INTERNATIONAL TRADE FINANCE
SEMINAR
PRESENTED BY
INNOCENT ABIAKA
AMI CONSULTANTS, INC.
February, 17, 2010
[Map Source: Africa Guide]
] Consultants
AMI
Phoenix, Arizona USA
Phone: [602] 279-7278
Email: amiconsultants@msn.com
Website: www.ami-consulting.com
U.S. EXPORTS, IMPORTS, AND TRADE
BALANCE WITH AFRICA
T-1
U.S. EXPORTS, IMPORTS, AND TRADE BALANCE WITH AFRICA
($Millions)
YEAR
EXPORTS
IMPORTS
2009
24,285.00
62,402.70
2008
28,392.70
113,495.60
2007
23,425.80
92,013.10
2006
18,582.80
80,417.90
2005
15,309.50
65,211.80
2004
13,202.10
45,636.40
2003
10,612.60
32,021.30
2002
10,663.10
22,100.20
2001
12,119.30
25,431.30
2000
10,965.90
27,640.90
1999
9,880.10
16,990.10
1998
11,166.80
15,824.60
1997
11,389.10
19,924.30
TRADE
BALANCE
-38,117.70
-85,102.90
-68,587.20
-61,835.10
-49,902.20
-32,434.30
-21,408.70
-11,437.20
-13,312.00
-16,675.00
-7,110.00
-4,657.80
-8,535.20
Source: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch,
Washinton, D.C 20233
LEADING U.S. EXPORTS TO SUBSAHARAN AFRICA
ITEM
2008 VALUE ($millions)
• Motor Vehicles
2,204.4
• Oilseeds & Grains
1,617.4
• Petroleum & Coal Products
1,403.8
• Aircraft, Engines & Parts
1,358.7
• Oil & Gas Machinery
1,344.2
• Construction Machinery
1,142.4
• General Purpose Machinery
596.4
• Industrial Chemicals
447.0
• Navigational, Measuring, Control Instruments
427.7
• Grain & Oilseed Milling Products
426.6
• Communications Equipment
394.1
Source: U.S. International Trade Commission DataWeb
LEADING U.S. IMPORTS FROM SUBSAHARAN AFRICA
ITEM
2008 VALUE ($ Millions)
• Oil (Crude & non-crude)
71,208.2
• Platinum
2,966.9
• Motor Vehicles & Parts
1,932.7
• Diamonds
1,572.7
• Iron & Steel
1,235.9
• Woven &Knit Apparel
1,151.5
• Ores, Slag, & Ash
896.8
• Cocoa
695.0
• Organic Chemicals
627.5
• Petroleum & Other Gases
513.4
Source: U.S. Department of Commerce, Bureau of Census
LEADING SUB-SAHARAN TRADING
PARTNERS
EXPORTS
SUB-SAHARAN AFRICA'S PRINCIPAL TRADING PARTNERS
($Billions and Market Share)
UNITED STATES
CHINA
UNITED KINGDOM
JAPAN
SPAIN
FRANCE
GERMANY
NETHERLANDS
ITALY
SOUTH AFRICA
TOTAL EU
2006 % Share
61.5 29.5%
26.3 12.6
13.0
6.2
12.5
6.0
10.9
5.2
9.2
4.4
8.9
4.3
6.8
3.2
7.4
3.6
3.3
1.6
67.0 32.1
2007 % Share
69.6
28.4%
32.9
13.4
13.7
5.6
13.3
5.4
12
4.9
10.5
4.3
9.4
3.8
9.1
3.7
9.1
3.7
5.3
2.2
76.9
31.4
LEADING SUB-SAHARAN TRADING
PARTNERS
IMPORTS
SUB-SAHARAN AFRICA'S PRINCIPAL TRADING PARTNERS
($Billions and Market Share)
2006 % Share 2007 % Share
CHINA
$19.0 8.9% 26.5
9.8%
GERMANY
13.0 6.1%
15
5.6
UNITED STATES
12.1 5.6% 14.4
5.3
FRANCE
11.3 5.3% 13.1
4.9
UNITED KINGDOM
8.9 4.1%
9.8
3.6
SOUTH AFRICA
7.3 3.4%
9
3.3
JAPAN
7.2 3.3%
8.6
3.2
NETHERLANDS
6.0 2.8%
8.6
3.2
ITALY
5.5 2.6%
6.3
2.4
SPAIN
2.8 1.3%
3.1
1.2
TOTAL EU
62.0 28.9% 74.9
27.8
IMPORTS FROM SUB-SAHARAN
AFRICA
Source: USITC
