DOES SOUTH AFRICA NEED ITS OWN EXPORT–IMPORT BANK?

The research concludes that South Africa does not need a dedicated state-owned export-import bank because its current trade finance market, comprising both private banks and state entities like the IDC and ECIC, is robust and sufficient. The authors argue that establishing a new ECA would be unfeasible due to severe fiscal constraints and would result in unnecessary market duplication. However, the paper identifies a significant gap in trade finance access for small and medium-sized enterprises (SMEs) and recommends that the IDC and ECIC prioritize streamlined solutions for this sector.

• A dedicated state-owned export-import bank is considered unnecessary and unfeasible for South Africa due to the existence of a fully-fledged trade finance market and the country's current fiscal constraints.
• Small and medium-sized enterprises (SMEs) face significant barriers to accessing trade finance, as they are often rejected by financiers due to high pricing and extensive collateral requirements.
• The Export Credit Insurance Corporation (ECIC) provides commercial and political risk insurance to domestic exporters, specifically targeting emerging markets in Africa to promote regional integration.
• The Industrial Development Corporation (IDC) acts as the lender of last resort in the South African trade finance market, offering a higher risk appetite than private banks for projects in markets like Sudan and Mozambique.
• The South African banking sector is dominated by four major banks—Standard Bank, FirstRand Bank, Nedbank, and ABSA—which control the vast majority of the guarantee and letter-of-credit markets.
• The OECD Agreement, which previously regulated export credit agencies to prevent subsidy wars, is becoming less effective as non-OECD countries, particularly China, implement different rules and aggressive market expansion strategies.
• The implementation of Basel III regulations has constrained the availability of trade finance by imposing tighter capital and liquidity requirements on financial institutions.
• South Africa expanded its trade finance capabilities by becoming a shareholder in the African Export–Import Bank (AfrEXIMbank) in December 2017.

APA

SHIPALANA, P., PRINSLOO, C., & NGIDI, Z. (2018). DOES SOUTH AFRICA NEED ITS OWN EXPORT–IMPORT BANK? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2018/10/Occasional-Paper-289.pdf

Chicago

SHIPALANA, PALESA, CYRIL PRINSLOO, and ZINHLE NGIDI. DOES SOUTH AFRICA NEED ITS OWN EXPORT–IMPORT BANK? South African Institute of International Affairs, 2018. https://saiia.org.za/wp-content/uploads/2018/10/Occasional-Paper-289.pdf.

Wikipedia

{{cite report |last1=SHIPALANA |first1=PALESA |last2=PRINSLOO |first2=CYRIL |last3=NGIDI |first3=ZINHLE |title=DOES SOUTH AFRICA NEED ITS OWN EXPORT–IMPORT BANK? |publisher=South African Institute of International Affairs |date=October 2018 |url=https://saiia.org.za/wp-content/uploads/2018/10/Occasional-Paper-289.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{shipalana2018does, author = {SHIPALANA, PALESA and PRINSLOO, CYRIL and NGIDI, ZINHLE}, title = {{DOES SOUTH AFRICA NEED ITS OWN EXPORT–IMPORT BANK?}}, institution = {South African Institute of International Affairs}, year = {2018}, month = oct, url = {https://saiia.org.za/wp-content/uploads/2018/10/Occasional-Paper-289.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }