African Export Import Bank (Afreximbank) is to double its financing of intra-African trade to 40 billion dollars on a revolving basis by 2026.
This bank’s intra-African trade financing stood at 20 billion dollars in 2021.
Mrs Kanayo Awani, Afreximbank’s Executive Vice President, made the disclosure at the Intra-African Trade Fair 2023 (IATF) Nigeria High Level Business Roadshow on Monday in Lagos.
It was reported that IATF 2023, scheduled for November 9 to Nov. 15, in Egypt, is organised by Afreximbank, African Union Commission and the Africa Continent Free Trade Area (AfCFTA) Secretariat.
The event is a platform for businesses to access an integrated African market of over 1.3 billion people with a gross domestic product of over 3.5 trillion dollars created under the AfCFTA.
Awani said that Afreximbank was not only spearheading the IATF to support AfCFTA, but was also at the forefront of supporting African trade and had developed several financing and facilitation instruments to support trade and investments.
She said the bank was working with AfCFTA Secretariat to put in place AfCFTA Adjustment Fund to facilitate and provide support through financing, technical assistance, grants and compensation funding to AfCFTA state parties and private enterprises.
The official said that this would aid adaptation and effective participation in the AfCFTA.
“The Board of Afreximbank has approved and committed one billion dollars to support the funding of the initiative and 10 million dollars grant that will facilitate the establishment and operationalisation of the adjustment fund.
“We are also partnering with the AfCFTA Secretariat and AU to ensure a successful implementation of the Pan-African Payments and Settlements System (PAPSS), with the view to facilitating the payment and settlements of trade transactions in local currencies.
“This will address the challenge of currency inconvertibility and foreign exchange shortages that hamper intra-African trade,” she said.
Awani added that Afreximbank was also leveraging digitalisation through the African Trade Gateway – a digital ecosystem created to facilitate intra-African trade.
She said that the ecosystem comprised an integrated and function-specific set of platforms that would help to surmount impediments to cross-border trade.
According to Awani, to facilitate the movement of goods, Afreximbank developed the Afreximbank African Collaborative Transit Guarantee Scheme to ensure seamless transportation of goods across multiple borders through issuance of a single technology-enabled transit bond.
She said the scheme backed by one billion dollars commitment provided by Afreximbank, would lead to cost saving of more than 300 million dollars yearly.
“We have also created an African Trade Facilitation Programme (AFTRAF) through which we are forging strong partnerships with African commercial banks to help them finance intra-African trade.
“The Bank is also working with the African Association of Automotive Manufacturers (AAAM), African Union and the AfCFTA Secretariat to develop a viable automotive industry in Africa.
“In this context, Afreximbank has developed a one-billion-dollar global automotive financing facility for the automotive industry.
“We are also providing support in terms of facilitating the development of regional value chains and the implementation of the Continental Automotive Strategy that was adopted by trade ministers early this year.”
She added that the bank was working with the International Trade Centre to train African companies including SMEs on how to export under the AfCFTA.
“The training programme provides trade and market information to assist the businesses to identify export opportunities, how to comply with all the export requirements under the AfCFTA as well as how to access finance, payment and settlement, among others,” she said.
Awani reiterated the bank’s commitment to working with member-countries to position them to take advantage of the AfCFTA.
She said that in an effort to support Nigeria’s industrialisation and export development efforts, Afreximbank had invested over 36 billion dollars in the Nigerian economy since its creation in 1993 through its trade and projects financing.
Awani said that the support covered a range of sectors and industries, including energy, transport, financial services, healthcare, manufacturing, and trade infrastructure.