Major U.S. Imports from Sub-Saharan Africa with share of at least 50%
($ millions)
TOTAL
PERCENT
DESCRIPTION
SSA
WORLD OF TOTAL
Platinum, unwrought
or in powder form
1,284.34 2,518.84
51.0%
Rhodium, unwroght
or in powder form
1,272.77 2,458.47
51.8%
Nonindustrial
diamonds, unworked
or simply sawn,
cleaved or bruted
672.21
751.55
89.4%
Cocoa beans, whole
broken, raw or roasted
589.31
878.34
67.1%
Ferromanganese
containing by weight
more than 4% of
carbon
369.18
687.33
53.7%
IMPORTS FROM SUB-SAHARAN
AFRICA
Source: USITC
Major U.S. Imports from Sub-Saharan Africa with share of at least 50%
($ millions)
TOTAL
PERCENT
DESCRIPTION
SSA
WORLD OF TOTAL
Slag, contains over
40 percent titanium
140.81
186.5
75.5%
Natural rubber latex,
whether or not
prevulcanized
138.77
183.83
75.5%
Manganese ores and
concentrates
109.22
154.45
70.7%
Chromiun ores and
concentrates
44.76
44.76
100.0%
Cobalt ores and
concentrates
21.75
23.44
92.8%
EXPORT FINANCING AND GUARANTEE
PROGRAMS
A. EXPORT-IMPORT BANK
– Ex-Im Bank helps sub-African manufacturers
expand their businesses by financing U.S. exports
of manufacturing equipment and services
– Export credit insurance supports the export of
U.S. goods and services, including raw materials,
semi-manufactured and finished goods
– Short-term insurance policies provide repayment
terms of up to 100% of the U.S. contract value
EXPORT FINANCING AND GUARANTEE
PROGRAMS
-
-
Medium-term insurance policies provide
repayment terms of up to seven years and
cover up to 85% of the U.S. contract value
Ex-Im Bank guarantees the repayment of
medium-and long-term loans extended by
commercial lenders to African buyers to
finance the purchase of U.S. goods and
services
EXPORT FINANCING AND GUARANTEE
PROGRAMS
-
-
Working Capital Guarantee provides a 90
percent guarantee to U.S. commercial
bank lenders and can cover multiple
export sales or individual contracts
Ex-Im Bank would consider project
financing in most African countries in
industries such as private power, telecoms,
and other infrastructural sectors
EXPORT FINANCING AND GUARANTEE
PROGRAMS
-
Ex-Im Bank has special programs that
provide enhanced support for medical
equipment exports, environmentally
beneficial exports, and exports related to
international transportation security
[Benefits include extended repayment
terms and coverage of local costs for up to
15% of the U.S. contract value]
EXPORT FINANCING AND GUARANTEE
PROGRAMS
- The Rand and the CFA have been added to
the list of major pre-approved currencies for
inclusion in Ex-Im Bank’s Foreign Currency
Guarantee Program. West and Southern Africa
companies can arrange Rand and CFA
denominated loans guaranteed by Ex-Im Bank.
Ex-Im Bank Product Availability
Country
S-Term
Angola
Pu & Pr
Benin
Pu & Pr
Botswana
Pu & Pr
Burkina Faso
Pu & Pr
Cameroon
Pu & Pr
Cape Verde Is.
