Polish companies open up to investments in Africa
P olish entrepreneurs and their foreign counterparts are supported by BGK. Currently, this Polish development bank helps companies in export and foreign expansion in 77 markets, 1/5 of which are African.
“We are following the export and expansion plans of Polish entrepreneurs regardless of the industry or location of the project. We also support foreign trade with very promising countries. This definitely includes African markets,” says Krzysztof Senger, Managing Director of the International Business and Cooperation Division at Bank Gospodarstwa Krajowego.
Africa is a huge continent with more than 1.2 billion people. On one hand, some of the local economies are among the fastest growing in the world. On the other, for many Polish entrepreneurs, this area is still unexplored. Africa’s share in the total export of Polish goods is just over 1 per cent.
“We should strive for Africa to be an increasingly attractive market among Polish exporters and for Polish exports to grow in this direction. In order to achieve this, we need to promote the recognition of Polish companies on this market. Now that the war and the pandemic have broken some supply chains, it is time to redefine trade relations. For our exporters, this is an opportunity to reach previously unavailable markets with their products,” emphasises Krzysztof Senger.
Bank Gospodarstwa Krajowego has many financial products that allow Polish companies to establish business relations with partners from Africa. One such solution is the purchase of receivables insured by the Export Credit Insurance Corporation (ECC). BGK assumes the risk of non-payment by the counterparty from the exporter. The Bank transfers these funds directly into the account of the Polish exporter. In subsequent years, BGK will receive repayments from the importer.
Another solution that increases transaction settlement security is a letter of credit. It allows the Polish exporter to receive funds for goods sent to Africa not from the importer, but directly from the bank. BGK also provides loans to the buyer in the sovereign finance structure, where the borrower is the government of the country in question.
BGK has completed 102 export transactions in Africa to date with a total value in recent years of almost PLN 160 million. Polish entrepreneurs, supported by BGK, have so far implemented contracts in countries such as Angola, Chad, Côte d’Ivoire, Egypt, Ethiopia, Kenya, Libya, Mali, Mauritania, Morocco, Nigeria, Senegal, South Africa, Tanzania and Tunisia.
“The most important industries for exporters cooperating with BGK include, among others, automotive, specialist, agricultural and food industries. In Kenya, for example, hospital software or telemedicine are very popular. In Senegal, there is talk of great opportunities for the sale of spare parts for passenger cars and trucks. Moreover, due to the climate, Africa is an ideal location for food production. The industry related to the storage of agri-food products is also promising. Investments by Polish entrepreneurs can therefore also be carried out in the spirit of sustainable development,” says Krzysztof Senger.
The diversity of countries located on the second largest continent in the world allows Polish companies to find a niche for themselves more easily. There are many indications that the best times for economic cooperation between Poland and African countries are still ahead of us.
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