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Transcript of U.S. DEPARTMENT OF AGRICULTURE (USDA) FOREIGN AGRICULTURAL SERVICE (FAS) Michele Kennedy-Kouadio...
U.S. DEPARTMENT OF AGRICULTURE (USDA)U.S. DEPARTMENT OF AGRICULTURE (USDA)FOREIGN AGRICULTURAL SERVICEFOREIGN AGRICULTURAL SERVICE
(FAS)(FAS)
Michele Kennedy-KouadioOffice of Trade ProgramsCredit Programs
GSM-102 EXPORT CREDIT GUARANTEE PROGRAM
Doing Business in Africa – Global Trade Forum
November 18, 2013
TRADE PROGRAMSTRADE PROGRAMSFOREIGN AGRICULTURAL SERVICE (FAS)) http://www.fas.usda.gov
Lead international agency in the United States Department of Agriculture (USDA)—
Represents a network of USDA agencies and private companies through its partnership with U.S. Cooperator Groups
FAS OVERSEAS ATTACHES,COUNSELORS, AND TRADE OFFICES http://www.fas.usda.gov/ofso/overseas_post_directory/ovs_directory_search.asp
Point of contact for overseas banks, importers, and governments in overseas markets desiring information about GSM-102 or other programs that help with importation of U.S. agricultural products into their countries
TRADE ASSOCIATE REPRESENTATIVEShttp://www.fas.usda.gov/pcd/PartnersSearch.aspx
By products such as U.S. Wheat Or regional such as SUSTA
U.S. GOVERNMENT AGENCIES THAT PARTNER UNDER THE NATIONAL EXPORT INITIATIVE (NEI)
U.S. Export Import Bank, Overseas Private Investment Corporation, U.S. Small Business Administration/Office of International Trade, U.S. Department of Commerce, U.S. Department of Agriculture, U.S. Agency for International Development’s Development Credit Authority
GSM-102 CREDIT GUARANTEE PROGRAM GSM-102 CREDIT GUARANTEE PROGRAM
Facilitates export financing of U.S. agricultural products by guaranteeing repayment to U.S. banks (or exporters) that extend credit terms to USDA approved banks in the Africa Middle East (AME) region.
http://www.fas.usda.gov/excredits/foreignbanks.html
Buyers of U.S. agricultural products in the AME region seek financing opportunities under GSM-102 when banks in the AME region are reluctant to lend
Importers can seek terms through USDA approved banks in the AME region, even when the shipment destination country is not the same as the location of the bank opening the L/C. Not all countries in the AME region are eligible to have banks approved.
http://www.fas.usda.gov/excredits/countryrisk.html
BANKS: CREDIT TERMS UNDER GSM-102 BANKS: CREDIT TERMS UNDER GSM-102 USDA approved banks in the AME must open an L/C in favor of the exporter of the
U.S. agricultural product
The U.S. bank may or may not confirm the L/C as confirmation is not required under the program
U.S. bank will negotiate credit terms with the foreign bank in the AME region according
to parameters of the GSM-102 program
Tenor extended to the USDA approved bank in Africa will be limited according to the risk grade of the country where the bank resides http://www.fas.usda.gov/excredits/countryrisk.html
The cost of the program is the fee paid by the exporter to USDA http://www.fas.usda.gov/excredits/gsm102fees.html
SUCCESS: SUCCESS: ALL GSM-102 PARTICIPANTS BENEFIT ALL GSM-102 PARTICIPANTS BENEFIT
May help importer obtain attractive loan terms with the USDA approved foreign bank
USDA approved foreign bank receives a
dollar trade credit on attractive terms from the GSM-102 guarantee holder (U.S. bank typically)
Reduces risk to the U.S. bank (or exporter)
Helps exporter of U.S. agricultural
products enter new growth markets in the AME region
IMPORTERS: STEPS TO PARTICIPATEIMPORTERS: STEPS TO PARTICIPATE Learn about the details of participating in
GSM-102 through the USDA representative that covers your country
Find an exporter of the U.S. desired agricultural commodity
Enter into a firm sales contract with the exporter
Negotiate loan terms under GSM-102 with a USDA approved bank who is willing to open an L/C
Ask the exporter to register the export sale contract under the GSM-102 program
