To improve on infrastructural development as  well as reduce capital flight, Chairman/GCEO of Oilserv Group, Engr. Emeka Okwuosa, CON, has  called on the African Export-Import Bank (Afriximbank) to increase financial support for African companies providing Engineering, Procurement and Construction (EPC).

He made the call while speaking on a panel session at the Intra- African Trade Fair (IATF) 2023 Trade Conference, which held in Cairo, Egypt, with the theme ‘The Challenges, opportunities and solutions for African EPCs- Perspective of the EPCs.’

Okwuosa noted that having to low interest funds would reposition   African companies and empower them  to compete favourably at the global level.

According to him, until African EPC companies  are able to access more funds, Africa will not be able to compete.

“When we talk about finance and funding, for us, in the oil and gas sector, we have a success story of the ongoing construction of the AKK pipeline at $2.4billion,” Okwuosa

“The issue of funding is not about access, but cost of the funds. Most Africa countries are not in position to access funding in a way to be able to compete in terms of cost of the funds relatively compared to the Chinese companies.

This is because, if you are bidding for an EPC contract and the cost, apart from your ability to execute in terms of your technical capacity, the cost enables you to win and executive the project profitably.

“Competing with the European, Chinese companies is quite difficult because at the end of the day the margin of an African companies does not come close to competing with the financial muscles of the Chinese which often than not does not build indigenous capacity but rather giving way to capital flight which are repatriated to develop their countries rather than injecting such in Africa.

“I believe, the AfreximBank should step up and create more access to funding for African EPC companies, and at a good rate because that is the only avenue capacity can be built. Also, we are looking at Afreximbank to solve problems and there are ways to go about it.

“When we talk about financing, from placement of guarantee for a project of a billion dollars project, the Chinese would present less than the budget becauseits been backed up by their government. Afreximbank can leverage on its position of strength and be able to work with other financial institutions across African countries like the NEXIM banks of these countries.

“I will take into account of the African Continental Trade Agreement and I’m sure there are some protocols that can be taken into account for a better synergy to be able to provide the basis for a more competitive financial system for such projects by Africans which will make a lot of difference.

“However, when you talk about Chinese and others coming in to run a project, they come in with finance at a cheap rate. However, this funds are been met with difficult conditions and part of which would be that minimum involvement of local content to provide finance for labour, materials and equipment. If Afreximbank can take up the challenge, the value system will be improved.

“Another challenge is the ease of moving labour across Africa as well as building up of local content. When we tackle this challenges very well,  capacity will be built. The ease of moving labour in Africa is very poor. For instance, Nigeria has, to a greater extent grown capacity but the ease of navigating this capacity across Africa is not too welcoming and seems impossible. This should not be so as we can grow capacity of African for Africa development,” he stated.