REGIONAL TRADE

SOLUTIONS

by

Tetteh BARRIGAH

Head, Regional Business

February 21, 2013

OUTLINE OF PRESENTATION

• About Ecobank

• Footprint of Ecobank Network

• Overview of Trade in West Africa

• Informal Trade

• Our Unique Proposition

• The Regional trade Solutions

• Our Challenges

• Our Recommendation

• Conclusion

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Cliquez pour modifier les styles du texte du masque About Ecobank

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 Lomé, Togo

Widest geographical coverage of any financial institution in Africa

Listed on the Nigerian Stock Exchange, Ghana Stock Exchange and Bourse Régionale des Valeurs

Mobilières (« 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

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Ecobank Network

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ECOWAS 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, Nigeria-

Benin, Mali-Senegal, Senegal-Gambia,

Burkina-Niger, Mali-Cote D’Ivoire,

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 d’Ivoire,Senegal

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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

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ECOBANK’S 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

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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.

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Eco Collection

An export collection product which enables:

• exporters to the ECOWAS sub-region receive payments

into remittance accounts for their exports.

• Credit to exporter’s 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 Ecobank’s 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

• 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 importer’s

country

• Ecobank in the Importer’s country

forwards the Bill of Exchange to the

Importer for acceptance.

• The Bill of Exchange is accepted and

returned to Ecobank in the Importer’s

country with a request to avalise the Bill

(Exporter) Ghana

Togo

(Importer)

€ /$

Aluminium Rods

Collection

Documents

€ /$

€ /$

Collection Documents

Collection Documents

Avalised

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

&

QUESTIONS