Bank of China has finally made its initial arrival in East Africa from initiatives by individual commercial banks to open up special desks to deal with traders going to Asia’s biggest economy.
Bank of China has made its presence felt in the region by partnering with dfcu bank, making it the first partnership of its kind in the region and the third in Africa. As part of this partnership, dfcu bank will upgrade its Chinese desk at Acacia branch to provide a fully-fledged service centre, which will host two Bank of China staff.
This move is expected to boost business and improve banking solutions between Uganda and the world’s second largest economy.
“Previously, a lot of time and money has been lost in complex cross- border transactions and this partnership comes as good news, especially for the many Ugandan businesses with trade interests in China,” said Juma Kisaame, dfcu’s managing director.
The partnership comes with the introduction of the swift RMS (Chinese currency) settlement through an RMS transaction account – with the establishment of a letter of credit (LC) confirmation and guarantee facility. With this, traders can transact business between the two countries without necessarily having to move with cash.
“This means customers can now pay for goods imported from China directly and will avoid exchange rate losses,” said Kisaame.
The partnership, according to Kisaame, will also ease the opening of bank accounts for traders in Uganda and China. It will also facilitate access to trade finance facilities for Chinese businesses in Uganda, offer investment advisory services, and ensure co-financing of viable investment projects in Uganda.
“With the opportunity brought by economic globalization and characterized by increasingly close connections between China’s economy and the world economy, our partnership with Bank of China is an exciting step forward whereupon the two banks are now better placed to facilitate trade and capital flows between China and Uganda,” he said.
Chen Wenyi, the Vice President, Bank of China (Johannesburg office) said: “The benefits of international and cross-border trade depend a lot on good banking and our partnership today reflects our commitment to easeing transactions for both China and Uganda businesses. We believe that this will greatly contribute to the growth of not only businesses but also the economies of both countries,” he said.
According to Wenyi, dfcu has got the best partner in the world, transacting in over 48 countries, with assets, as at end of 2011, standing at $1.87 trillion.
Chinese investments in Uganda have been shooting up so much that in 2010 China ranked second to UK in bilateral business with Uganda. According to Chinese Ambassador to Uganda Zhao Ya Li, bi-lateral trade between Uganda and China has grown from $60.5 million in 2001 to over $400 million last year.
“I strongly believe that the trade between China and Uganda will continuously grow over time,” he said, adding that there are about 265 Chinese companies in Uganda.
Dfcu was established 48 years ago and according to Kisaame, the bank has over 600 employees throughout its 32 branches.