U.S. DEPARTMENT OF AGRICULTURE (USDA)
FOREIGN AGRICULTURAL SERVICE
(FAS)
GSM-102 EXPORT CREDIT GUARANTEE
PROGRAM
Doing Business in Africa – Global Trade Forum
November 18, 2013
Michele Kennedy-Kouadio
Office of Trade Programs
Credit Programs
TRADE PROGRAMS
FOREIGN AGRICULTURAL SERVICE (FAS)
http://www.fas.usda.gov

Lead international agency in the United States Department of Agriculture
(USDA)—

Represents a network of USDA agencies and private companies through its
partnership with U.S. Cooperator Groups
FAS OVERSEAS ATTACHES,COUNSELORS, AND TRADE OFFICES
http://www.fas.usda.gov/ofso/overseas_post_directory/ovs_directory_search.asp

Point of contact for overseas banks, importers, and governments in overseas
markets desiring information about GSM-102 or other programs that help with
importation of U.S. agricultural products into their countries
TRADE ASSOCIATE REPRESENTATIVES
http://www.fas.usda.gov/pcd/PartnersSearch.aspx

By products such as U.S. Wheat

Or regional such as SUSTA
U.S. GOVERNMENT AGENCIES THAT PARTNER UNDER THE NATIONAL
EXPORT INITIATIVE (NEI)

