“We have a new mandate to conquer China all over the world”
The US bank EXIM had slept for four years after the Senate failed to renew its statute in 2012. It was finally put back into operation in 2016.
But in the meantime, as Reed says, “we saw the world change”.
CONTINUE READING USA-Africa: Team Trump accelerates as China emerges
Trade competition between the US and China has become intense, and institutions like EXIM have become a weapon in the battle for competitive advantage.
The Africa Report: Do you offer insurance and guarantees, do you also provide financing?
Kimberly Reed: We provide direct credit to overseas buyers of US goods and services.
Export Import Bank approved the largest direct loan in the bank’s history back in September 2019, a $ 5 billion loan to Mozambique focused on exporting US goods and services to build an LNG facility in To build Mozambique that will help transform the country.
How do you rate the continent in terms of promising markets for the EXIM Bank worldwide and where is Angola on your list of priorities?
Africa and Sub-Saharan Africa are an absolute priority for the Export Import Bank of the United States. In fact, we have a special Congressional mandate to focus on Sub-Saharan Africa, and we have an EXIM Advisory Committee on Sub-Saharan Africa to assist us in this.
CONTINUE READING Bill Gates: “Coronavirus will cost well over $ 3 trillion”
We know that Africa is a very young continent and a huge market; In 2018, the United States exported $ 26 billion worth of goods to Africa.
Since I took office in May 2019, our agency has authorized more than 40 deals in sub-Saharan Africa, small and then large like the one I mentioned in Mozambique.
We are a needs-based organization and want to be that special tool in the toolbox of trade, and in Angola we want to help wherever there is a need and that we are open and competent.
Angola has a privatization program that is slowly being rolled out, which I think would give US companies some opportunity. Have you been approached by US companies who see this coming and say, “Could you help us?”
Before I was confirmed by my fellow board members in May, we were closed to deals over $ 10 million for about four years. And the rest of the world has its own Export Credit Agencies, and today there are 113 Export Credit Agencies around the world.
CONTINUE READING Mike Pompeo’s Africa trip is about China, not Africa
Since we were not approved by the Senate and the bank was not fully functional without us, we saw the world change for 4 years.
And so now we are very busy telling the world and Africa, come back and check out our great US goods and services and use EXIM when the private sector cannot or is unwilling or unwilling and you we need help to finance export.
Obviously, when business leverages itself, it really requires predictability. Do you think a period of 4 years has affected your ability to function the way you would like?
Well, while we were closed, we raised $ 40 billion in applications and there is still a lot of interest and we’re going through all of them now. And as the new boss, my priority is making sure the world knows the United States and comes back to the United States and takes a look at us and uses us when they need us.
CONTINUE READING Coronavirus: Africa needs us now
As mentioned earlier, the Trump administration is taking an entire government approach called Prosper Africa to increase reciprocal trade investment and fuel economic growth.
While we were gone and not at full capacity, countries and buyers made choices, I’m sure it wasn’t EXIM but now we want to be as helpful as possible.
We have the capacity to support $ 135 billion in transactions at all times, and right now we’re at about $ 50 billion so we have the opportunity to grow and support.
And I will say that the Mozambique transaction was before the EXIM bank reopened, they worked with the Russians and the Chinese to get funding and purchase of goods and services from these two countries.
And then, after our US EXIM reopened, the Mozambique LNG project turned to the United States and chose us instead.
Infrastructure companies from France or the UK say that one of the difficulties with competing with companies from Asia, mainly China, for big business on the continent is having a Chinese contractor trying to win a bid take over the funding as well with the ability to build the bridge, the railroad, whatever it is. And that is a very strong package, the ability to say to an African country: “We will not only build it, we will pay for it, and then you will pay us back later.”
How do you coordinate within the Prosper Africa initiative to develop a creative way of mimicking this type of structure so that you can compete with Chinese companies?
It is very important that you ask me this question. We reopened in May 2019 and then several government programs in our country had difficulties getting approval from time to time and EXIM was due to expire or expire at the end of 2019 according to our charter. And Congress came back and approved us for the longest term in EXIM’s 86-year history, thanks to President Trump’s leadership, we are now re-authorized until 2026.
And as part of that re-approval that gives overseas and financial services sectors certainty about the United States when it comes to the EXIM programs, but on top of that, Congress has given us a new mandate, and that new mandate is a program called China and transforming exports.
And this program tells us to focus 20% of our portfolio on bringing China straight to the world and find those opportunities in countries in Africa where we can provide competitive funding to neutralize China’s conditions and become the global market leader USA compared to promote.
I regularly hear that the United States makes fantastic products and diverse services, and that the world loves to buy from America. But it is sometimes difficult to keep up when China finances debt traps. Therefore, it is our job to support good transactions that protect the taxpayer.
But now the Congress has given us a new tool to get in touch with our African colleagues so that they consider us and come to us. So I’ve had some intense discussions and we’ll see – that only happened in December, so we’re in the process of pushing through this program and we welcome applicants and look forward to discussing it.
So you may be able to offer some, if not all, of the funding.
The legislation states, “The bank will establish a China and Transformative Exports program to help grant loans, guarantees and insurance at tariffs and on terms and other terms that are fully competitive with the established tariff terms and other terms from the People’s Republic of China. “
The article continues below
Get Your Free PDF: The Top 50 Disruptors
Be prepared for interference
Fill out the form to download the special offer of the Africa report “The Top 50 Disruptors” for free. Get your free PDF by filling out the form below.
And then it also calls on us to strengthen the United States’ comparatively leading position vis-à-vis China or to support US innovations through direct exports in 10 key areas.
So when I meet with my overseas colleagues and share these 10 areas, they are very keen to continue the discussions and think about it, and these areas include things like biotechnology, agriculture, biomedical sciences, wireless communication devices including 5G, renewable energy and water treatment and sanitation.
So these are some specific focus areas that I know are important to Africa and important to our exports.