The head of the official export agency of the United States Government says American exports to Sub Saharan Africa remain low and points to an opportunity for export growth to the region.

The President of the US Export-import Bank was speaking with journalists during a roundtable discussion in New York just after his return from the World Economic Forum (WEF) in Kigali, Rwanda.

Bank President and Chair of the Board Fred Hochberg says the bank wants to signal to buyers in Sub Saharan Africa that they stand ready to fill financing gaps that currently limit the purchasing of big-budget American products and services to the region.

“It’s a bank that seeks to finance American exports through direct loans and guarantees to foreign entities that might not have otherwise been able to make the transaction.”

“Since President Barack Obama was elected and I came in as Chair, we’ve done over $7 billion worth of loans, guarantees and insurance in Sub Saharan Africa, almost double the report from President Clinton and President Bush combined,” says Hochberg.

In South Africa, the Bank has made substantial loans for the purchase of American made locomotives by Transnet while a direct loan of over $800 million was made to Eskom in 2011 for engineering and construction services for the Kusile Power Plant in Mpumalanga.

“Although our focus and our mandate are about US jobs, when you put in infrastructure, you create construction jobs and then you also create longer term jobs running the infrastructure but more importantly you take the friction out of the economy. In South Africa we finance engineering services to a power plant, it was several, two, three hundreds US jobs over a four five year period and 15 000 construction jobs in South Africa, so the multiplier effect on the continent is in many ways certainly equal and often greater,” says Hochberg.

Currently, US exports to Sub Saharan Africa total between 1 and 2% as the region becomes increasingly important as a growth pole for American exports that have lagged behind China.

“China has been very dominant in Sub Saharan Africa, there’s no question about that. Our exports to sub Saharan Africa are low frankly if you look at the global economy. Only about 1% of roughly speaking of US exports are destination sub Saharan Africa. It’s about 5% of our portfolio so I’m proud to say that we disproportionately are financing a far larger portion of our exports to sub Saharan Africa than the exports would suggest,” says Hochberg.

As the bank tries to reposition itself as a preferred guarantor of financing for big projects in the region that can benefit companies and secure jobs in the United States.

“One of the reasons for my visits twice and for going to the world economic forum is to signal to both buyers in Sub Saharan Africa and exporters in the United States is that if financing is what holding you back from selling there, we can provide the financing. Our goal is to fill in gaps, when there’s a gap in financing either because American companies may be facing foreign competition or simply the debt markets are too shallow to support some of these larger infrastructure investments, that’s where we step in,” says Hochberg.

There’s no question that the US Export-Import Bank is an institution with an America-first mandate – to grow American exports that create and sustain jobs here in the United States. 

But as their argument goes, financing huge infrastructure projects has economic spin-offs in the region where that financing is put to work. As they hope to grow US exports to the region that currently accounts for under 2% of the global American export market.