African trade finance classic launches in Nigeria and penetrates African universities

News | 18 November 2016

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When around 200 guests gathered on for the launch of Dr Benedict Okey Oramah’s trade finance classic, Foundations of Structured Trade Finance in Lagos, Nigeria, they were invited to buy copies of the book, have them signed by Dr Oramah and donate them to African universities. 

 

Access to knowledge

 

The event, hosted at the Eko Hotels & Suites on Victoria Island on 9 November 2016, formed part of the author’s strategy to “make sure that bankers, students, the academia, businesses and government agencies that needed to familiarise themselves with the field of structured trade finance got to read them”. And the fact Dr Oramah chose his home country of Nigeria to get this message across ensured there was a specific call to Nigerian banks to ensure their pool of graduates strengthened their trade finance knowledge with access to this book.

Judging by the long line of purchasers awaiting the author’s moniker (see below), the call to action was not only heard but outperformed – further stocks of the books are on order.

 
 

The event was opened by Femi Edun, special adviser on trade and finance, and the representative of Okechukwu Enelamah, minister of industry, trade and investment for Nigeria. "Dr Oramah is an excellent example of a made in Nigeria product of world class standard, exported to the world out of Africa. We congratulate him today and we celebrate made in Nigeria," said the representative, who went on to point out that structured trade fnance was all the more crucial at a time when there are particular challenges to attract finance into economies that had been historically dependent on commodity exports and there is "a need for structural transformation of our economies".

 
 
Femi Edun gives the keynote talk for teh Nigerian Ministry of Trade
 

Dr Oramah paid homage to the foresight of US Investment financial institution Bankers Trust that, in response to the global debt crisis that had its origins in Latin America in the early 1990s, came up with the architecture of structured trade finance. This was a scheme, said Dr Oramah, which “combined knowledge of economics, law, international trade, commodities markets, finance, statistics and risk to begin lending to selected countries in the continent”.

“The arrangement which splits risks in trade transactions and allocates them to parties best able to bear them challenged previously held notions and concepts on which international financing was based. Through self-liquidating financing arrangements, it converted country risk, a key concern to lending into crisis hit countries, into performance risk and transferred payment risks away from those jurisdictions, enabling international banks to gradually return to such lending with limited risk of cumulative,” he explained.

In a panel discussion chaired by Trade & Forfaiting Review editor-in-chief Clarissa Dann that included beacons of African academia such as Professor Patrick Utomi form Lagos Business School and celebrity African entrepreneur Aliko Dangote, founder of Dangote industries, there was further discussion about how to deal with Africa’s current challenges of petrodollar entrapment, collapse of the Nigerian naira, red tape and bureaucracy at borders, were hopeful of increases in intra-African trade.  “We need to finance education that returns us to competitiveness”, said one panelist. “It is very important that we as Africans come together to solve these problems,” said another.

As publisher of Foundations of Structured Trade Finance, Clarissa Dann introduced the signing session with her reflections on how she first met Dr Oramah at a conference of the International Trade & Forfaiting Association in Barcelona, which resulted in attendance of the 14th Afreximbank Structured Trade Finance conference two weeks later in Lusaka, Zambia. It was here that Dr Oramah explained his dream of getting the book published, and she told delegates how she and her colleagues "did not hesitate" to sign him up and give him his completion deadline.

"Trade is having a tough time all around the world right now as growth in world trade is now slower than that of world GDP. With 80% of the world’s US$20trn of trade financed by some sort of trade credit, there will always be demand for trade finance. But as the developed world banking sector retrenches, emerging economies such as those here on the African continent and here in Nigeria need robust solutions to getting their trade financed and reassuring lenders that trade always gets paid," said Dann. She concluded, "Foundations of Structure Trade Finance sets out those solutions in 240 pages. It has been an absolute honour to have published it."

The outsider expert

 

In an insightful tribute, Afreximbank;s first president, Christopher Edordu reflected on how Dr Oramah's entry into banking was "providential" because the strategy had been to recruit staff already in banking, but as an academic with a research degree "a rare animal in the banking system at the time [1991] the young Oramah was seen as an "outsider". Once installed he built on the existing array of vanilla trade finance products, developing additional products and reinforcing the bank's services. "The environment for deepening innovation was right as access to international trade finance markets, especially the syndications and asset trading business, exposed us to elements of structured finance whichc had immense promise for Africa", said Edordu. "Dr Oramah brought great innovation to its essential form - eventually bringing in such ideas as dual recourse, future flows and exotic features to both credit and treasury".

Commenting on the book, Edordu developed these points, "Dr Oramah's book proves orthodoxy wrong and establishes that even the 'outsider' can readily become an expert. He goes beyond the conference circuit to transfer a new financial innovation witha  book designed to reach among others an audience outside the banking world."

 
 
 
Dr Oramah (third from right) with panelists and supporters at the African launch of Foundations in Structured Trade Finance
 
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