African Export–Import Bank

• President Xi Jinping launched it in 2013 with a first speech in Kazakhstan and a second one in Indonesia.
• The Kazakhstan speech outlined five elements of the “Belt”: strengthening policy communication; road connectivity; currency circulation; people-to-people ties; and promoting unimpeded trade.
• As an economist with a keen interest in the political economy of China-Africa relations, I have studied the Belt and Road Initiative since its inception.
• Much is made of a fall in spending on the Belt and Road Initiative.
• Xi’s announcement at this year’s forum offered old and new news for the Belt and Road Initiative and its signatories.

Comparing promises 10 years on

Xi made eight major commitments at the October 2023 forum. More than half of these draw directly from the policy focus areas announced a decade ago.
Xi promised to build a multidimensional Belt and Road connectivity. He referred to roads, rail, port and air transport and related logistics and trade corridors.
He promised to open China’s economy more to the world. Higher trade levels would be one way. Alongside a new emphasis on the digital economy, Xi added that China would establish pilot zones for e-commerce-based cooperation. In Africa, a guide to those may be provided by the two existing digital commerce hubs set up by Alibaba in Ethiopia and Rwanda under its electronic World Trade Platform Initiative.
He spoke of “practical cooperation”. This seems to refer to financing for expensive infrastructure projects, smaller livelihood projects and technical and vocational training. This has an aspect of crossover with currency circulation, people-to-people ties, unimpeded trade and more.
Xi’s recent speech also promised to support people-to-people exchanges. This is a direct take from the first launch speech of 2013. But he added detail about establishing arts and culture alliances. Also that China would host a “Liangzhu Forum” to enhance dialogue on civilisation.
Finally, in line with the earlier commitment to elevated policy dialogue, Xi promised to strengthen institutional building for international Belt and Road Initiative cooperation. This relates to building platforms for cooperation in energy, taxation, finance, green development, disaster reduction, anti-corruption, think-tanks, media, culture, and other fields.

• Beyond the promises made in Xi’s speech to this year’s forum, elevated funding for China’s policy banks was announced.
• Further, agreements made between participants also signal commitment to the original principles of the Belt and Road Initiative.

New promises

There are three new policy promises added to those of a decade ago.
China will promote green development, including green infrastructure, green energy, and green transportation. It will hold a Belt and Road Initiative Green Innovation Conference and establish a network of experts. China also promised to provide 100,000 training opportunities in areas of green development.
China will continue to advance scientific and technological innovation. It will hold a conference on Science and Technology Exchange, and increase the number of joint laboratories that support exchange and training for young scientists. Xi also promised that China would propose a Global Initiative for Artificial Intelligence Governance, and promote secure artificial intelligence development.
China will promote integrity-based cooperation. This would include publishing details of Belt and Road achievements and prospects, and establishing a system of evaluating compliance.
These new areas are of increasing economic importance to China, amid rapid population ageing especially, and competition with high-income countries.

The future

• There was more detail especially on people-to-people ties and on areas of policy dialogue to be fostered.
• He added some new areas such as artificial intelligence governance, green development, e-commerce, and greater emphasis on scientific and tech cooperation.
• Comparing the new policy signals with the earlier ones implies that the initiative is by design adaptable.

Lauren Johnston does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

• The government implemented a ‘Graduate Finance’ Project with ECD$15,000 credit for students with loans at the Development Bank and other banks.
• The government was able to reinstate its Gratuity payouts for retired Government Auxiliary Employees (CAE) with a minimum of 10 years of service.
• St Kitts and Nevis’ economy ricocheted in the last year with significant growth in the agriculture, financial services, and tourism sectors.
• The Government of St Kitts and Nevis' vision is to evolve the country into a Sustainable Island State by focusing its governance on integrity, transparency, and accountability.

• Credit rating agencies are institutions that assess a borrower’s creditworthiness in general terms, or with respect to a particular debt or financial obligation.
• A credit rating can be assigned to any entity that seeks to borrow money – an individual, a corporation, a state or provincial authority, or a sovereign government.
• Conditions are therefore ripe to advance the idea of establishing an African credit rating agency as a partial solution.
• China has its own state-owned rating agency, Dagong Global Credit Rating Company.

African Union official decisions

• In March 2019, African Union (AU) ministers of finance and economy officially adopted a declaration that such an institution was needed.
• The need for an African Rating agency has been reiterated by the current Chair of the AU, President Macky Sall of Senegal, and the Champion of the AU financial institutions, President Nana Akufo-Addo of Ghana.

Institutional model

When the AU establishes a new institution, it can be either:
• As a financing structure, the agency would adopt the “issuer-pay” business model.
• Multilateral development banks would either encourage or make it mandatory for their clients to have a rating from the African rating agency.
• As is the process in the AU, the African rating agency would be established through an agreement, signed by at least 10 member states.

The business case

• This will be a clear niche for the AU rating agency.
• There is also tremendous value in the alternative rating sector, which cannot afford the cost of maintaining a rating from the “big three”.
• With the backing that comes from affiliation to the AU, the rating agency could secure substantial business in the ratings of domestic instruments that are aligned with the continent’s goals.

Way forward

• Although it will have to overcome challenges to gain investors’ support, there is a huge appetite for an alternative and complementary credit rating institution in Africa.
• Its success will be in developing a comprehensive methodology adapted to the African context, and resident analysts that understand the continent’s dynamics.

• WTCA connected business leaders and B2B delegates leading to tangible business opportunities throughout Ghana and Africa, leveraging its core strength as a business enabler
  NEW YORK, May 11, 2023 /PRNewswire/ -- The World Trade Centers Association® (WTCA®) — an international trade organization connecting more than 300 World Trade Center® (WTC®) locations in nearly 100 countries —and World Trade Center (WTC) Accra have successfully concluded the 53rd annual WTCA General Assembly (GA) in Accra, Ghana.
• Themed "Towards African Economic Integration and Enhanced Global Presence," the event built on the WTCA's ongoing commitment to Africa.
• "With the outlook of demographic growth to double in the next 25 years, the opportunities are there in Africa.
• The 54th annual WTCA GA is scheduled to take place in Bengaluru, India from March 3-6, 2024, and will be hosted by World Trade Center (WTC) Bengaluru.