Included in the continuing resolution passed this week by Congress was a measure which extends the charter of the U.S. U.S. Export Import Bank (“Ex-Im Bank”) through June 30th of next year. Renewing the charter of Ex-Im Bank (which was set to expire on October 1st) was a hot topic of conversation this past summer including during the U.S.-Africa Business Forum of the U.S.-Africa Leaders Summit. Thus this short-term renewal is a welcome (albeit brief) reprieve to an institution that provides important assistance to U.S. businesses looking to compete in Sub-Saharan Africa and other emerging markets .
Similar to the nearly sixty export credit agencies around the world, Ex-Im Bank provides businesses with loans, guarantees, credit insurance and other financing tools to support the trade and export of goods and services from the U.S. into foreign markets. Sub-Saharan Africa is a priority region for Ex-Im Bank and, since 1999, the institution has assisted over $5 billion in transactions across the region. Ex-Im Bank is especially important to small- and medium-sized enterprises since U.S. financial institutions often are reluctant to bear the risks and complexities of doing business in these markets. With trade and investment becoming an increasing priority of the U.S.-Africa relationship, Ex-Im Bank has seen an expanding presence on the continent and, last year, it supported a record 188 transactions across 35 countries in the region.
Seeking to capitalize on this momentum, over the next two years Ex-Im Bank is set to commit up to $3 billion in financing in Sub-Saharan Africa in addition to an existing $5 billion commitment for Power Africa and a planned commitment of $1 billion for infrastructure projects in Angola. Ex-Im also has plans to work with the Small Business Administration to target and assist small- and medium-sized enterprises who are interested or invested in the continent.
The short-term renewal is a welcome breakthrough after months of wrangling over the reauthorization of Ex-Im Bank. The next steps must be to guarantee long-term renewal of an institution which is essential to helping U.S. exports stay competitive in a world where other countries “have adopted increasingly sophisticated export promotion plans and are offering national financing […] to support their companies’ deals in Africa.”