UK Export Finance (UKEF), the UK’s export credit agency, has provided financing valued at £620m ($807m) to support UK exports to four African countries and believes it will play a much bigger role in bolstering the country’s trade with the continent after Brexit.
UK international trade secretary Liz Truss told the UK-Africa Investment Summit in London on January 20, 2020 that UKEF had unlocked overseas contracts for UK exporters to provide goods and services for six national infrastructure projects across Africa.
These initiatives include: 750 hospital beds for maternity care in Ghana; an upgraded terminal at Kumasi airport in Ghana; 600 hospital beds and 108 rural healthcare centres powered by solar energy in Zambia; an industrial business park set to create 200,000 jobs in Uganda; upgrades to more than 80 kilometres of road surfaces in Gabon; and the supply of equipment to a Ugandan roads project.
The latest deals build on a range of infrastructure projects that UKEF has already facilitated in Africa, amounting to about £2bn-worth of support in the past two years. It is raising its risk appetite in several African countries and its country limit for trade with Rwanda has jumped fivefold -– it is now worth up to £500m – while its available support to Nigeria and Egypt has been raised to £1.25bn each.
“UKEF can really help to support UK exports to African countries,” said Louis Taylor, UKEF chief executive officer. “The change in banking regulations post-crisis discouraged many international banks from providing finance to support commerce with African countries perceived as ‘risky’, but we are able to step in and help fill the gap.
“Furthermore, in Africa many international banks are reluctant lenders to private companies. However, when we offer a guarantee on a loan, their appetite is greater, since their risk is on the UK government rather than a company. UKEF has a much stronger focus on Africa nowadays and we are being much more proactive in the region. I think we will undertake many more transactions in the continent in the near future.”
The agency expects to play a greater role in bolstering the UK’s trade with the rest of the world now it has exited the EU, and plans to increase its headcount to 390 by March 2021 from 340 today. It already has eight international finance executives globally but plans to take that number up to 20. It has hired executives for new offices in Accra in Ghana and Nairobi in Kenya and plans to recruit in Cairo, Johannesburg and Casablanca.