Honorable Minister of Finance of the Kingdom of Lesotho, Mr. T. Thahane,
Honorable Ministers
Members of the Board of Directors of Afreximbank,
Governor of the Central Bank of Lesotho, Dr. Moeketsi Senaoana,
Governors of Central Banks represented here,
Senior officials of The Kingdom of Lesotho,
Distinguished Ladies and Gentlemen
It is with great pleasure and excitement that I welcome you all to the very important event of the accession of The Kingdom of Lesotho to the Agreement Establishing The African Export-Import Bank which we are witnessing here today. This event has a significance that far exceeds the simple ceremony we will be performing shortly. First, it expands the membership of the Bank and by extension the number of countries eligible to receive the Bank’s services. As trade is a 2-way affair, it makes it possible for Lesotho to receive Afreximbank’s support for its trade with 33 other African countries as well as its trade with the rest of the world. It also makes it possible for other members of our Bank as well as non-African investors to look at Lesotho as a trade and investment destination eligible for support from Afreximbank. This will certainly increase intra- African trade and investments and will unblock trade and investment flows that may require further credit enhancement and/or financing to get into Lesotho; second, the membership of Lesotho assures us that the work the Bank is doing is relevant to the needs of our Continent. This will further reinvigorate the Bank to continue to tenaciously pursue its mandate. It will also make it possible for the Bank to diversify the geographic spread of its portfolio while extending its trade and development impact across Africa; third, Lesotho’s accession also provides the Bank an opportunity to show those currently considering membership that such a move will be in their overall national interest. In this regard, the Bank will shortly begin an aggressive intervention in Lesotho’s trade sector as a way of creating a demonstration effect; fourth, the approach of Lesotho in considering its membership of the Bank was one we found commendable. They carefully rationalized their membership before committing to join. What that means is that they already know what they want to get from the Bank which has made it easier for us to agree the areas of intervention and a work programme. If others take the same approach, it will make it easier for them to receive the Bank’s resources and in a manner that addresses their needs most efficiently; and finally, Lesotho has not stopped at accession to the Agreement Establishing the Bank, it has also taken equity in the Bank making it possible for it to participate in shaping the Bank’s strategic direction.
Honorable Ministers,
Distinguished Ladies and Gentlemen,
We are proud and happy to welcome Lesotho to the Bank because Lesotho is a very important trading country in Africa. While its total trade amounted to USD 2.9 billion in 2008, exports stood at USD 1 billion, dominated by manufactures. Lesotho is one of the largest exporting countries in Africa, per capita and as percent of GDP. It is certainly a leading exporter under the Africa Growth and Opportunity Act (AGOA) of the US Government. Lesotho’s exports are dominated by textiles, especially in the form of garments. While these are all positive indicators, the downside is that it exposes The Kingdom of Lesotho to external shocks exemplified by the current economic crisis. Lesotho must therefore diversify its external sector to ameliorate the impact of such shocks on its economy. The diversification should be in the form of markets and products. Given that Lesotho currently exports successfully to the quality-sensitive US market, The Kingdom has met an important pre-requisite for entry into diverse markets. The help it needs now is policy and funding support. And that is where Afreximbank can be an important partner of The Kingdom. We have therefore advanced discussions on areas we can support Lesotho. In this regard, we are looking to work with them towards diversifying their exports into Africa and other south markets. On an Advisory role, we are working to create an institutional arrangement that will spear-head the market diversification drive drawing from the Asian experience; we intend to include Lesotho as one of the 6 Pilot Countries for the early implementation of our Export Development Programme under which we promote the development of value-added exports through a variety of instruments; Our African Letter of Credit Confirmation Scheme will also be made available to Lesotho to enable its exporters to aggressively explore regional markets; we are also discussing ways we can create local capacity for export financing, including export supply chain financing. As I said earlier, we are going to aggressively pursue these initiatives as Lesotho, though a small country is a shinning example of what we think the African export sector should be and we believe it is in the interest of our work to make it an outstanding success story.
Honorable Ministers
Distinguished Ladies and Gentlemen
Today’s event would not have been possible but for the far-sightedness of Honorable Thahane who worked tirelessly on this project. I will also like to recognize the work of the Central Bank of Lesotho, under Governor Senaoana, for the tremendous progress we made during negotiation of Lesotho’s membership of the Bank. Thanks are also due to the other officers of the Kingdom of Lesotho and Afreximbank staff for making this event possible. For the members of the Press covering this event, I will like to invite you to give it the positive coverage it deserves so that others can learn from it and join the effort we are all making to turn Africa into a prosperous economy in the shortest possible time.
I thank you for your attention.
Jean-Louis EKRA
PRESIDENT, AFREXIMBANK
DAKAR, SENEGAL
MAY 13 2009.