The exporter will provide a copy of the sales contract to USDA if required
The U.S. exporter must pay the GSM-102 fee before shipment of your goods and before a GSM-102 guarantee is issued
Note:
As GSM-102 does not cover the
risk of the AME bank opening the L/C,
the bank is likely to review the
importer’s company financials and cash
flow to cover any risk the bank may
assume—
Risk CategoryTenor 0 1 2 3 4 5 6
90 Days $0.182 $0.186 $0.196 $0.257 $0.343 $0.463 $0.614
4 Months $0.211 $0.215 $0.227 $0.296 $0.398 $0.535 $0.716
6 Months $0.236 $0.241 $0.254 $0.332 $0.445 $0.599 $0.796
9 Months $0.323 $0.330 $0.347 $0.453 $0.608 $0.819 $1.088
12 Months $0.350 $0.357 $0.376 $0.491 $0.659 $0.887 $1.178
15 Months $0.492 $0.503 $0.529 $0.691 $0.928 $1.248 $1.658
18 Months $0.561 $0.574 $0.604 $0.789 $1.058 $1.424 $1.892
24 Months $0.686 $0.700 $0.737 $0.963 $1.293 $1.738 $2.310
GSM-102 (Premium per $100 USD of GSM-102 coverage)Semi-Annual Payment of Principal
FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEEFEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEEBased On Tenor (Between Banks), Risk Grade Of Country Where Bank Is Located, Amount Of Sales Contract Covered Under GSM-102, and Repayment Intervals
Risk CategoryTenor 0 1 2 3 4 5 6
9 Months $0.435 $0.445 $0.468 $0.611 $0.821 $1.104 $1.468
12 Months $0.464 $0.474 $0.499 $0.652 $0.875 $1.177 $1.564
15 Months $0.602 $0.616 $0.648 $0.846 $1.136 $1.528 $2.030
18 Months $0.667 $0.682 $0.717 $0.937 $1.258 $1.692 $2.248
24 Months $0.851 $0.869 $0.915 $1.195 $1.604 $2.157 $2.866
GSM-102 (Premium per $100 USD of GSM-102 coverage)Annual Payment of Principal
FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEE FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEE Based On Tenor (Between Banks), Risk Grade Of Country Where Bank Is Located, Amount Of Sales Contract Covered Under GSM-102, and Repayment Intervals
AME BANK PARTICIPATIONAME BANK PARTICIPATION
Read about details of the GSM-102 program
http://www.fas.usda.gov/excredits/reg.asp
Contact Credit Program Division Representative for Details - [email protected]
Discuss possible terms that could be negotiated with your U.S. correspondent banks under GSM-102
Look at the guidelines to apply for review and approval under the GSM-102
http://www.fas.usda.gov/excredits/foreignbankreq.html
Your bank must have a location in an AME bank eligible country
Importer of U.S. goods will seek loan terms from the AME bank
As the terms extended under GSM-102 to the AME bank occur because the importer is buying U.S. agricultural products
The AME bank benefitting from the trade credit, will likely be encouraged to extend loan terms to the importer
Your bank may receive up to two years (varies by location of the bank in country) in repayment terms to the U.S. bank
The loan you extend to the importer is not guaranteed under GSM-102, and USDA is not involved in the terms between the foreign bank and the importer
GLOBAL USAGEFY 2011 – 2012 (in USD
millions)
+Eurasia Region discontinued in 2012
$ U
SD
Mill
ions
GSM-102
AME REGIONAME REGION10/1 thru9/30
ShippingLocation
Announced($mil)
Registered ($mil)
Bank Used in the AME
Agricultural Products
2011 Egypt, Morocco, Saudi Arabia, Nigeria, Guinea Bissau, Iraq, Ghana
$350 $239 Africa Export Import Bank (Multilateral Egypt) , Mashreqbank (UAE), Investec (South Africa),
Soybean Meal Soybean Oil Wheat Yellow Corn
2012 Angola, Egypt, Ghana, Morocco, Saudi Arabia, Tunisia
$400 $246 *
* reflects cancellations
Afrexim MashreqbankInvestecMauritius Commercial Bank
Poultry, Soybeans, Rice, Soybean Oil, Wheat, Yellow Corn, Soybean Meal
2013 Angola, Egypt, Ghana, Libya, Nigeria,Tunisia
$475 $173 Mauritius Commercial Bank, Africa Export Import Bank, Investec, Mashreqbank
Poultry, Soybeans, Soybean Meal, Wheat, Soybean Oil, Rice, Yellow Corn
U.S. MARKETS – U.S. MARKETS – Leading Regional Markets:• Sub Saharan Africa ranks 12th • North Africa ranks 14th
