Lagos (Nigeria), 10 November 2016 – The urgent need for Africa to focus on the economic returns of knowledge and the role of trade in the development process were highlighted yesterday as the book, Foundations of Structured Trade Finance, written by Dr. Benedict Oramah, was launched in Lagos, Nigeria.
Dr. Oramah, also President of the African Export-Import Bank (Afreximbank), told guests that it was the lack of appreciation of the power of knowledge that led to Africa being left behind in the race for development.
“While South East Asian economies realized back in the 1970s that it was a knowledge economy that could be trade–led and that it was a trade-led economy that could innovate and be competitive, African economies lost focus, consumed by commodity illusion and defensive import substitution strategies,” he lamented.
Consequently, Africa, which was well ahead of developing Asia, including China, in the 1960s and early 1970s in terms of per capita income, size of exports, share of global trade and economic growth rates, was swiftly overtaken by Asia in the 1980s, he pointed out.
It was to address that challenge that he had written the book, to share knowledge about the innovative approach that made it possible to lend into areas previously considered risky by splitting the risks in trade transactions and allocating them to parties best able to bear them.
“Through self-liquidating financing arrangements,” Dr. Oramah explained, structured trade finance “converted country risk, a key concern to lending into crisis hit countries, into performance risk and transferred payment risks away from those jurisdictions, enabling international banks to gradually return to such lendings with limited risk of cumulative exposures.”
On inception, Afreximbank had adopted that concept, enabling it to make important contributions to its evolution, including stretching its application from raw commodities to value-added exports and commoditised revenue flows, he said.
Given that the field had evolved from practice and no textbooks existed and that it does not feature on the curriculum of universities offering finance, economics or business, except for special courses in some universities in Europe, the book would fill that knowledge gap.
Also speaking, Dr. Okechukwu Enelamah, Minister of Industry, Trade and Investments of Nigeria, said that despite the economic setbacks that had been suffered by the continent, Africa could be the engine of global growth in the coming years.
Dr. Enelamah, who was represented by Femi Edun, his Special Adviser on Trade and Finance, said that Africans needed to trade more with each other in order to spur growth, with that commitment going beyond sound bites to concrete actions.
He announced that the Nigerian government had begun a refocusing process that would enhance trade diversification and exports through a series of actions including raising knowledge about regulations and export markets, improving quality standards and introducing a single window for exporters.
The launch featured a presentation of the author profile by Christopher Edordu, the pioneer President of Afreximbank, and a statement by Jean-Louis Ekra, the immediate past President of the Bank.
Prof. Adebiyi Daramola, Chairman of the Committee of Vice Chancellors of Nigerian Universities; Prof. Patrick Utomi of the Lagos Business School; Aliko Dangote, President of the Dangote Industries Limited; Donald Duke, former Governor of Cross River State of Nigeria; and Bashir Wali, acting Managing Director of the Nigerian Export-Import Bank, participated in a panel discussion on “Finance, Trade and Economics: The knowledge of power and the Power of Knowledge”.
Guests at the launch were invited to purchase copies of the book for donation to university libraries to make them accessible to students.
Attending the launch were chief executives of most major financial institutions in Nigeria and beyond as well a large cross section of the country’s top business leaders.
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Media Contact: Obi Emekekwue (oemekekwue@afreximbank.com; Tel. +202-2456-4238)
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About Afreximbank:
The African Export-Import Bank (Afreximbank) is the foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organization, and the Charter, which governs its corporate structure and operations. Since 1994, it has approved more than $41 billion in credit facilities for African businesses, including about $6.2 billion in 2015. Afreximbank had total assets of $9.4 billion as at 30 April 2016 and is rated BBB- (Fitch) and Baa2 (Moody’s). The Bank is headquartered in Cairo. For more information, visit: www.afreximbank.com