BECI launches Medium and Long Term Export Credit Insurance – Cover will enable Botswana companies to tender in other countries
“Up until now, Government support for medium and long-term export credit was not available in our country. Government has since realized the importance of this product and is moving to providing hundred percent reinsurance cover to BECI. This will now enable BECI to underwrite export credit finance for periods of more than and[RR1] in turn enable our entrepreneurs and project promoters to pursue projects of a capital nature outside Botswana and/or participate in supplying items to such projects. “These words were being addressed to the media by the Assistant Minister of Investment, Trade and Industry Honorable Karabo Socraat Gare during the launch of the BECI Medium and Long Term Export Credit Insurance Product.
The new Medium and Long Term Export Credit Insurance Product allows Botswana enterprises to expand their businesses and upscale their production and services beyond the borders of Botswana. This will also enable Botswana enterprises to tender for projects or even participate in projects in other countries. The cover enables Botswana contractors to offer extended payment terms to foreign buyers and facilitates bank finance for export credit loans. This will eventually establish Botswana as a new consideration and home base for international enterprises and entrepreneurs thus creating and enabling an environment for a capital goods and projects capability.
Unbeknown to most, Export credit insurance has been the domain of state-owned enterprises for the past hundred years. Governments who do not offer export credit support to their companies, place their exporters at a great disadvantage. It is for this purpose that BECI was established in the mid-nineties to offer short term export credit insurance, which applies to exports of commodities and merchandise which are normally paid for within a credit period of six months.
Assistant Minister Gare advised BECI and entrepreneurs alike that “BECI needs to implement and maintain state of the art underwriting tools, risk mitigation and pricing methodologies. On the other hand, enterprises and suppliers need to produce and deliver the appropriate products and inputs on time and according to specifications. I urge the Business community to utilise this project and create employment for our youth. This should be possible because our Government has Trade Agreements that can be fully utilised.”
The General Manager of BECI Mr Cowell Habana concurred with the Assistant Minister`s sentiments when he said, “The status of our exports is no doubt distressed. We all need to do more so as to create a positive sustainable balance of payments and address the projected budget deficits. The clarion call is loud and clear. The time is now to act and as BECI we take on the challenge by supporting governments efforts through the stimulus instrument we are launching today.”
Mr Habana did not mince his words when he emphatically stated with confidence that his team was ready to implement these new products which without a doubt are game changers in the financing and insurance solutions value chain.
“Specimen policies such an MLT Export Contractor Policy, a MLT Financial Credit Cover Policy, and an OII Policy are all in place already. Apart from that a Country Assessment Methodology, a Commercial Risk Assessment Methodology, an Exposure Limit Methodology, and a Pricing Methodology are also in place. A seamless integration of the new products into BECI has been designed and we are ready to implement as we play our role in driving the ideals of Vision 2036 in pursuit of elevating Botswana to a High Income status country.” He said.
It is without a doubt this new product will be met with enthusiasm by local entrepreneurs, suppliers and regional dealers as this product comes at a time Botswana is looking to increase foreign investment and exports to the region and the world. In some countries around us, sovereign credit ratings have plummeted. Due to good governance, Botswana stands out as a beacon of stability, offering entrepreneurs, banks and investors the highest rated sovereign cover and protection available on the continent. A company or investor can expand into Africa and elsewhere whilst protected by this new product. The General Manager concluded by saying that, “BECI has always and shall continue to play an important role in the Export Development and Promotion.” The MLT BECI Cover is effective immediately.