South Africa's Export Credit Insurance Corporation (ECIC) is contemplating support for L/Cs to help exporters in key priority sectors as African countries prepare for increased trade and industrialisation following the signing of the African Continental Free Trade Area (AfCFTA) agreement.

The move follows a new mandate signed by trade, industry and competition minister Ebrahim Patel directing ECIC to focus on a portfolio of new export sectors, including global business services, film animation, chemicals and plastics, green industry, medical products and capital goods.

Export support

To support such exports, the board of the ECIC is currently considering policies for a range of trade supportive products.

These include L/Cs, advance payment bonds/guarantees, discounting and factoring facilities, short-term credit facilities and other trade credit support as may be required by South African businesses from time to time.

Risk mitigation and de-risking

The ECIC also says it is expanding its product range to provide coverage to small- and medium-sized enterprises and first-time exporters.

The insurer's new mandate aims to assist new exporters not only in mitigating export risks, but also in de-risking businesses, allowing them to raise capital which can increase prospects of exports to other African markets.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.