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Assessing African trade finance liquidity
01 December 2011
How is the European sovereign debt crisis affecting African trade finance? Dickon Harris reports on Trade Finance’s Third Annual Structured Trade and Export Finance Africa Conference, held this week in Johannesburg.
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African Export-Import Bank
Afrexim
HSBC
Deutsche Bank
A report by the Africa Export- Import Bank (Afrexim) states that Africa is predicted to conduct $852.71 billion worth of trade over the next four years, based on the assumption that the continent can access at least 50% of the required trade finance during that time.
This is a big if. It is no secret that the current European sovereign debt crisis combined with the new regulatory constraints of Basel III is curtailing bank lending. The question is how will the European sovereign debt crisis impact African trade.
Market insiders state that for the time-being banks are continuing to their short-term trade lending. Speaking to Trade Finance at the Third Annual Structured Trade and Export Finance Africa Conference, Gift Simwaka, Afrexim regional manager for Southern Africa explained that Afrexim expects to see a reduction in correspondent banking lines from off-shore lenders to African banks to underwrite trade finance,...
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