Jakarta – Africa has a huge potential of becoming a destination for Indonesia's manufacturing exports, according to the Indonesian Chamber of Commerce and Industry or Kadin.
Indonesia can start with Africa before tapping its traditional markets such as the US, European Union (EU), or China. Although its purchasing power still falls behind other traditional export markets, Africa is also promising in terms of market size growth and trade competition. Not many exporters have entered the African market, and the continent's trade barriers are not as sophisticated.
"Indonesian exports can enter and compete in Africa, particularly manufacturing products as African countries generally lack basic manufacture like the countries in our region. This makes it easier for our manufacturing industry exports to enter the market," Shinta W Kamdani, the Kadin deputy chairwoman for maritime, investment, and international relations said in a statement.
Kadin also reported that Indonesian exports with Egypt, South Africa, Mozambique, and Kenya are also on the rise.
"We are hoping for government support to facilitate this. So more Indonesian businesses and exporters can expand to alternative markets like Africa, in addition to creating a preferential trade agreement with potential African countries," Shinta said.
Silvano Rumantir, the director for corporate and international banking at BNI, said Indonesia's export potential to Africa totals $8.16 billion, with about $4.56 billion still remaining untapped.
Indonesia's exports to Africa with high competitiveness encompass palm products, soap, coffee, motor vehicles, pipes, sauces, paper and rubber products, etc.
According to Silvano, BNI is also helping Indonesian businesses to penetrate the African market.
To this end, BNI is offering corporate and commercial clients export-import financing, working loans for micro, small, and medium enterprises (MSMEs), investment credit, supply chain financing, fast track, as well as co-financing with LPEI and PPI guarantees.
"We will try to bring added value to strengthen the economic ties between Indonesia and Africa," Silvano said.
There are also non-cash loan facilities such as letters of credit and standby letters of credit to facilitate Indonesian companies who wish to invest in Africa via 21 BNI correspondent banks spread across 9 African countries.
The bank is also helping spur business expansion, business matching, mentorship, and financing for local MSMEs with its flagship BNI Xpora program.
"Like our other business activities, we will also continue to embrace prudent banking principles when serving this African market potential to safeguard healthy and sustainable growth," Silvano said.