U.S. DEPARTMENT OF AGRICULTURE (USDA) FOREIGN AGRICULTURAL SERVICE (FAS) GSM-102 EXPORT CREDIT GUARANTEE PROGRAM Doing Business in Africa – Global Trade Forum November 18, 2013 Michele Kennedy-Kouadio Office of Trade Programs Credit Programs

TRADE PROGRAMS FAS works to improve foreign market access, FOREIGN AGRICULTURAL SERVICE (FAS) http://www.fas.usda.gov Lead international agency in the United States Department of Agriculture (USDA)— Represents a network of USDA agencies and private companies through its partnership with U.S. Cooperator Groups FAS OVERSEAS ATTACHES,COUNSELORS, AND TRADE OFFICES http://www.fas.usda.gov/ofso/overseas_post_directory/ovs_directory_search.asp Point of contact for overseas banks, importers, and governments in overseas markets desiring information about GSM-102 or other programs that help with importation of U.S. agricultural products into their countries TRADE ASSOCIATE REPRESENTATIVES http://www.fas.usda.gov/pcd/PartnersSearch.aspx By products such as U.S. Wheat Or regional such as SUSTA U.S. GOVERNMENT AGENCIES THAT PARTNER UNDER THE NATIONAL EXPORT INITIATIVE (NEI) U.S. Export Import Bank, Overseas Private Investment Corporation, U.S. Small Business Administration/Office of International Trade, U.S. Department of Commerce, U.S. Department of Agriculture, U.S. Agency for International Development’s Development Credit Authority FAS works to improve foreign market access, build new markets and improve the competitive position of U.S. agriculture in the global marketplace

GSM-102 CREDIT GUARANTEE PROGRAM Facilitates export financing of U.S. agricultural products by guaranteeing repayment to U.S. banks (or exporters) that extend credit terms to USDA approved banks in the Africa Middle East (AME) region. http://www.fas.usda.gov/excredits/foreignbanks.html Buyers of U.S. agricultural products in the AME region seek financing opportunities under GSM-102 when banks in the AME region are reluctant to lend Importers can seek terms through USDA approved banks in the AME region, even when the shipment destination country is not the same as the location of the bank opening the L/C. Not all countries in the AME region are eligible to have banks approved. http://www.fas.usda.gov/excredits/countryrisk.html

BANKS: CREDIT TERMS UNDER GSM-102 USDA approved banks in the AME must open an L/C in favor of the exporter of the U.S. agricultural product The U.S. bank may or may not confirm the L/C as confirmation is not required under the program U.S. bank will negotiate credit terms with the foreign bank in the AME region according to parameters of the GSM-102 program Tenor extended to the USDA approved bank in Africa will be limited according to the risk grade of the country where the bank resides http://www.fas.usda.gov/excredits/countryrisk.html The cost of the program is the fee paid by the exporter to USDA http://www.fas.usda.gov/excredits/gsm102fees.html

SUCCESS: ALL GSM-102 PARTICIPANTS BENEFIT May help importer obtain attractive loan terms with the USDA approved foreign bank USDA approved foreign bank receives a dollar trade credit on attractive terms from the GSM-102 guarantee holder (U.S. bank typically) Reduces risk to the U.S. bank (or exporter) Helps exporter of U.S. agricultural products enter new growth markets in the AME region

IMPORTERS: STEPS TO PARTICIPATE Learn about the details of participating in GSM-102 through the USDA representative that covers your country Find an exporter of the U.S. desired agricultural commodity Enter into a firm sales contract with the exporter Negotiate loan terms under GSM-102 with a USDA approved bank who is willing to open an L/C Ask the exporter to register the export sale contract under the GSM-102 program The exporter will provide a copy of the sales contract to USDA if required The U.S. exporter must pay the GSM-102 fee before shipment of your goods and before a GSM-102 guarantee is issued Note: As GSM-102 does not cover the risk of the AME bank opening the L/C, the bank is likely to review the importer’s company financials and cash flow to cover any risk the bank may assume—

FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEE Based On Tenor (Between Banks), Risk Grade Of Country Where Bank Is Located, Amount Of Sales Contract Covered Under GSM-102, and Repayment Intervals GSM-102 (Premium per $100 USD of GSM-102 coverage) Semi-Annual Payment of Principal   Risk Category Tenor 1 2 3 4 5 6 90 Days $0.182 $0.186 $0.196 $0.257 $0.343 $0.463 $0.614 4 Months $0.211 $0.215 $0.227 $0.296 $0.398 $0.535 $0.716 6 Months $0.236 $0.241 $0.254 $0.332 $0.445 $0.599 $0.796 9 Months $0.323 $0.330 $0.347 $0.453 $0.608 $0.819 $1.088 12 Months $0.350 $0.357 $0.376 $0.491 $0.659 $0.887 $1.178 15 Months $0.492 $0.503 $0.529 $0.691 $0.928 $1.248 $1.658 18 Months $0.561 $0.574 $0.604 $0.789 $1.058 $1.424 $1.892 24 Months $0.686 $0.700 $0.737 $0.963 $1.293 $1.738 $2.310

FEE PAID BY EXPORTER TO USDA FOR GSM-102 GUARANTEE Based On Tenor (Between Banks), Risk Grade Of Country Where Bank Is Located, Amount Of Sales Contract Covered Under GSM-102, and Repayment Intervals GSM-102 (Premium per $100 USD of GSM-102 coverage) Annual Payment of Principal   Risk Category Tenor 1 2 3 4 5 6 9 Months $0.435 $0.445 $0.468 $0.611 $0.821 $1.104 $1.468 12 Months $0.464 $0.474 $0.499 $0.652 $0.875 $1.177 $1.564 15 Months $0.602 $0.616 $0.648 $0.846 $1.136 $1.528 $2.030 18 Months $0.667 $0.682 $0.717 $0.937 $1.258 $1.692 $2.248 24 Months $0.851 $0.869 $0.915 $1.195 $1.604 $2.157 $2.866

AME BANK PARTICIPATION Importer of U.S. goods will seek loan terms from the AME bank As the terms extended under GSM-102 to the AME bank occur because the importer is buying U.S. agricultural products The AME bank benefitting from the trade credit, will likely be encouraged to extend loan terms to the importer Your bank may receive up to two years (varies by location of the bank in country) in repayment terms to the U.S. bank The loan you extend to the importer is not guaranteed under GSM-102, and USDA is not involved in the terms between the foreign bank and the importer Read about details of the GSM-102 program http://www.fas.usda.gov/excredits/reg.asp Contact Credit Program Division Representative for Details - Michele.Kouadio@fas.usda.gov Discuss possible terms that could be negotiated with your U.S. correspondent banks under GSM-102 Look at the guidelines to apply for review and approval under the GSM-102 http://www.fas.usda.gov/excredits/foreignbankreq.html Your bank must have a location in an AME bank eligible country

Global Usage FY 2011 – 2012 (in USD millions) GSM-102 $ USD Millions +Eurasia Region discontinued in 2012 10

AME REGION 10/1 thru 9/30 Shipping Location Announced ($mil) Registered ($mil) Bank Used in the AME Agricultural Products 2011 Egypt, Morocco, Saudi Arabia, Nigeria, Guinea Bissau, Iraq, Ghana $350 $239 Africa Export Import Bank (Multilateral Egypt) , Mashreqbank (UAE), Investec (South Africa), Soybean Meal Soybean Oil Wheat Yellow Corn 2012 Angola, Egypt, Ghana, Morocco, Saudi Arabia, Tunisia $400 $246 * * reflects cancellations Afrexim Mashreqbank Investec Mauritius Commercial Bank Poultry, Soybeans, Rice, Soybean Oil, Wheat, Yellow Corn, Soybean Meal 2013 Angola, Egypt, Ghana, Libya, Nigeria, Tunisia $475 $173 Mauritius Commercial Bank, Africa Export Import Bank, Investec, Mashreqbank Poultry, Soybeans, Soybean Meal, Wheat, Soybean Oil, Rice, Yellow Corn

U.S. MARKETS – Leading Regional Markets: Sub Saharan Africa ranks 12th North Africa ranks 14th BICO Report through June 2013 SubSaharan Africa (BICO – June 2013) Top U.S. Markets – Not in Rank order Ghana Ethiopia South Africa Angola Kenya Liberia Cameroon Gabon Nigeria

SubSaharan African Top U. S SubSaharan African Top U.S. Markets by Commodity Category (Tons) BICO Report Oct-Dec 2012 Country Consumer Oriented Intermediate Bulk Nigeria 12,347 5,505 193,475 Ethiopia 1,017 149 50,470 Angola 65,938 1,902 2,522 Ghana 53,087 4,497 41,085 Kenya 3,363 13,350 23,885 Cameroon 440 2,238 23,786 Gabon 18,948 202 130 South Africa 12,931 10,545 21,549 Congo Brazzaville 13,945 52.9 Kinshasa 11,624 21.2 2.8

