How Do I Get Paid (Methods of Payment)
While traditional trade finance instruments such as letters of credit, collections, and funds transfer are available to the exporter, the associated fees are high compared to other regions’. If a letter of credit is chosen, the exporter should require an irrevocable, confirmed letter of credit to ensure prompt, reliable payment.
The United State Department of Agriculture's (USDA) West Africa Regional GSM-102 Credit Guarantee Program provides access to financing for imports of agricultural products. The payment guarantee to the U.S. exporter is for a minimum of 90 days and a maximum of one year. The GSM-102 program is generally available only to high quality importers with a good credit history and substantial assets with the guarantor bank. In addition, USDA' regional Supplier Credit Guarantee Program offers a 65 percent guarantee for credit extended directly from a U.S. exporter to an importer.
How Does the Banking System Operate
Côte d’Ivoire is a member of the Communaute Financiere Africaine, a financial grouping of Francophone African countries. Within that grouping, it belongs to the West African Monetary and Economic Union (WAEMU). The Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO), located in Dakar, is the central bank for WAEMU members. The currency issued by the BCEAO, the CFA Franc, is convertible against the Euro and is pegged at 655.956 CFAF to one Euro.
There are around 15 commercial banks in operation in Côte d’Ivoire. Selected banks with their U.S. (or other foreign) correspondent banks are listed in Section 6 below. There is a regional stock exchange, over 30 insurance companies, and the African Development Bank is headquartered in Tunis, with a small local staff remaining in Abidjan. The World Bank and the International Finance Corporation also maintain regional offices.
Banking supervision for the WAEMU countries is the responsibility of the Banking Commission, headquartered in Abidjan. The Governor of the regional central bank, the BCEAO, also serves as Chairman of the Banking Commission. The Commission also includes representatives of each member state and France, and eight independent members appointed by the member states. Although current capital requirements are lower than the international standard set by the Bank for International Settlements, the Banking Commission has exercised vigilance over the banking sector.
Foreign-Exchange Controls
The Directorate of External Finance and Credit administers exchange controls within Côte d’Ivoire. According to Ivoirian law, authorized banks or the Postal Administration must handle all exchange transactions relating to foreign countries. If an imported item has a value in excess of CFAF 500,000 (CFAF 500 equals approximately 1 USD) the transaction must involve an Ivoirian bank. Transactions involving goods valued at less than this amount must be handled by an authorized Ivoirian bank if a financial transaction is to be undertaken before customs clearance. Import attestations allow importers to purchase any necessary foreign exchange, but no earlier than eight days before the scheduled shipment of the goods. All foreign exchange to be used for import payment must be purchased either on the date of settlement specified in the commercial contract, or at the time when the required down payment is made.
Euro-based transactions are the easiest and most practiced. Dollar-based transactions may take longer. The fees associated with processing exchange transactions are high and vary slightly between banks. Proof of an importing transaction is required to remit payments for imports denominated in other currencies.
U.S. Banks and Local Correspondent Banks
Local Affiliate /Parent Company
SGBCI / Société Générale (SocGen)
BIAO / Credit Commercial de France (CCF)
BICICI / BNP Paribas
SIB / Credit Lyonnais
Citibank/ Citibank
HSBC Equator Bank/ HSBC Group (Merchant banking, no retail operations in Côte d'Ivoire)
Standard Chartered Bank /Standard Chartered
Local Correspondent Bank U.S. or Other Bank
BHCI / None
Ecobank / JP Morgan Chase and Bankers Trust
Bank of Africa / None
COBACI / Bank of Tokyo Mitsubishi, New York
One can cash his/her credit card (VISA) at the following banks: BICICI, SGBCI and COBACI. Standard Chartered provides ATM services with Visa network. There are is no limit on purchasing CFAF.
Project Financing
Commercial lenders tend to rely more on collateral than on prospective income and cash flow. Financing is generally available for short-term, (one year or less) private sector projects. Interest rates were kept high following the devaluation in an effort to control its inflationary impact. Since the devaluation, capital flight has returned, the liquidity within the system has increased substantially, and inflation has been on a declining trend. All these factors have led to single-digit interest rates, for the first time in years. Banks continue, however, to extend credit only to a limited group of borrowers--mostly large companies--who are deemed good credit risks. The current lending rate ranges from 15 to 17 percent. Medium to long-term infrastructure projects even when privatized are often financed by multilateral lending institutions such as the World Bank or the African Development Bank or by European foreign aid programs, rather than by commercial banks. Cote d'Ivoire has been in non-accrual status with the World Bank since late 2004. The IMF has also suspended payments to Cote d'Ivoire
EXIM Bank financing is available for short-, medium-, and long-term private sector transactions. EXIM Bank’s Direct Loan Program offers foreign buyers medium and long-term loans for up to 85 percent of the contract price at fixed interest rates for the purchase of U.S. capital equipment. EXIM is still open in Côte d'Ivoire for the private sector.
For private sector projects, the Overseas Private Investment Corporation (OPIC), a Washington-based U.S. Government agency, offers U.S. investor financing and insurance programs. OPIC’s programs include loans, loan guarantees and insurance products. The U.S. Trade and Development Agency offers funds to finance feasibility studies for large projects that have the potential for using significant amounts of U.S. exports. Following the December 24, 1999 coup d'etat, both TDA and OPIC suspended their programs in Côte d'Ivoire pending the installation of a democratically elected government.
The African Development Bank offer loans to finance Ivoirian Government-sponsored procurement. The AfDB's Private Sector Department offers debt and equity capital for private sector investments in Côte d'Ivoire and throughout Africa. Currently, the AfDB is not considering private sector projects in Cote d'Ivoire.