REGIONAL TRADE SOLUTIONS

by Tetteh

BARRIGAH

Head, Regional Business March 24, 2011

OUTLINE OF PRESENTATION About Ecobank Footprint of Ecobank Network Financials of Ecobank Overview of Trade in West Africa Informal Trade Our Unique Proposition The Regional trade Solutions Our Challenges Our Recommendation Conclusion

Cliquez pour modifier About Ecobank du masque les styles du texte

Founded in 1985 by the Federation of West African Chambers of Commerce Initial shareholders from 14 West African countries Ecobank Transnational Inc. (ETI) is the parent company of the Ecobank Group Incorporated as a regional bank holding company in Lom, Togo Widest geographical coverage of any financial institution in Africa Listed on the Nigerian Stock Exchange, Ghana Stock Exchange and Bourse Rgionale des Valeurs Mobilires ( BRVM ) since September 2006 Universal banking model with 11,000 employees across 33 countries. Key Strategic Alliances Nedbank, Bank of China, Old Mutual and ACCION

Ecobank Network

Informal Sector Cattle, Grain, Plastics, Textile, Rice, Automobiles, Food Stuff (Dried Fish, Onions etc) Approx 30% of GDP(US$50b) (WTO) Formal Sector Petroleum products, Manufactured product, Aluminum, Processed wood, Building Material, Agricultural Products Approx 11% of GDP (WTO) Main Trade corridors Ghana-Burkina, Ghana-Togo, Ghana-Niger, Ghana-Nigeria, Nigeria-Niger, NigeriaBenin, Mali-Senegal, Senegal-Gambia, Burkina-Niger, Mali-Cote DIvoire, Senegal-Gambia, Guinea- Gambia Major Ports : All West Africa countries are bounded by Atlantic except Mali, Niger, B/Faso, however, major ports are Nigeria, Ghana, Togo, Cote dIvoire,Senegal

ECOWAS

INFORMAL TRADE
Informal trade remains the main form of trade among West

African nations.
It is estimated to be three times the level of recorded trade.

about USD8 billion worth of informal trade settlements

ECOBANKS UNIQUE PROPOSITION OUR REGIONAL TRADE SOLUTIONS

A regional financial institution like Ecobank provides formal channels for trade settlement through: bespoke products and services

Identification of business opportunities

Ecobank as a real and vital catalyst for increased trade flows

RAPID TRANSFER
This refers to payments between Ecobank affiliates on our money transfer platform. Instant receipt of payments. An important alternative to carrying cash across borders. This product has assumed increasing significance among ECOWAS member countries.

Eco Collection
An export collection product which enables:
exporters to the ECOWAS sub-region receive payments into remittance accounts for their exports. Credit to exporters account in Ecobank Payments are verifiable via our internet banking platform before buyers pick their goods . This largely reduces fraud

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BANK COLLECT
This product facilitates Regional collections & payments Client interface which permits clients to view all transactions across all Ecobank branches Collections of US visa fees in Ghana,Liberia, Sierra Leone and Gambia recently. This is a new product developed in furtherance of Ecobanks zeal for exporters to take advantage of the ECOWAS MARKET

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AVALISED BILL PRODUCT

An efficient way to process trade transactions between Ecobank affiliates This product expedites trade settlement on behalf of our

customers
A cheaper trade solution for international trade

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AVALISED BILL STRUCTURE

/$ Ghana (Exporter)
Collection Documents Avalised

Bill

Aluminium Rods Collection Documents

/$

Collection Documents

Togo

(Importer)

/$

Both exporter and importer must operate accounts in the Ecobank group Exporter ships goods to the Importer on a Bills for Collection basis through Ecobank stating payment will be via Ecobank Ghana under avalisation. Upon shipment of the goods, documents are presented to Ecobank Ghana, to be forwarded to Ecobank in the importers country Ecobank in the Importers country forwards the Bill of Exchange to the Importer for acceptance. The Bill of Exchange is accepted and returned to Ecobank in the Importers country with a request to avalise the Bill

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WHAT IS AVALISATION
The word "aval" in French means endorsement. A simple bill of exchange/term draft accepted by an

importer does not guarantee payment on maturity.

An endorsed or an avalised bill however guarantees

payment on maturity.
An aval is thus a guarantee of payment of a Bill of Exchange at maturity by a bank or another party.
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BENEFITS OF AVALISATION
Ecobank on both sides of the transaction, enables Exporters obtain immediate funds after discounting a payment guarantee without the need for a Letter of Credit and its related costs. exporters are able to benefit from a seamless end-to-end solution.

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ECOCHEQUE
A payment instrument fashioned out to reduce the level of
cash transactions in West African trade. It may be purchased at any affiliate of Ecobank and

cashable at the counter of any Ecobank affiliate

This instrument should be particularly attractive to traders

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OUR CHALLENGES IN REGIONAL TRADE

Ecobank still faces some challenges:
The Black market

Some traders still carry cash around to transact business with the tacit
support of exporters Restrictions placed on certain products entering countries like Nigeria which restricts trade.

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RECOMMENDATIONS TO INCREASE EXPORTS TO ECOWAS

Easing of Exchange Control Regulations for West African Transactions. Current practice discourages payments through the banking system. Whilst encouraging companies to acquire ETLS status, we also ask that approvals for this which takes up to half a year be reduced to quarterly. Support should be given to businesses that deal in West African currencies. Such companies could benefit from the preferential allocation of other convertible

currencies for imports

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CONCLUSION
From the foregoing, it goes without saying that:
trade in the sub region is on going

Ecobank is best placed to facilitate intra regional trade and these solutions are:

Rapid transfer,eco collection,avalised bills,ecocheques and our advisory services.

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THANK YOU
&

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