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According to the World Trade Organization (WTO), not all developing countries
participate equally in international trade, with Africa having the smallest slice of
world exports. The WTOs World Trade Report 2014 says the potential of trade in
supporting development has not yet been fully realized. The emerging trends
suggest, however, that trade will be a major force for development in the future.
Despite the positive outlook, the WTO report says 2014 was the third straight
year of below average trade growth and that this will not change in 2015.
This is clearly reflected in the Economic and Operations Annual Report by the
Bank of Tanzania for the year ended 30/June/2014 that, the percentage share of
banks credit to trade has been dropping at roundabout 6.5 % annually over the
last three years.
A better understanding of risk finance is needed. There needs to be a better
understanding of how the trade between these markets will grow by taking on
more risk in an appropriate manner. This is also where you need the local market
participants to give their input and advice, says Mr. Kapufi.
There needs to be more understanding of risk, not just counterparty credit,
country, currency risk, but also compliance risk, which is on the rise in Africa (and
other emerging markets) and there is a growing concern of de-risking by certain
players, who would rather step back than face the higher risks.
While global initiatives in the space of managing compliance risk will benefit
businesses in Africa, more hard data on the problem is needed so proper
advocacy actions can be taken. This is where collaboration at a forum like the
ICC can help get a better handle on the problem and come up with solutions that
are relevant and appropriate for emerging markets (such as markets in Africa).
This needs to be augmented by increased awareness and support from
corporates.
Stanbic Bank has created a corporate trade finance programme that facilitates
domestic and international trade by guaranteeing payment for goods shipments.
With an extensive presence in the market and in key financial centres, Stanbic
Bank offers competitive funding costs and experienced teams to help businesses
succeed. The banks footprint across 20 countries in Africa enables it to provide
comprehensive trade finance solutions.
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