No one in Africa talks about the benefits of trade more than Jean-Louis Ekra. No person espouses the glory of trade with the commitment of an evangelist more than Ekra. Indeed, no one can boast of a better grasp of the challenges and prospects of trade on the continent better than him. He runs the African Export-Import Bank (Afreximbank) in Egypt, which task is to capture the glory of trade so that African economies can enjoy sustained growth. He argues for trade, talks finance and dreams Africa. “Nothing can enhance Africa’s development more than fair trade,” he tells even those who do not wish to listen.
He sees the potential of African economic development as inextricably linked to the promotion of trade, to a vibrant export and import machinery churning out jobs and deepening development in every sector and every segment of the population. He says: “Trade is a powerful engine for economic growth and development. It has been clearly illustrated in South-East Asia and Europe. I believe that if we are to explore the avenue of trade, it will help our continent go a long way in its development path. I believe in the virtue of trade and we just need to copy what the Asian countries have done over the past 30 years. The success of the development path of Asia is largely hinged on trade.”
Since he took office as the president of Afreximbank in January 2005, he has built relationships of trust and mutual respect between the Bank and African governments. “Many African governments are now looking at Afreximbank for advice in developing their exports sector. We have several examples of countries that have approached the Afreximbank to help them design proper export promotion schemes. We have an observer status and a cooperation agreement with the African Union, whereby for all issues regarding trade on the continent, the AU invites us to participate in the discussion. I think it is an encouraging sign that more African countries are now looking at their own instrument, which is Afreximbank for support in all trade development issues,” he says.
Afreximbank has earned this trust and respect not by trumpeting its own achievements, but by sheer hard work. The 20-year old bank with authorized share capital of $5billion has investment grade credit rating from Fitch, Moody’s, and Standard and Poor’s. Over the last seven years, it has come to be widely regarded as one of the best-run multilateral institutions in the world today in spite of its relative modest size. Afreximbank’s return on equity in 2012 was 11.9%. Its non-performing loan is only 1.02% of its total loan portfolio, a testament to its astute understanding of good investment prospects on the continent. According to Dr Caleb Fundanga, respected former Governor of Bank of Zambia, “on the basis of credit rating, return on equity, cost income ratio, business penetration, etc, Afreximbank’s performance has been outstanding.”
It is the leading trade finance bank in Africa and has worked assiduously to promote intra-African trade. Intra-African trade’s share of total African trade has grown from 8.87% in 2005 to 11.3% in 2012. The dollar value of the intra-trade was $144.3 billion last year. Overall, trade in Africa currently stands at $1.28 trillion, an improvement from the $200billion it was 20 years ago — thanks to Afreximbank.
This improvement notwithstanding, intra-African trade is still very low compared to the other regions such as North America, which stands at 55% and this causes Ekra deep concern. “I believe that intra-African trade should be promoted. It is one of the objectives of the Afreximbank. Africa as a continent trades very little with itself.”
One of the obstacles to rapid growth in intra-African trade is the relatively weak private sector. Ekra maintains that “the private sector is an engine for economic growth and sustainable development. For a successful regional trade, there is need for dynamic private sector to maintain and sustain trade.”
The poor state of infrastructure and low diversification of African economies are also hindrances to trade in the continent. Intra-African trade is not doing very well because the economies of most African nations are not well diversified as virtually all of them are trading in raw materials. The problem, he says, is the “continuous attempt to sell raw materials rather than processed products. We cannot explain why after 50 years of independence we continue to operate the colonial model. We all know that the colonial model was one where raw materials and the commodities were exported to Europe and America to be processed and then sent back to our continent.”
The 62-year-old Ivorian top technocrat is not a person who sees only problems. Ekra views these obstacles as both challenges and opportunities. Through his brilliant leadership, the nimble and efficient machinery that is the Afreximbank is working with governments and the private sector to convert obstacles to bankable projects. In this effort, Ekra could be likened to a debonair troubadour who is luring African economies to embrace the love and glory of trade.