New Delhi, June 10 (KNN) India’s export to Africa has witnesses almost 23 per cent fall due to fall in global commodity prices especially oil and due to fall in their currency. The move has impacted the MSME exporters who are facing problems such as demand slowdown, delayed payments and more.

African countries, which are he suppliers of commodities, and some suppliers of crude, are witnessing huge losses with the prices going down which in turn has led to fall in the currency.

Imports have become costlier now, demand is down and exports by other countries are being hit.

“African countries are basically the suppliers of commodities and few of them are suppliers of crude.  The prices have gone down due all this their currency has also gone down with economy. Imports become costly now; demand has gone down as a result, other countries exports are hitting,” Ajay Shai, Director General, FIEO told KNN.

He said India’s overall import-export is down by about 15 per cent but in context of Africa it is down by 20 per cent.

“Export is around 23 per cent down and import is around 18 per cent down. Exports are getting hit more which was overall down by 15 per cent for the year 2015-16, but in Africa’s context it is down by 23 per cent,” Sahai said.

“We export around 23 per cent to Africa but decline is huge while our exports were doing well for last 3-4 years,” he added.

The exporters are not only facing slow demand from Africa, but are also facing problems like delayed payments.

According to a media report, the government is discussing the possibility of opening an escrow account with countries such as Nigeria, where the exporters will have the first charge on oil dues that are paid to the African country.

Shai said, “It would take time to get revived. The commodity prices would move as crude prices are moving that would reach around 55 dollar per barrel. As a result of this, Nigerian economy will get support. If the commodity prices would move then countries like Angola, Egypt, Algeria, Ethiopia will be benefitted.”

He said that line of credit should be extended by the Government which is seven billion for African countries.   

“If we fix some payment mechanism with these countries like exchange rate which we had done with Iran, but the solution can’t come out so early. We have to wait to see the improvement in their economy and currency. That is the only long term solution for Indian exporters,” he said. (KNN Bureau)