EghtesadOnline: As a bid to ease trade with African countries, the Iran Chamber of Commerce, Industries, Mines and Agriculture is devising a barter system with African local banks, the secretary-general of Iran & Africa Council for Economic Cooperation, Mohammad Reza Faqihi, told Financial Tribune in an interview.
Faqihi said the project has been sent to ICCIMA and funding issues are under review. The scheme consists of four general phases and 13 operational measures.
“Trade with Africa is indeed important. Iranian industries can benefit from Africa’s rich mines and trade in raw materials and semi-industrial goods, especially during sanctions,” he said.
Faqihi noted that implementation of the plan would be a step forward toward reducing the effects of US sanctions on Iran. The country can use this opportunity to compensate economic losses and boost interaction with African companies trading in goods and services.
“The plan will not work with Africa’s international banks during the sanctions’ era because they are exposed to US business,” he said.
Iran-Africa barter project is being pursued in collaboration with the Foreign Ministry, Trade Promotion Organization of Iran, and the Africa Department at ICCIMA.
Financial Tribune's data analysis based on a Islamic Republic of Iran Customs Administration's report indicates that Egypt was Iran’s top export destination among the African countries during the first six months of the current fiscal (March-September). Iran traded 379,244 tons of non-oil goods worth $169 million with Egypt during H1, registering a 14.5% and 73.62% growth in volume and value respectively compared with last year's corresponding period.
Iranian export to Egypt stood at 379,005 tons worth $167.5 million, up 15.17% and 79.42% in volume and value respectively year-on-year. Egypt was Iran’s 17th export destination during the period. The exports included non-alloy semi-finished iron/steel products, non-alloy iron and steel ingot and methanol to the North African nation.
Egypt exported 239 tons of goods worth $1.4 million to Iran, down 88.73% and 62.47% in volume and value respectively YOY. Egypt was the 86th exporter to Iran over the six months. The imports mainly included double-edged razor blades, safety razor, and smoking pipes.
Next on the list of major customers of Iranian goods in Africa were Kenya and Sudan. Iran exported 131,993 tons of goods worth $49.3 million to Kenya, up 9.49% and 30.08% in volume and value respectively year on year. Exports to Sudan stood at 90,755 tons worth $37.2 million to register 7.42% and 2.15% decline in volume and value YOY.
This is while the International Trade Center data suggest that Iran exported $723,480 worth of commodities to Africa in 2017, registering an increase of 21.8% compared to the year before. The main goods exported to Africa included mineral fuels and oil, iron and steel, plastics and organic chemicals.
Egypt was the major customer of Iranian goods during the year with $257,463, followed by Kenya with $126,871, and Togo $62,163.
African companies exported an aggregate of $276,915 worth of goods to Iran in 2017, up by 85.6%. Major goods sent to Iran from Africa were copper, edible vegetables, fish, inorganic chemicals, cocoa, tobacco and manufactured tobacco substitutes and machinery.
Zambia was the main exporter, having exported $62,971 worth of goods, followed by Ghana with $52,311, and Ethiopia 38,394.
US President Donald Trump decided in May to abandon the Iran nuclear agreement and re-impose economic sanctions on Iran.
Several European diplomats say the EU is finalizing a Special Purpose Vehicle aimed at creating a barter system, similar to one used by the former Soviet Union during the Cold War, to exchange Iranian oil for European goods without money changing hands.