MUSCAT, 11 March 2008 — Oman’s Export Credit Guarantee Agency (ECGA) reported a 13.7 percent increase in the total credit limits issued to Omani exporters, which amounted to 236.7 million Omani rials in 2007 from 208.2 million rials a year earlier. The total business declared by exporters in 2007 was 123.3 million rials compared to 86.1 million rials in 2006, representing an increase of 43.4 percent.
In all, 4,363 buyers in 98 countries worldwide were covered by the credit limits extended by the ECGA. The domestic credit insurance business also witnessed similar strong growth as credit limits issued for such coverage increased by over 40.1 percent.
“As the ECGA actively continues to meet the credit-insurance needs of Omani non-oil exports its level of commitments and exposure against both commercial and non-commercial risks has been rising,” said Nasir ibn Issa Al-Ismaily, ECGA general manager.
“In order to safeguard against such growing risks, the ECGA renewed its re-insurance coverage with the international private re-insurance market. This was made possible due to the encouraging underwriting results and experiences of ECGA as viewed by the international credit risk re-insurers. Such renewal would further enhance the ability of ECGA to meet its growing credit insurance commitments by extending its cover to increasing number of Omani exporters while mitigating such credit risks,” he said.
According to a recent issue of International Trade Finance Magazine, Oman’s payment and collection experiences of its local buyers compare favorably among the GCC countries.
The domestic credit policy issued by ECGA covers protracted default as well as insolvency of the local buyers which the Export Credit Insurance Policy covers both commercial as well as noncommercial risks. The increase in the volume of insured export business matched the substantial growth in Omani non-oil exports, which has not only continued to grow year after year but during 2006-2007, it exceeded the level of non-oil re-exports.
“It is encouraging that as per the latest available trade statistics issued by the Ministry of National Economy, the level of the Omani non-oil exports, excluding re-exports for the first nine months of 2007, has increased by 67.8 percent to 866 million rials compared to 516.2 million rials for the corresponding period in 2006,” said Al-Ismaily.
Meanwhile, the ECGA’s news bulletin for the first quarter of 2008 refers to the recent Coface Country Risks Conference that was held in Paris recently.
The conference assessed the developments of the past year and also examined the US sub-prime lending crisis and its impact on the international financial markets as well as the assessment of country and sector risks and business climate ratings of various countries, including those countries in the Middle East/North Africa Region. The bulletin also highlighted the growth in trade volumes between Oman and Ethiopia. According to the bulletin, Oman maintained a consistent trade surplus with Ethiopia over the past five years, although the trend was erratic.
Even though the value of Omani exports to Ethiopia is low, it has experienced significant growth of more than 122 percent in 2006 compared to 2005 as more Omani exporters are interested in selling their products to that country, a report said. Another article entitled “The Scope of Credit Insurance Support” discusses the extent of credit insurance support and commitments by the ECGA to non-GCC markets vis-à-vis GCC markets in view of the growing number of exporters selling to such markets knowing that the credit risk is mitigated through the ECGA’s coverage.
