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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
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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