Afrexim Bank reiterates commitment to promote Intra-African trade

The African Export-Import Bank has reiterated the commitment of the bank to promote Intra-African trade on the African continent.

Dr Benedict Oramah, the President of Afrexim Bank said this at a news conference on Wednesday in Abuja.

According to Oramah, the bank had a new strategy in Nigeria called “Impact 2021 African transformed’’ which was inaugurated in January.

According to him, the strategy is keyed on three pillars of intra-African trade, industrialisation and export manufacturing, and trade finance leadership.

Oramah said the bank planned at disbursing about 25 billion dollars in support of intra-African trade and had created a unit called intra-African trade initiative headed by a Nigerian to drive the process.

He said the bank was working at promoting intra-trade information and would also formalise the informal intra-African trade which was estimated at about 40 billion dollars today.

“How do we ensure that those who do trade pay in their local currency? Because the biggest problem Africa has is that we have about 54 countries with about 18 or 20 currencies.

“We have too many currencies and virtually most of them cannot be used to do trade across borders.

“So we are now in the process of developing an intra-African trade platform that will provide a clearing and settlement system that will support pan African traffic and trade.

“We want it to serve as a platform that will make it possible for people to pay for intra-African trade in their local currencies.

“The software for that project is being developed, we are hoping to launch it before the end of the year and we expect that by next year, it will be rolled out and we think it will make a big impact,’’ Oramah said.

He said the bank was making efforts to promote export trading companies across Africa, as well as develop a regulatory framework for those companies.

According to him, the bank will soon create an industrial park and extra processing zones to solve the problem of shortage of infrastructure that will make export manufacturing competitive in Africa.

“We are also promoting inspection and certification centres across the continent and the first round will be done here in Nigeria.

“We will continue to offer various trade finance services, shifting our trade finance toward financing the import of investment goods rather than financing just the import of consumption goods.

“We believe that if we turn our trade financing into investment goods financing, that is people financing import of equipment rather than financing the import of some consumption goods, we will create the capacities that are needed to produce within the continent and that is the direction we are going.

According to the president, the biggest problem in trade financing today is the withdrawal of international banks because of compliance risk.

He explained that the cost of compliance had gone up so high that many countries that were not seen as having the critical mass in trade business had been cut off.

He noted that the bank was expanding its trade services, hiring more people, developing the systems that would help the continent in this aspect.

Oramah said the bank was working with the Nigerian government to construct industrial parks and also develop an international inspection and certification centre in Nigeria which would commence in 2018.

On provision of medical services, he said Afrexim bank was working with the Federal Ministry of Health and kings college London to build a centre of excellence for tertiary care in Nigeria.

This, he explained would reduce the cost of medical treatment for and help save scarce foreign exchange spent in the quest for medicare.

He said a study for the construction of the centre was underway and the bank and Nigerian government was eager for the project to commence by 2018.

Our correspondent reports that Afrexim bank was established to help restart international trade and diversify intra-African trade across the continent.

Created in 1993, it is the only Public Private Partnership bank under a multinational framework.