PRODUCTS COVERED Must be U.S. origin Bulk commodities (wheat, feed grains, soybeans, rice) Intermediate products (oilseed meals, flour, hides, genetics, seeds, saplings) Consumer-oriented products (meat, fruits, vegetables, grocery products) Fiber: cotton and wool, including fabric and yarns Forest Products: Wood and wood products --GSM-102 covers many different types of agricultural products – everything from bulk commodities to consumer-ready frozen foods FYI - Approximate percentages of commodity types under GSM-102 (for FY 2008 and 2009 to date): --Feed grains = 31% --Meats and products (beef, poultry, pork) = 20% --Oilseeds = 13% --Wheat = 12% --Protein meals = 10% --Cotton = 4% These account for about 90% of total activity. Remaining 10% consists of wood/wood products, rice, tallow, vegetable oils, etc. http://www.fas.usda.gov/excredits/gsmcommodities.html

ELIGIBLE COUNTRIES AFRICA AND MIDDLE EAST REGION Participating Countries Can Receive Shipments; and *Some are also Eligible to Have Banks Approved: Afghanistan, Algeria*, Angola*, Bahrain*, Benin, Botswana*, Burkina Faso*, Burundi, Cameroon*, Cape Verde*, Central African Republic, Chad, Comoros, Cote d’Ivoire, Democratic Republic of the Congo, Djibouti, Egypt*, Equatorial Guinea, Eritrea, Ethiopia, Gabon*, Gambia, Ghana*, Guinea, Guinea-Bissau, Iraq, Israel*, Jordan*, Kenya*, Kuwait*, Lebanon*, Lesotho*, Liberia, Libya, Madagascar, Malawi*, Mali, Mauritania, Mauritius*, Morocco*, Mozambique*, Namibia*, Niger, Nigeria*, Oman *, Pakistan, Qatar*, Republic of the Congo, Republic of South Sudan, Rwanda, Saudi Arabia*, Senegal*, Seychelles, Sierra Leone, South Africa*, Swaziland*, Tanzania*, Togo, Tunisia*, Uganda*, United Arab Emirates*, West Bank/Gaza, Yemen, Zambia* and Zimbabwe.  * USDA has determined that the following countries in this region are eligible to have banks approved (as of August 7, 2013):

ELIGIBLE BANKS Check Website Routinely for Additions/Deletions Eastern and Southern African Trade and Development Bank (PTA Bank), Burundi/Kenya (Multilateral) African Export-Import Bank (Afrexim), Egypt (Multilateral) Byblos Bank S.A.L., Lebanon The Mauritius Commercial Bank Ltd., Mauritius Attijariwafa Bank, Morocco BMCE Bank, Morocco Investec Bank Limited, South Africa Nedbank Limited, South Africa Abu Dhabi Commercial Bank PJSC, United Arab Emirates Credit Europe Bank (Dubai) Ltd., United Arab Emirates Mashreqbank PSC, United Arab Emirates National Bank of Ras Al-Khaimah PSC (Rakbank), United Arab Emirates Check Website Routinely for Additions/Deletions Banks interested in becoming approved by CCC should visit the link below for more information. http://www.fas.usda.gov/excredits/foreignbanks.html

USDA REPRESENTATIVES IN AFRICA ETHIOPIA – American Embassy, Addis Ababa Quintin Gray, Counselor agaddisababa@fas.usda.gov Covers African Union, Djibouti, Eritrea, Somalia, South Sudan, Yemen KENYA – American Embassy, Nairobi Kate Snipes, Counselor agnairobi@usda.gov Covers Burundi, Malawi, Rwanda, Tanzania, Uganda, Zambia NIGERIA – U.S. Consulate General, Lagos Russell Nicely, Counselor aglagos@fas.usda.gov Covers Benin, Cameroon, Ghana, Liberia SENEG AL – American Embassy, Dakar Joani Dong, Attache agdakar@fas.usda.gov Covers: Burkina Faso, Cote d’Ivoire, Mali, Niger, The Gambia SOUTH AFRICA – 877 Pretorius Street, Pretoria Eric Wenberg, Minister Counselor Corey Pickelsimer, Senior Attache Nicolas Rubio, Attache agpretoria@fas.usda.gov Covers: Angola, Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Swaziland, Zimbabwe

OFFICE OF TRADE PROGRAMS CREDIT PROGRAMS DIVISION GSM-102 Export Credit Guarantee Program Africa and the Middle East Business Development and Planning Michele.Kouadio@fas.usda.gov