export projects undertaken by South African contractors, as well as investment insurance in respect of outward investments, shareholder and commercial loans. The Corporation manages the interest make-up portfolio and the foreign exchange risk cover for exporters on behalf of government. The interest make-up scheme is an incentive for local exporters and is structured to boost local contractors by enabling them to be competitive in the capital goods export market.
Thembi Mahaye, ECIC’s Portfolio Manager responsible for the corporation’s business portfolio on projects supported by the corporation says, “In its 13 years of operations, ECIC has more than doubled its business portfolio and its exposure in the African continent has significantly increased, particularly in the mining and minerals sector. “The double expansion of the ECIC’s business portfolio was precipitated by the concentration of the bulk of our projects being in the mining industry in mineral producing countries across the continent, with a key contributor to the expansion owed to US dollar trade dominance on these projects.
“One of the major projects the corporation was involved with is the Lumwana Copper Mine in the Northwestern Province of Zambia. ECIC had underwritten a loan to the value of $87m with a SA content value of over 80% of the contract price. Other projects supported by the ECIC, includes upgrading of the national toll road works in Zimbabwe, where a loan of USD, provided by ECIC sister agency the Development Bank of South Africa, was underwritten. Projects supported by ECIC in Africa accounts for 86% of total exposure of the corporation” says Mahaye. “The impact made by ECIC on the continent supporting infrastructure development projects is enormous. We align the projects we support to the Millennium Development Goals(MDG) with regards to sustainable development, eradication of poverty and access to clean water and sanitation amongst other key objectives of the MDG.
“Most of the projects ECIC is involved with has developmental impact, benefiting local communities with regards to water supply, upgrading of roads and installation of power systems. In most instances, new schools and health facilities are built, giving a major boost to the socio-economic development of the regions where these projects are undertaken,” says Thembi. ECIC’s increased participation on the continent has resulted in phenomenal growth in new commitments and the overall portfolio growth rose to a new record level of R17 billion in the 2012-13 financial year. The projects supported by ECIC will generate a number of sustainable job opportunities in South Africa, as well as in host countries where projects are located, according to Mahaye.
ECIC is also involved in a forum concerned with the development of a National Export Strategy aiming to expand the country’s exporter base and increase diversification, as well as growth of South Africa’s total export basket. ECIC is expected to continue to make a significant contribution to our export growth and play an active role in facilitating access to new markets. Mahaye says the rationale for ECIC is always to deliver on their mandate, which is to facilitate and encourage our export trade by underwriting export credit loans and investments in capital goods and services offshore and at the same time support sustainable development by its local content requirements.
Mahaye says working in the unit implementing policies in compliance with requirements, is a satisfying experience, since it positions them in a place to track how many lives they change with what they do. “We have to educate people every step of the way, but that in itself is making a contribution towards the greater good.”
Economic Contribution to the African Continent
ECIC is contributing to local communities in Africa and most projects benefit the communities in reaching the Millenium Development Goals for 2015
One of ECIC’s goals is eradication of poverty and is being addressed in local areas across the continent
ECIC’s projects reach into local communities by creating and supporting environmental sustainability
SA's Exports and Investments Projects Enabled
With a mandate of facilitating export trade and investment, by providing local foreign investors and exporters of capital goods with political and commercial risk insurance, the Export Credit Insurance Corporation (ECIC) is strategically positioned as catalyst organ for the South African government’s trade and industry developmental plan, aimed at advancing export trade and extending local companies’ footprints into the African market and beyond.
The ECIC was launched in 2001 under the legislation act governing the Export and Foreign Investment Insurance, becoming the first official export credit agency of the South African government. ECIC operates under the legislative mandate apportioned to the Department of Trade and Industry(dti) and oversees underwriting of credit and political risks insurance, associated with capital goods and service
by Ilse Ferreira