Stanbic IBTC Bank, one of Nigeria’s foremost financial institutions, has initiated the African-China Agent Proposition (ACAP) which purposes to assist Nigerian importers to safely and efficiently locate and authenticate quality goods from the most competitive vendors in China. The offering, which is anticipated to connect African importers and Chinese exporters (thus, opening China to Africa) was formally launched in Nigeria recently, with plans to also launch in Ghana and South Africa, with other marketplaces in Standard Bank’s African footprint to follow before the end of 2019.
Chief Executive, Stanbic IBTC Bank Plc, Dr. Demola Sogunle, in his remarks, reconfirmed the bank’s objective of continuously exploring prospects of adding significant value to the businesses of its customers.
“Stanbic IBTC has established market leadership in several financial services segments, and our ultimate goal is to continually leverage our connections, knowledge and experience in delivering impeccable service and value that would similarly make our customers not just get ahead but emerge leaders in their respective business segments and ACAP is another of such enablers,” Sogunle said.
The agent proposition offering is expected to transform African importers’ view of China’s supply universe. It would also lighten the cash flow of African importers by providing them access to finance, while enabling importers with sight and control of their entire importing and logistics process.
Challenges Encountered By The Trade Partners.
According to Standard bank, “Nigerian importers presently place orders from only a handful of trusted Chinese vendors. This limits the bargaining power of African importers while stacking the terms of trade (ToT) against them. While online orders offer access to a wider range of suppliers, it cannot assure the quality of goods. In most cases too, advance payments for goods is required. This is often demanded in cash without reciprocal guarantees of delivery or quality. This means that Nigerian importers often carry a disproportionate burden of risk in most transactions.
“Language and cultural barriers are also a challenge for African importers when travelling and negotiating supplier agreements in China. In response to these challenges, and in light of the vast opportunity that China presents as a trading partner, Standard Bank, the biggest bank in Africa, has leveraged its partnership with the Industrial and Commercial Bank of China (ICBC), the biggest bank in the world, to connect African importers with a dedicated trade agent in China.”
The Effect Of The Move To African And Chinese Traders.
Head, Africa China Integration, Standard Bank, Dr. Manasseh Alagbaoso said, “The ACAP offering – underpinned by a letter of credit – will deepen trust in Africa-China trade relationships, guaranteeing African importers access to the best suppliers in China, the best payment terms and the best quality.”
Also, if any of the terms of the letter of credit are not met, payment will not be made. As such, the offering would “place African importers in a much stronger negotiating position when it comes to the price, quality and efficiency of importing Chinese goods.”
In the same vein, Manasseh added that the Chinese suppliers can be very confident that once the terms of the letter of credit have been met, payment will be made in full and on time – guaranteed by Stanbic IBTC Bank or the Standard Bank group and Industrial and Commercial Bank of China.
Understanding the African-China Agent Proposition.
The African-China Agent Proposition aims to help African importers of Chinese goods climb over the trade hurdles such as language barriers, payment terms of trade and seeks to tie together the trust gap that exists between Chinese suppliers and the African importers.
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