulatory institutions in several other African countries.
The Bank was also enabling market access for African SMEs through the African Trade Gateway, a digital ecosystem that comprises assets designed to address non-tariff barriers, such as the MANSA customer due diligence repository platform which collects KYC information of SMEs and corporates and which had already onboarded more than 11,000 entities, she said.
Other Afreximbank interventions included the TRADAR Club, which delivers innovative digital tools and networking opportunities, helping SMEs to pursue scale and scope economies, the Pan-African Payment and Settlement System, which is an important mechanism for deepening the participation of SMEs in regional trade by allowing them to make payments for imports from the continent using national currencies, the creation of the Fund for Export Development in Africa, which provides venture capital to nurture startups, early-stage and emerging SMEs, and a number of other flagship initiatives.
The Bank’s Intra-African Trade Fair also provided an excellent platform to foster the integration of SMEs into continental value chains by promoting interconnections and networking, she added, noting that the third edition of the fair would be held in Cairo in November.
Ms. Awani announced that Afreximbank had launched a US$1-billion Creative Africa Nexus (CANEX) program to provide access to finance, capacity building, digital solutions, and other support to the African creative industry, noting that the industry had become one of the fastest-growing areas within the continent and that creatives had become major export earners in Nigeria, South Africa and a few other countries, topping traditional export goods. The Bank had disbursed about US$120 million to boost the industry, she added.
Other speakers at the event included President Bola Tinubu of Nigeria, who was represented by Dr. Doris Uzoka-Anite the Minister of Industry, Trade and Investment; Festus Keyamo, the Nigerian Minister of Aviation and Aerospace Development; Dr. Adesola Adeduntan, CEO of First Bank Group; and Senator Ireti Kingibe of the Nigerian National Assembly.
Distributed by APO Group on behalf of Afreximbank.