Ecobank Nigeria has utilised a US$15mn credit line from the United States Department of Agriculture export credit guarantee (GSM-102) programme.
The programme applies to US exports exclusively, encouraging commercial financing of US agricultural commodities exports to countries where credit is necessary to sustain and increase US sales. The credit line has facilitated sales between US exporters and Nigerian importers.
According to Ecobank’s corporate bank executive director Foluke Aboderin, the facility, which can be upsized, has been used for structured trade finance transactions with Cargill Financial Services International, one of the subsidiaries of the international commodities trading house, Cargill.
Deutsche Bank is involved as confirming and partner bank. Under the programme, Deutsche Bank will advise, confirm and negotiate US dollar-denominated letters of credit, as well as providing post-shipment financing in accordance with the GSM-102 programme regulations.
Ecobank is the first Nigerian bank to be signed in the scheme. “With presence in 36 countries in Africa, Ecobank is well-positioned to provide easy access to international counterparties that have transactions across Africa, the emerging frontier market with significant untapped opportunities and strong demographics,” reads a statement from the bank.
The US overall goods trade deficit with Nigeria was US$5.2bn in 2013, mostly due to oil imports. However, in the same year the trade of agricultural products registered a surplus for the US, with exports to Nigeria totalling US$1.1bn, while imports totalled US$52mn.
The total of US agricultural exports reached a record US$152.5bn in 2014. The GSM-102 financed more than US$2bn in sales of food and agricultural products.