Dominovas Energy Corp. (fka DNRG)

[Alinea818]

Why the US export-import bank matters to Africa

http://pulse.com.gh/building/ge-reports-why-the-us-export-import-bank-matters-to-africa-id4244244.html

While there is little doubt that Africa’s development is gearing up, the state of infrastructure is in need of significant improvement.

When news broke that the Export-Import (Ex-Im) Bank of the United States had lost its operating charter on June 30, 2015 due to congressional opposition, it was met with grave concern by many U.S. companies doing business in Africa, as many rely on the Ex-Im Bank for trade financing, insurance and loan guarantees.
Since 2009, the Ex-Im Bank has supported more than $6.6 billion in transactions throughout sub-Saharan Africa. It has provided the necessary finance to support infrastructure and construction work, including exports geared at transportation, power and port-related equipment. The removal of this critical source of financing could hurt U.S.-Africa relations, making it challenging for U.S. companies to compete for large-scale infrastructure projects and for small and medium size businesses to export to the region.
While there is little doubt that Africa’s development is gearing up, the state of infrastructure is in need of significant improvement. The lack of the necessary electricity, water, roads and information and communications technology (ICT) infrastructure cuts regional economic growth by two percentage points every year and reduces productivity by as much as 40 per cent.
Yet while governments across the region are committed to improving infrastructure, the World Bank has identified the lack of access to finance as a hurdle to Africa meeting its growth potential. The African Development Bank says as much as $93bn is required annually to meet Africa’s infrastructure needs through 2020, with only half that amount being currently met.
Foreign governments and export agencies all play a key role in supporting these infrastructure deals, with the success of many projects relying on the guarantee of government-backed funding or credit insurance. Unless companies are able to secure finance to support their projects, there is the risk that these will no longer be viable.