Pu & Pr
Cote d’Ivoire
Private
Pu = Public Pr = Private
M-Term
L-Term
[Sector(s) Open]_____
Pu & Pr
Pu & Pr
Pu & Pr
Pu & Pr
Private
Private
Pu & Pr
Private
Pu & Pr
Pu & Pr
Private
Ex-Im Bank Product Availability
Country
S-Term
M-Term
L-Term
[Sector(s) Open]_____
Gabon
Pu & Pr
Pu & Pr
Pu & Pr
Gambia
Pu & Pr
Private
Ghana
Pu & Pr
Pu & Pr
Pu & Pr
Kenya
Pu & Pr
Pu & Pr
Pu & Pr
Liberia
Pu & Pr
Mali
Pu & Pr
Private
Mauritius
Pu & Pr
Pu & Pr
Pu & Pr
Pu = Public Pr = Private
Ex-Im Bank Product Availability
Country
S-Term
Mozambique
Pu & Pr
Namibia
Pu & Pr
Nigeria
Pu & Pr
Senegal
Pu & Pr
South Africa
Pu & Pr
Swaziland
Pu & Pr
Uganda
Pu & Pr
Pu = Public Pr = Private
M-Term
L-Term
[Sector(s) Open]_____
Pu & Pr
Pu & Pr
Pu & Pr
Pu & Pr
Pu & Pr
Pu & Pr
Pu & Pr
Private
Pu & Pr
Pu&Pr
Pu & Pr
Pu & Pr
Pu & Pr
Pu & Pr
Ex-Im Bank Product Availability
DEFINITIONS:
Short-term: Consumables, raw materials, small
capital goods – up to 360 days
Medium-term: Capital goods, and/or services –
repayment terms up to 7 years
(maximum 2 years disbursement plus
5 years repayment)
Ex-Im Bank Product Availability
DEFINITIONS:
Long-term: Capital goods and/or services –
repayment terms over 5 years
Public Sector: Entities at least 50% owned by the
government
Private sector: Privately-owned companies,
financial institutions, and entities less than
50% owned by the government
RECENT EX-IM BANK AFRICAN
AUTHORIZATIONS:
• Ex-Im authorized a Multi-Buyer Working Capital Loan
Guarantee for Kazar International of San Francisco for
$877,500. This authorization allows Kazar International
to facilitate its machinery and equipment export
operations to many countries, including Senegal and
Mauritania.
• Jacaranda Plant and Machinery Hire Company of
Zambia imported an STX 480 horsepower tractor
supplied by CNH America LLC of Racine, Wisconsin. ExIm Bank guaranteed the $285,332 transaction through
its Medium-Term Loan Guarantee product.
RECENT EX-IM BANK AFRICAN
AUTHORIZATIONS:
• The Pioneer Equipment Company of
Jacksonville, Florida exported $3,030,762
worth of new and refurbished rock crushing
equipment to Japaul Oil & Maritime Services,
PLC in Nigeria. Assured through Ex-Im Bank’s
Medium-Term Loan Guarantee policy,
Sovereign Bank lent the money to Japaul Oil &
Maritime Services’ bank, Intercontinental
Bank PLC of Nigeria, the guarantor.
RECENT EX-IM BANK AFRICAN
AUTHORIZATIONS:
• Ex-Im Bank guaranteed a medium-term loan
for $321,499 to purchase communication
broadcasting equipment. Electronics
Research, Inc of Chandler, Indiana and BSW of
Washington, DC exported the equipment to
Megalectrics, LTD of Nigeria. M&T Bank lent
the money to Megalectrics with Diamond
Bank, PLC of Nigeria as the guarantor.
RECENT EX-IM BANK AFRICAN
AUTHORIZATIONS:
• Ex-Im Bank guaranteed a long-term loan
that involved over sixteen suppliers. The
$19,634,327 transaction allowed the
suppliers to export an aluminum can
manufacturing facility to GZ Industries of
Nigeria. Fidelity Bank, Nigeria, provided
a local bank guarantee to HSBC’s loan.
Source: EX-IM Bank In Africa Update; May 2008
SUCCESS STORIES
• GHANA
Sovereign Bank of Boston, Massachusetts,
used an Ex-Im Bank 3 year, medium-term
guarantee in the amount of $830,334 to
support the sale of used construction
equipment, from Target Shipping Company of
Cranford, New Jersey to Tatop Company Ltd.,
of Ghana, for its civil engineering projects
SUCCESS STORIES
• NIGERIA
Under the new Nigerian Bank Facility, Ex-Im
Bank approved a request from M&T Bank,
Baltimore, Maryland for a 5 year, mediumterm guarantee in the amount of $3,954,132
to support the sale of a thermal oil recovery
system to Specialty Drilling Fluids Ltd. in
Nigeria by Brandt, of Houston, Texas. A local
bank guarantee was be provided by Access
Bank Plc.
SUCCESS STORIES
• NIGERIA
HSBC Bank PLC of Houston, Texas, used Ex-Im
Bank’s guarantee to support a loan of $11.5
million to Drillog Petro Dynamics Ltd. of Rivers
State, Nigeria, for the purchase of Well
Logging Equipment from Halliburton Energy
Services of Houston, Texas. Diamond Bank
Ltd., of Nigeria, provided a local bank
guarantee for this transaction
SUCCESS STORIES
• SOUTH AFRICA
Legacy Medical of South Africa was able to
purchase $50,000 of nonvascular stents from
Alveolus Inc. of Charlotte, North Carolina.
