Africa – opportunity for exporters

As the representatives of BGK say – Africa, albeit risky, is the market with huge development opportunities. BGK has already helped with export transactions of Polish companies in 74 countries, 15 of which are African economies. Ivory Coast, Chad or Mali, among others, are the new countries on the transactional map of the bank.

European market is very tight and so the companies looking for development possibilities focus on Africa. This is the market with continuously growing demand as the African continent invariably indicates high birth rate. The biggest group of the fastest-growing world economies is in Africa.

Africa not just for a holiday

- Based on our analysis, Africa is the fifth export direction, following Belarus, Russia, Ukraine and the group of EU countries, for which the entrepreneurs want to obtain financial support for transactions in BGK. We already support Polish companies on 15 African markets. Over the last three years we helped our customers on eight markets, including recently in Chad, Mali and Ivory Coast. We strengthen the position of Poland and Polish companies abroad with our activities – Joanna Mularczyk, trade finance expert from BGK, explains.

Altogether BGK has completed 94 export transactions in Africa. In recent years the value of the bank’s transactions supporting exports to Africa amounted to PLN 143 million. Among the sectors most important for the exporters cooperating with BGK we can mention automotive, specialist sector e.g. medical equipment or farming and food sector, among others.

- African market is developing extremely dynamically and it is very absorptive. It is also the market on which the company Wielton Africa is gradually developing and strengthening its position. We consistently increase our sales by entering new markets, intensively expanding the sales network and offering modern products adjusted to the customers’ needs. The cooperation with financial institutions supporting Polish export, with BGK among others, is the solid support in completing orders from large customers and leaders in the transport sector of the African market. This support guarantees safe course of transaction with the customer and contributes to the real development of Wielton Africa company – Artur Pietrzak, the director of Wielton Africa, says.    

For Wielton, Africa has been a market with huge potential for several years. Since the establishment of Wielton Africa company in Abidjan in 2017, it invests heavily in the development of new products for the African market, builds the organization in many centers on this continent and improves supply chain and services for customers. As a result the company enters new markets, gains new customers and obtains lucrative orders and also carries out next contracts for longstanding business partners in Africa.

Polish companies appreciate the potential of Africa, think about entering it with their products or are already preparing for it. Transfers of power, military take-overs, conflicts that harass the continent may discourage investors.

- And here comes BGK. Our goal is for Polish companies to feel safe and to expand their operations. We know that the companies need to put a great deal of time and money into exploring a new market, the law applicable in it, obtain necessary permissions for running business, frequently must employ the employees locally or find the right middleman, and also obtain appropriate contacts that will enable export. The company that resigns from the market it has already explored is exposed to additional costs. We give such Polish entrepreneurs the sense of security and help them with the development of their business activities – Karol Rozenberg, trade finance expert from BGK, explains.

BGK assumes from the exporter the risk of non-payment by the counterparty with such solutions as purchase of receivables insured in KUKE. The bank releases the funds directly onto the Polish exporter’s account. In the following years BGK receives payments from the importer. This was the case with Wielton that received from the bank already at the beginning of the year the funds for export transaction made and does not have to be concerned about next transfers from the country with unstable political situation.

The future of exports

Another activity of BGK that supports export to Africa is the buyer’s credit in the sovereign finance structure – it is directly the government of a particular country that is the borrower. The Polish companies in Africa actively seek projects from infrastructural, arms, medical or IT sector. Such projects are directly contracted out by ministries or government agencies of particular countries. Without the financing offer adjusted to a specific project the Polish companies have small chances for concluding such contracts.

- So far we have talked with the representatives of the governments of Angola, Kenya, Rwanda or Senegal. It needs to be emphasized that such talks are lengthy and not only Poland sees the potential of this continent. The companies from all over the world run large investment projects, especially infrastructural, in Africa. The companies from China, France, India or Turkey are particularly seeking such projects. The most important information for Polish entrepreneurs is that we follow Polish companies, irrespective of the sector or location of the project – Arkadiusz Zabłoński, the director of Foreign Transactions, adds.

Moreover, due to the climate Africa is the perfect place for food production. The industry connected with agri-food products storage also holds an opportunity. Due to the lack of suitable technologies in Africa about 40 per cent of all fruit and vegetable production is wasted.

BGK is already helping Polish companies in many of the mentioned countries. The support of exporters in internationalizing their activities influences the increase in the competitiveness of Polish economy.