BICO Report through June 2013
SubSaharan Africa (BICO – June 2013)
Top U.S. Markets – Not in Rank order
Ghana
Ethiopia
South Africa
Angola
Kenya
Liberia
Cameroon
Gabon
Nigeria
SubSaharan African Top U.S. MarketsSubSaharan African Top U.S. Marketsby Commodity Categoryby Commodity Category
(Tons) BICO Report Oct-Dec 2012 (Tons) BICO Report Oct-Dec 2012Country Consumer
OrientedIntermediate Bulk
Nigeria 12,347 5,505 193,475
Ethiopia 1,017 149 50,470
Angola 65,938 1,902 2,522
Ghana 53,087 4,497 41,085
Kenya 3,363 13,350 23,885
Cameroon 440 2,238 23,786
Gabon 18,948 202 130
South Africa
12,931 10,545 21,549
CongoBrazzaville
13,945 52.9 0
CongoKinshasa
11,624 21.2 2.8
PRODUCTS COVERED PRODUCTS COVERED Must Must be U.S. origin be U.S. origin
• Bulk commodities (wheat, feed grains, soybeans, rice)
• Intermediate products (oilseed meals, flour, hides, genetics, seeds, saplings)
• Consumer-oriented products (meat, fruits, vegetables, grocery products)
• Fiber: cotton and wool, including fabric and yarns
• Forest Products: Wood and wood products
http://www.fas.usda.gov/excredits/gsmcommodities.html
ELIGIBLE COUNTRIESELIGIBLE COUNTRIES
AFRICA AND MIDDLE EAST REGION
Participating Countries Can Receive Shipments; and *Some are also Eligible to Have Banks Approved:
Afghanistan, Algeria*, Angola*, Bahrain*, Benin, Botswana*, Burkina Faso*, Burundi, Cameroon*, Cape Verde*, Central African Republic, Chad, Comoros, Cote d’Ivoire, Democratic Republic of the Congo, Djibouti, Egypt*, Equatorial Guinea, Eritrea, Ethiopia, Gabon*, Gambia, Ghana*, Guinea, Guinea-Bissau, Iraq, Israel*, Jordan*, Kenya*, Kuwait*, Lebanon*, Lesotho*, Liberia, Libya, Madagascar, Malawi*, Mali, Mauritania, Mauritius*, Morocco*, Mozambique*, Namibia*, Niger, Nigeria*, Oman *, Pakistan, Qatar*, Republic of the Congo, Republic of South Sudan, Rwanda, Saudi Arabia*, Senegal*, Seychelles, Sierra Leone, South Africa*, Swaziland*, Tanzania*, Togo, Tunisia*, Uganda*, United Arab Emirates*, West Bank/Gaza, Yemen, Zambia* and Zimbabwe.
* USDA has determined that the following countries in this region are eligible to have banks approved (as of August 7, 2013):
Check Website Routinely for Additions/Deletions
Banks interested in becoming approved by CCC should visit the link below for more information. http://www.fas.usda.gov/excredits/foreignbanks.html
ELIGIBLE BANKSELIGIBLE BANKS• Eastern and Southern African Trade and Development Bank (PTA Bank),
Burundi/Kenya (Multilateral)• African Export-Import Bank (Afrexim), Egypt (Multilateral)• Byblos Bank S.A.L., Lebanon• The Mauritius Commercial Bank Ltd., Mauritius• Attijariwafa Bank, Morocco• BMCE Bank, Morocco• Investec Bank Limited, South Africa• Nedbank Limited, South Africa• Abu Dhabi Commercial Bank PJSC, United Arab Emirates• Credit Europe Bank (Dubai) Ltd., United Arab Emirates• Mashreqbank PSC, United Arab Emirates• National Bank of Ras Al-Khaimah PSC (Rakbank), United Arab Emirates
USDA REPRESENTATIVES IN AFRICAUSDA REPRESENTATIVES IN AFRICA
ETHIOPIA – American Embassy, Addis Ababa
Quintin Gray, Counselor
Covers African Union, Djibouti, Eritrea, Somalia,
South Sudan, Yemen
KENYA – American Embassy, Nairobi
Kate Snipes, Counselor
Covers Burundi, Malawi, Rwanda, Tanzania, Uganda, Zambia
NIGERIA – U.S. Consulate General, Lagos
Russell Nicely, Counselor
Covers Benin, Cameroon, Ghana, Liberia
SENEG AL – American Embassy, Dakar
Joani Dong, Attache
Covers: Burkina Faso, Cote d’Ivoire, Mali,
Niger, The Gambia
SOUTH AFRICA – 877 Pretorius Street, Pretoria
Eric Wenberg, Minister Counselor
Corey Pickelsimer, Senior Attache
Nicolas Rubio, Attache
Covers: Angola, Botswana, Lesotho,
Madagascar, Mauritius, Mozambique,
Namibia, Swaziland, Zimbabwe
OFFICE OF TRADE PROGRAMSOFFICE OF TRADE PROGRAMSCREDIT PROGRAMS DIVISIONCREDIT PROGRAMS DIVISIONGSM-102 Export Credit Guarantee Program GSM-102 Export Credit Guarantee Program
Africa and the Middle East
Business Development and Planning [email protected]