Uncertainty threatens US-Africa trade

US political leaders are lobbying to reauthorise the charter for the Export-Import Bank of the United States (Ex-Im) – which expired on July 1 – amid concerns that the country’s efforts to deepen trade ties with Africa could be seriously impacted The Ex-Im charter helps finance the foreign purchases of US goods for private businesses and supports major US companies such as Boeing, Caterpillar and General Electric. It was opposed by conservative lawmakers who labelled it as “corporate welfare”. Senior international adviser: Africa for US corporate law firm Covington & Burling LLP, Witney Schneidman, wrote on the company’s CovAfrica blog: “If the US Export-Import Bank is not reauthorised, US efforts to deepen commercial ties to Africa would be significantly impeded. Not only would this put US companies at a commercial disadvantage to companies from the European Union, China, Russia, India and elsewhere, it would impact negatively on the contribution that many American companies make to economic development on the continent through job creation, technology transfers and skills development.” He added that while the extension of the African Growth and Opportunity Act (Agoa) for ten years had “ushered in a new era of stability and predictability in US-African commercial relations”, the loss of Ex-Im could mean that Agoa’s impact would not be fully realised.” Brookings Institute researcher, Zenia Lewis, said that when it came to Africa, the Ex-Im Bank’s efforts on the continent were everexpanding. According to her, in 2013 the bank financed a record 188 transactions in Africa with authorisations totalling over US$600m and supporting exports in 35 of 49 sub- Saharan African countries. In the first seven months of 2014, the bank authorised US$1.1 billion for sub- Saharan Africa, amounting to over $5 billion over the past five years. “The Ex-Im Bank is working across a range of sectors on the continent, with many large-scale transactions supporting necessary infrastructure and construction work, including exports geared at transportation, power and port-related equipment,” said Lewis. This included US$108m for locomotive kits for Transnet last year According to a statement by Ex-Im chairman, Fred Hochberg, the bank’s staff was currently working on an “orderly liquidation plan and completing transactions that had already been approved”, but the lapse of its charter meant it could not work on any new deals. INSERT $5bn The amount authorised by Ex-Im over the past five years.