BY FIDELITY MHLANGA
THE African Export-Import Bank (Afreximbank) last week delivered a training programme for Zimbabwean banks to help enhance their technical skills in trade finance.
Trade finance plays a key role in economies and according to the World Trade Organisation; some 80-90% of world trade relies on it.
Local bankers received capacity training in topics that include documentary letters of credit, bills for collection, bank guarantees, relevant International Chamber of Commerce rules, compliance issues related to trade finance and risks in international business and ways of mitigating them.
The documentary trade finance training attracted 44 participants from 15 commercial banks, one non-bank financial institution and the Reserve Bank of Zimbabwe.
The central bank has been issuing letters of credit for the importation of key essentials such as fuel and grain.
“Based on the discussions and feedback received, the banks agreed to work towards designing model letter of credit verbiage to cover key commodity imports. The model letter, which is expected to be endorsed by the Reserve Bank of Zimbabwe, would be adopted, going forward, by all the banks. The training programme was organised in line with Afreximbank’s Trade Finance leadership pillar under which it seeks to play a leading role in matters relating to the development of trade finance in Africa,” said Humphrey Nwugo, the bank’s regional chief operating officer for southern Africa.
“According to the World Trade Organisation, some 80-90% of world trade relies on trade finance. That is the opportunity we, as trade financiers, are sitting on, with anecdotal evidence pointing to a trade finance gap in Africa in excess of US$100 billion.”
Afreximbank senior manager on Trade services Okechukwu Ihejirika said the training was aimed at helping participants become better professionals in trade finance matters while ensuring alignment with global best practice in terms of trade finance instruments originating from Zimbabwe.
The programme consisted of two three-day sessions focused on the operational aspects of trade finance.
Case studies of real-life scenarios were reviewed and participants were taken through a practical review session on common errors that had been noticed in trade finance instruments issued by Zimbabwean banks in order to help them learn from the errors.
The programme covered topics up to the intermediate level, with Afreximbank announcing plans to deliver an advanced level course to the group in the future and to hold sessions in other countries.
It is also part of the Afreximbank Academy through which the bank is promoting knowledge in Africa.
The bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Since 1994, it has approved more than US$67 billion in credit facilities for African businesses, including $7,2 billion in 2018. Afreximbank had total assets of US$13,4 billion as at December 31, 2018.