African Expert, Import Bank (Afrexim Bank) has sought collaboration with the public and private investors in the country to promote and finance viable trade and project that would contribute to the diversification of Nigeria’s economy and exports for the economic growth.
Mr. Jean Ekra, president of Afexim Bank, said since Africa’s current share of world exports accounts for about 2 per cent of global trade, there is need to diversify its economies and exports away from the production and export of primary commodities.
Speaking at the 2009 annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN), he said, a larger part of Africa’s poor trade performance has been traced to economic concentration and limited diversification.
“Available data confirm that trade and economic diversification were key to the rapid economic development achieved by the newly industralised countries in East Asia. Afrexim bank, in recognition of the invaluable contribution that economic trade diversification could make towards better trade and economic growth performance of African economies, deems it an honourable duty to contribute toward expansion of direct and indirect infrastructure needed to diversify African economies and export of primary commodities”, he said.
Ekra noted that in many African countries, production of export commodities constitutes the main form of activity and driver of GDP growth adding that the case is particularly strong for those economies dependent on one or two export commodities, such as oil and gas in Nigeria, Libya, Gabon and Equitorial Guinea, Cotton in Mali, and tea and coffee Kenya and Uganda.
Analysing transformation of an underdeveloped economy, he said, price movements of internationally traded goods, and the consequent variations in volume and product composition of trade, adding that these gains are traditionally measured by the terms of trade and the purchasing power of its exports which is defined as the export deflated by imports.
According to him, the issue of economic and trade diversification in Africa always climb on the top of the economic policy agenda whenever African economies are impacted by exported commodity price volatilities and their knocked-on effect on Africa’s economic trade performances.
He explained that Afrexim bank has been providing its Special Risk Programme as a comfort to non-African international banks and investors engaged in the business of financing trade and projects investments in Africa, especially those with the potential to contribute to economic trade diversification in the continent.
Under this programme, the bank, working as a facilitator and partner, shares and risks associated with African Project deals with African and non-African export credit agencies, and insurance companies that provide financial services to entities active in the business of exporting essential capital goods and services to Africa. Specifically under this programme, the bank guarantees international banks and non-African investors promoting projects in Africa, as well as those with credit exposures to African counterparts against certain country risk events,” he said.