Ex-Im Bank Backs More Trade with Sub-Saharan Africa
Byline: Heather J. Carlson, THE WASHINGTON TIMES
Poor infrastructure, bureaucratic red tape, and fears of political instability have made some American companies skittish about doing business in sub-Saharan Africa.
J. Joseph Grandmaison wants to change that.
A U.S. Export-Import Bank board member, Mr. Grandmaison helped organize an international conference in Johannesburg next week to bring together U.S. and African businesses. The Wednesday-Thursday meeting, co-sponsored by the Corporate Council on Africa (CCA), will focus on ways to increase capital flows such as machinery and equipment to the continent by boosting U.S.-African trade connections.
"Africa is becoming increasingly important to the United States when it comes to international trade," Mr. Grandmaison said. "And infrastructure development is key to Africa's economic growth."
Bolstering trade between the United States and sub-Saharan Africa became a priority for the bank after Congress recently mandated that it direct more financing to African projects.
The Ex-Im Bank offers financing tools and protection for U.S. exporters. It also helps creditworthy African entrepreneurs import U.S. goods by extending medium-term financing at 8 percent interest, as opposed to the 26 percent rate offered in many African countries.
Last year, the bank helped finance a record $700 million in U.S. exports to sub-Saharan Africa. That financing can make all the difference, according to Mr. Grandmaison, managing director for U.S.-based Harris Corporation's Africa and Middle East Microwave Group.
Harris Corporation recently won a $17 million contract to install a new wireless network in southwestern Nigeria for Odu'a Telecoms Limited. The project would probably not have materialized without a $10.4 million loan guarantee provided by the Ex-Im Bank, Mr. Grandmaison said.
"You have to bring financing," he said. "Otherwise, in most cases, the project doesn't go through."
He added: "The Export-Import Bank has basically helped pacify some of the stiff competition we get from our European competitors."
Over the past few years, interest in Africa's markets has grown steadily among U.S. businesses, said Anita Henri, CCA vice president. As evidence, the organization's membership has more than tripled since 1999 to 195 companies. The council represents businesses in the United States and Africa and strives to foster trade between them.
The CCA has also teamed up with other experts to draft a 10-year strategy for increasing capital flows to Africa.
"I think that as African governments become more democratic, I think as they put in regulatory frameworks that protect the foreign investors, and I think as U. …