By Odunewu Segun
United Bank for Africa (UBA) has signed a $100 million trade financing memorandum of understanding with the Export-Import Bank of the United States (EXIM Bank) on the sidelines of the ongoing World Economic Forum in Kigall, Rwanda.
The Chairman and President of the EXIM Bank, Fred P. Hochberg, and the outgoing Group Managing Director/Chief Executive Officer of UBA, Philips Oduoza, signed the MOU, with the goal of expanding trade between the US and sub-Saharan Africa.
Both of them were joined by the Deputy Managing Director and Group Managing Director Designate, UBA, Mr. Uzoka Kennedy, as well as the Group Head, Financial Institutions and International Organisations, UBA, Sola Yomi-Ajayi, at the signing ceremony.
Speaking on the agreement, Oduoza said: “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.
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“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,” Hochberg disclosed.
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 programs 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.