Alveolus used an Ex-Im Bank multi-buyer,
small business insurance policy to support this
sale.
SUCCESS STORIES
• LIBERIA
The United Nations Mission of Liberia
purchased $55,800 of sorbents (pads, brooms,
and rolls) from Applied Fabric Technologies of
Orchard Park, New York. Using an Ex-Im Bank
short-term, single-buyer insurance policy,
Applied Fabric Technologies was able to
provide financing to its customer.
HOW TO APPLY FOR EX-IM BANK
FINANCING
• Ex-Im Bank Application Process:
• Export Credit Insurance (Eligible Applicants: U.S
Exporters and Financial Institutions)
The following are the required steps to obtain an
Export Credit Insurance policy: 1) U.S. exporter and
international buyer negotiate a sales contract;
• 2) International buyer supplies the U.S. exporter with
financial information, as required by Ex-Im Bank’s
credit standards);
• 3) U.S. exporter submits insurance application to Ex-Im
Bank, which includes requisite financial information
received from the buyer.
HOW TO APPLY FOR EX-IM BANK
FINANCING
• The Export-Import Bank encourages the use of
a specialist insurance broker for exporters who
are interested in export credit insurance.
Brokers provide a number of valuable services
to existing and prospective policyholders.
Brokers receive their compensation from
commissions paid by Ex-Im Bank -- there is no
additional charge to the U.S. exporter. To find
a specialty broker in your region, use Ex-Im
Active Brokers List.
HOW TO APPLY FOR EX-IM BANK
FINANCING
• Working Capital Guarantees (Eligible Applicants: U.S.
Exporters)
An exporter may apply through a lender participating
in Ex-Im Bank’s Working Capital guarantee program.
Most lenders that have established a working
relationship with Ex-Im Bank have been granted
discretionary pre-approved credit authority known as
delegated authority. A delegated authority lender may
process your working capital loan under established
criteria without pre-approval from Ex-Im Bank. No
waiting, no red tape! To find a lender that will finance
your export sales, download the Delegated Authority
Lenders list.
HOW TO APPLY FOR EX-IM BANK
FINANCING
• Commercial Loan Guarantees (Eligible Applicants:
Financial Institutions)
There are three simple steps to approaching Ex-Im
Bank: 1) U.S. exporter and international buyer
negotiate a sales contract; 2) International buyer
and/or U.S. exporter identify a financing institution to
provide the loan (commonly a U.S. bank, but foreign
banks willing to lend U.S. dollars can also apply);
3) Lending institution submits final application to
Ex-Im Bank for review and approval
HOW TO APPLY FOR EX-IM BANK
FINANCING
• . See list of African Banks with an Ex-Im Bank
Master Guarantee Agreement (MGA) (pdf).
• Website:
http://www.exim.gov/products/special/africa/
afr_exim-in.cfm
HOW TO APPLY FOR EX-IM BANK
FINANCING
• Letter of Interest (Eligible Applicants: Anyone)
To initiate financing discussions with lending
institutions or to complement financing proposals for
competitive bids, U.S exporters and importers can
obtain an Ex-Im Bank Letter of Interest (LI) to assist in
negotiations for medium- and long-term
transactions. The LI indicates the Bank's willingness
to consider a financing offer if sale is completed. An
LI can be issued within seven days of a request for
financing and remains in effect for six months.
HOW TO APPLY FOR EX-IM BANK
FINANCING
• How do I find a bank that offers in Ex-Im Bank
products?
Ex-Im Bank will provide you with a list of
commercial institutions active under Ex-Im Bank's
guarantee and insurance products. Get the
Lender Referral List (pdf).
• There are a limited number of banks that have
expressed interest or are experienced in working
with Ex-Im Bank in Africa. Download the contact
information for U.S. Lenders Experienced in Africa
(pdf).
COUNTERTRADE
• Operate in non-cash market areas
•
Increased buying power
•
Conservation of cash flow
•
Alternative financing
•
Convert slow moving inventory into current receivables
•
Put surplus production capacity to use
•
Increase market share with low cash investment
•
Access new markets
•
Upgrade manufacturing capabilities
•
Preserve hard currency
•
Develop infrastructure projects
Types of Countertrade:
•
Barter
•
Counter-purchase
•
Compensation
•
(buy-back)
•
Clearings