Using new financial instruments for improving oil trade across Africa: opportunities and limits

This brief paper discusses the potential for using new financial instruments for two purposes: improving intra-African oil trade; and improving the management of the financial flows that come with oil imports and exports. Although different, there are two significant similarities between these two issues. Firstly, the new financial instruments that can be used share some characteristics, and are often arranged/provided by one and the same department in trading companies and banks; they are often used together. Second, in both cases, the key problem that these financial instruments are meant to solve is that of risk. In one case, counterparty risk, in the other, price risk. (au)