U.S. Export Import Bank, Overseas Private Investment Corporation, U.S.
Small Business Administration/Office of International Trade, U.S. Department
of Commerce, U.S. Department of Agriculture, U.S. Agency for International
Development’s Development Credit Authority
GSM-102 CREDIT GUARANTEE PROGRAM
 Facilitates export financing of U.S. agricultural products by guaranteeing
repayment to U.S. banks (or exporters) that extend credit terms to USDA
approved banks in the Africa Middle East (AME) region.
http://www.fas.usda.gov/excredits/foreignbanks.html
 Buyers of U.S. agricultural products in the AME region seek financing
opportunities under GSM-102 when banks in the AME region are reluctant
to lend
 Importers can seek terms through USDA approved banks in the AME
region, even when the shipment destination country is not the same as the
location of the bank opening the L/C. Not all countries in the AME region
are eligible to have banks approved.
http://www.fas.usda.gov/excredits/countryrisk.html
BANKS: CREDIT TERMS UNDER GSM-102
 USDA approved banks in the AME must open an L/C in favor of the exporter of the
U.S. agricultural product
 The U.S. bank may or may not confirm the L/C as confirmation is not required under
the program
 U.S. bank will negotiate credit terms with the foreign bank in the AME region according
to parameters of the GSM-102 program
 Tenor extended to the USDA approved bank in Africa will be limited according to the
risk grade of the country where the bank resides
http://www.fas.usda.gov/excredits/countryrisk.html
The cost of the program is the fee paid by the exporter to USDA
http://www.fas.usda.gov/excredits/gsm102fees.html
SUCCESS: ALL GSM-102 PARTICIPANTS BENEFIT
 May help importer obtain attractive loan
terms with the USDA approved foreign
bank
 USDA approved foreign bank receives a
dollar trade credit on attractive terms from
the GSM-102 guarantee holder (U.S. bank
typically)
 Reduces risk to the U.S. bank (or exporter)
 Helps exporter of U.S. agricultural
products enter new growth markets in the
AME region
IMPORTERS: STEPS TO PARTICIPATE
 Learn about the details of participating in  The U.S. exporter must pay the GSM-102
GSM-102 through the USDA
fee before shipment of your goods and
representative that covers your country
before a GSM-102 guarantee is issued
 Find an exporter of the U.S. desired
agricultural commodity
 Enter into a firm sales contract with the
exporter
Note:
 Negotiate loan terms under GSM-102
As GSM-102 does not cover the
with a USDA approved bank who is willing
risk of the AME bank opening the L/C,
to open an L/C
the bank is likely to review the
 Ask the exporter to register the export
importer’s company financials and cash
sale contract under the GSM-102 program
flow to cover any risk the bank may
 The exporter will provide a copy of the
sales contract to USDA if required
assume—
FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEE
Based On Tenor (Between Banks), Risk Grade Of Country Where Bank Is Located, Amount
Of Sales Contract Covered Under GSM-102, and Repayment Intervals
GSM-102 (Premium per $100 USD of GSM-102 coverage)
Semi-Annual Payment of Principal
Tenor
0
1
2
Risk Category
3
4
5
6
90 Days
$0.182
$0.186
$0.196
$0.257
$0.343
$0.463
$0.614
4 Months
$0.211
$0.215
$0.227
$0.296
$0.398
$0.535
$0.716
6 Months
$0.236
$0.241
$0.254
$0.332
$0.445
$0.599
$0.796
9 Months
$0.323
$0.330
$0.347
$0.453
$0.608
$0.819
$1.088
12 Months
$0.350
$0.357
$0.376
$0.491
$0.659
$0.887
$1.178
15 Months
$0.492
$0.503
$0.529
$0.691
$0.928
$1.248
$1.658
18 Months
$0.561
$0.574
$0.604
$0.789
$1.058
$1.424
$1.892
24 Months
$0.686
$0.700
$0.737
$0.963
$1.293
$1.738
$2.310
FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEE
Based On Tenor (Between Banks), Risk Grade Of Country Where Bank Is Located, Amount
Of Sales Contract Covered Under GSM-102, and Repayment Intervals
GSM-102 (Premium per $100 USD of GSM-102 coverage)
Annual Payment of Principal
Tenor
0
1
2
Risk Category
3
4
5
6
9 Months
$0.435
$0.445
$0.468
$0.611
$0.821
$1.104
$1.468
12 Months
$0.464
$0.474
$0.499
$0.652
$0.875
$1.177
$1.564
15 Months
$0.602
$0.616
$0.648
$0.846
$1.136
$1.528
$2.030
18 Months
$0.667
$0.682
$0.717
$0.937
$1.258
$1.692
$2.248
24 Months
$0.851
$0.869
$0.915
$1.195
$1.604
$2.157
$2.866
AME BANK PARTICIPATION
 Read about details of the GSM-102
program
http://www.fas.usda.gov/excredits/reg.asp
 Contact Credit Program Division
Representative for Details Michele.Kouadio@fas.usda.gov
 Discuss possible terms that could be
negotiated with your U.S. correspondent
banks under GSM-102
 Look at the guidelines to apply for review
and approval under the GSM-102
http://www.fas.usda.gov/excredits/foreignbank
req.html
 Your bank must have a location in an
AME bank eligible country
 Importer of U.S. goods will seek loan
terms from the AME bank
 As the terms extended under GSM-102
to the AME bank occur because the
importer is buying U.S. agricultural
products
 The AME bank benefitting from the trade
credit, will likely be encouraged to
extend loan terms to the importer
