Richard Simon-Lewis, Head of Origination for UK Export Finance, tells us how UK Export Finance is providing on-the-ground support for UK-Africa trade.
Trade with African countries presents incredibly exciting opportunities for companies in the UK looking to expand their businesses overseas.
Across the continent, poverty has declined and economies are growing. These maturing consumer economies are creating the need for rapid infrastructure development. Meanwhile, resource-rich countries are looking for ways to make the most of these national assets in order to deliver sustainable, shared prosperity for their populations.
Given the scale and pace of development, it is no surprise that governments in the region are looking to UK companies for their world-leading goods and expertise. British businesses are recognised for the quality and innovation of their products and services, and have a demonstrable track record across the region’s priority sectors.
We also share a commitment to free trade; in March this year, 44 African nations signed up to an agreement to cut tariffs and liberalise trade. Meanwhile in the UK, the government has clearly set out its commitment to free trade.
Bilateral trade between the UK and Africa totalled £28.7bn in 2016, and the UK government places tremendous importance on strengthening trade and investment links with African partner states.
At the same time, project sponsors are looking to attract investment and diversify sources of funding; finding sustainable, long-term sources of finance will be key to moving from aid to trade.
That’s where UK Export Finance (UKEF) comes in. As the UK’s export credit agency, our role is to provide the finance and insurance to help UK companies fulfil export contracts and support projects around the world. We take pride in our flexible and innovative support – in fact, as the world’s first export credit agency, established in 1919, we have nearly 100 years of innovation behind us to help UK exporters and international projects sponsors do business.
We know that finding the right financial structure is often the key to success for a project. We can offer UK businesses and their overseas buyers a range of flexible solutions for the project; whether project financing, Islamic finance, a loan from the UK government or a guarantee on a bank loan in any of a number of African currencies, from the Botswana pula to the Zambian kwacha. We also have hundreds of millions of pounds worth of capacity to support projects across Africa. Coupled with the excellence of UK goods and services, this attractive finance makes for a compelling UK offer.
We also know that every project is different, and that we need to understand the project and its objectives to make the UK offer as attractive as possible. To make sure we can do this, we have made Ghana one of the first markets in the world to have a dedicated UKEF representative covering the region, providing finance expertise to complement the trade support on offer from the Department for International Trade. Steve Gray is now working on the ground with project sponsors to identify opportunities to collaborate on in priority growth sectors.
Above all, though, we know that more and more, the finance will guide procurement decisions; that’s why we offer to matchmake international projects looking for finance from UKEF with the UK supply chain. We can do this by co-hosting an exporter fair, mapping the UK supply chain to identify the right suppliers and introducing them to the project’s procurement team. This expedites procurement from the UK and helps the sponsors meet the eligibility requirements for UKEF support, at the same time as spreading the benefits of that support among UK exporters. Together with our local currency guarantee capability (allowing African importers to “Buy British, Pay Local”) we believe that UKEF, DIT and the UK supply chain can combine to make a powerful offer on the continent.
Like UK businesses, UKEF is a recognised and valued partner across Africa for the flexibility and innovation we bring to the financing of projects. In the last year, UKEF has supported priority projects ranging from oil and gas in Ghana to airports in Uganda and aircraft in Rwanda. Across Africa, UKEF is supporting projects and helping UK businesses contribute to the region’s ambitions for development and prosperity.
To find out more about how UK Export Finance, search “UKEF” or contact InternationalEnquiries@ukexportfinance.gov.uk