Ecobank taps into AfCFTA
ECOBANK Zimbabwe Limited will support Zimbabwean companies looking at tapping into the African Continental Free Trade Agreement (AfCFTA) market as the pan-African financial institution looks at leveraging on its strong African footprint.
This follows the operationalisation of the AfCFTA which is expected to be the largest free trade area in the world since the formation of the World Trade Organisation (WTO), given Africa’s current population of 1,2 billion people.
Zimbabwean companies have since started making strides towards the market and Ecobank Zimbabwe is already working with some firms to take advantage of the unfolding opportunities.
The AfCFTA is expected to increase trade among African countries which currently ranges between 15-18% as well as strengthen the capacities of African companies to access and supply world markets.
Ecobank Zimbabwe head of corporate banking Christopher Mutasa told businessdigest that AfCFTA presents numerous opportunities for most local companies.
“Considering our presence in 33 countries you would find that we are well aware of various markets and their requirements. So any Zimbabwean company that needs to get into a certain market in Africa, we are able to come up with the proper trade advisory solutions and financial instruments to make sure that those companies are able to tap into that market,” Mutasa said.
“Ecobank is well positioned to assist in this new market. So we have since identified the companies in collaboration with ZimTrade. The biggest risk for Intra-Africa trade is that of information asymmetry and that companies lack full information about the markets and the players they intend to do business with. At Ecobank we are able to use our extensive footprint to do proper due diligence on behalf of our clients.”
The AfCFTA agreement entered into force on May 30, 2019 for the 24 countries that had deposited their instruments of ratification. The operational phase was launched during the 12th Extraordinary Session of the Assembly of the Union on the AfCFTA in Niamey, Niger in July 2019. Trading under the AfCFTA Agreement began on New Year’s day, last year.
The pan-African financial institution is one of the banks that have shown capacity to handle issuance of lines of credit and guarantees mostly for the supply of critical essentials such as on-demand cooking oil and fuel as well as providing financial support for the country’s strategic sectors.
The financial institution has managed to tap into the trade financing niche market leveraging on the group’s muscle.
The bank has been providing a credit line for the importation of critical consumables and the bank currently boasts its capacity to design and execute unique trade structures to support miners.
As part of its expansion, the financial institution recently embarked on a refurbishment exercise on its branch network to meet customer demands and modern trends as it seeks to grow its market share.
The Lome-headquartered financial institution currently boasts 12 branches across Zimbabwe and is still looking at opportunities to expand while following its value chain strategy on expansion.
Ecobank segments its businesses in Africa into four geographical regions. These reportable operating segments are Francophone West Africa (UEMOA), Nigeria, Anglophone West Africa (AWA), Central, Eastern and Southern Africa (CESA).
In the first quarter of 2019, the group made changes to its regional reportable operating segments to bring simplicity and better alignment to the way management views the operations.
The financial results of the constituent affiliates of Ecobank Development Corporation (EDC), the group’s Investment Banking (IB) and Securities, Wealth, and Asset Management (SWAM) businesses across its geographic footprint, were segmented by their country of domicile and included accordingly into applicable regional segments – UEMOA, Nigeria, AWA, or CESA.