 Your bank may receive up to two years
(varies by location of the bank in
country) in repayment terms to the U.S.
bank
 The loan you extend to the importer is
not guaranteed under GSM-102, and
USDA is not involved in the terms
between the foreign bank and the
importer
FY 2011 – 2012 (in USD millions)
$ USD Millions
GSM-102
GLOBAL USAGE
+Eurasia Region discontinued in 2012
AME REGION
10/1
thru
9/30
Shipping
Location
Announced
($mil)
Registered
($mil)
Bank Used
in the AME
Agricultural
Products
2011
Egypt,
Morocco,
Saudi
Arabia,
Nigeria,
Guinea
Bissau,
Iraq,
Ghana
$350
$239
Africa Export
Import Bank
(Multilateral
Egypt) ,
Mashreqbank
(UAE),
Investec
(South Africa),
Soybean Meal
Soybean Oil
Wheat
Yellow Corn
2012
Angola,
Egypt,
Ghana,
Morocco,
Saudi
Arabia,
Tunisia
$400
$246 *
Afrexim
Mashreqbank
Investec
Mauritius
Commercial
Bank
Poultry,
Soybeans, Rice,
Soybean Oil,
Wheat, Yellow
Corn, Soybean
Meal
Angola,
Egypt,
Ghana,
Libya,
Nigeria,
Tunisia
$475
Mauritius
Commercial
Bank, Africa
Export Import
Bank,
Investec,
Mashreqbank
Poultry,
Soybeans,
Soybean Meal,
Wheat, Soybean
Oil, Rice, Yellow
Corn
2013
* reflects
cancellations
$173
U.S. MARKETS –
Leading Regional Markets:
• Sub Saharan Africa ranks 12th
• North Africa ranks 14th
BICO Report through June 2013
SubSaharan Africa (BICO – June 2013)
Top U.S. Markets – Not in Rank order
Ghana
Ethiopia
South Africa
Angola
Kenya
Liberia
Cameroon
Gabon
Nigeria
SubSaharan African Top U.S. Markets
by Commodity Category
(Tons) BICO Report Oct-Dec 2012
Country
Consumer
Oriented
Intermediate
Bulk
Nigeria
12,347
5,505
193,475
Ethiopia
1,017
149
50,470
Angola
65,938
1,902
2,522
Ghana
53,087
4,497
41,085
Kenya
3,363
13,350
23,885
Cameroon
440
2,238
23,786
Gabon
18,948
202
130
South
Africa
12,931
10,545
21,549
Congo
Brazzaville
13,945
52.9
0
Congo
Kinshasa
11,624
21.2
2.8
PRODUCTS COVERED
Must be U.S. origin
• Bulk commodities (wheat, feed
grains, soybeans, rice)
• Intermediate products (oilseed
meals, flour, hides, genetics, seeds,
saplings)
• Consumer-oriented products
(meat, fruits, vegetables, grocery
products)
• Fiber: cotton and wool, including
fabric and yarns
• Forest Products:
Wood and wood products
http://www.fas.usda.gov/excredits/gsmcommodities.html
ELIGIBLE COUNTRIES
AFRICA AND MIDDLE EAST REGION
Participating Countries Can Receive Shipments; and *Some are also
Eligible to Have Banks Approved:
Afghanistan, Algeria*, Angola*, Bahrain*, Benin, Botswana*, Burkina Faso*,
Burundi, Cameroon*, Cape Verde*, Central African Republic, Chad, Comoros,
Cote d’Ivoire, Democratic Republic of the Congo, Djibouti, Egypt*, Equatorial
Guinea, Eritrea, Ethiopia, Gabon*, Gambia, Ghana*, Guinea, Guinea-Bissau,
Iraq, Israel*, Jordan*, Kenya*, Kuwait*, Lebanon*, Lesotho*, Liberia, Libya,
Madagascar, Malawi*, Mali, Mauritania, Mauritius*, Morocco*, Mozambique*,
Namibia*, Niger, Nigeria*, Oman *, Pakistan, Qatar*, Republic of the Congo,
Republic of South Sudan, Rwanda, Saudi Arabia*, Senegal*, Seychelles, Sierra
Leone, South Africa*, Swaziland*, Tanzania*, Togo, Tunisia*, Uganda*, United
Arab Emirates*, West Bank/Gaza, Yemen, Zambia* and Zimbabwe.
* USDA has determined that the following countries in this region are
eligible to have banks approved (as of August 7, 2013):
ELIGIBLE BANKS
•
•
•
•
•
•
•
•
•
•
•
•
Eastern and Southern African Trade and Development Bank (PTA Bank),
Burundi/Kenya (Multilateral)
African Export-Import Bank (Afrexim), Egypt (Multilateral)
Byblos Bank S.A.L., Lebanon
The Mauritius Commercial Bank Ltd., Mauritius
Attijariwafa Bank, Morocco
BMCE Bank, Morocco
Investec Bank Limited, South Africa
Nedbank Limited, South Africa
Abu Dhabi Commercial Bank PJSC, United Arab Emirates
Credit Europe Bank (Dubai) Ltd., United Arab Emirates
Mashreqbank PSC, United Arab Emirates
National Bank of Ras Al-Khaimah PSC (Rakbank), United Arab Emirates
Check Website Routinely for Additions/Deletions
Banks interested in becoming approved by CCC should visit the link below for
more information.
http://www.fas.usda.gov/excredits/foreignbanks.html
USDA REPRESENTATIVES IN AFRICA
ETHIOPIA – American Embassy, Addis Ababa
Quintin Gray, Counselor
agaddisababa@fas.usda.gov
Covers African Union, Djibouti, Eritrea, Somalia,
South Sudan, Yemen
SENEG AL – American Embassy, Dakar
Joani Dong, Attache
agdakar@fas.usda.gov
Covers: Burkina Faso, Cote d’Ivoire, Mali,
Niger, The Gambia
KENYA – American Embassy, Nairobi
Kate Snipes, Counselor
agnairobi@usda.gov
Covers Burundi, Malawi, Rwanda, Tanzania,
Uganda, Zambia
SOUTH AFRICA – 877 Pretorius Street,
Pretoria
Eric Wenberg, Minister Counselor
Corey Pickelsimer, Senior Attache
Nicolas Rubio, Attache
agpretoria@fas.usda.gov
Covers: Angola, Botswana, Lesotho,
Madagascar, Mauritius, Mozambique,
Namibia, Swaziland, Zimbabwe
NIGERIA – U.S. Consulate General, Lagos
Russell Nicely, Counselor
aglagos@fas.usda.gov
Covers Benin, Cameroon, Ghana, Liberia
OFFICE OF TRADE PROGRAMS
CREDIT PROGRAMS DIVISION
GSM-102 Export Credit Guarantee Program
Africa and the Middle East
Business Development and Planning
Michele.Kouadio@fas.usda.gov