Tag Archives: AFREXIMBANK

Why we’re planning $25bn African Trade Strategy – Dr. Oramah, Afreximbank president

How to leapfrog Africa out of its slow and fragile economic growth to a blossoming super power is the strategic graph Dr. Benedict Okey Oramah plots daily, as he pilots the affairs of the African Export-Import Bank (Afreximbank) in his capacity as the President and Chairman of Board.

…In this interview he granted on the sidelines of the 25th Annual Meetings of Afreximbank in Abuja, Oramah speaks about the bank and its plans for Africa…

 

 Why we’re planning $25bn African Trade Strategy – Dr. Oramah, Afreximbank president

 

Seeing the huge untapped economic resources buried in the bowels of Africa and a corresponding manpower to match, Oramah insists the days of operating as fragmented national economies were over for Africa which needs to come out as a bloc to amplify its voice on the global business arena.

However, Afreximbank is supporting a lot of economic initiatives aimed at cementing intra-African ties and giving the continent greater opportunity to grow exponentially. Part of such initiatives is the $25 billion loan earmarked for the African Trade Strategy (ATS) that would be disbursed on a revolving basis between 2017 and 2021.

Oramah assumed the position of President and Chairman of the Board of Directors of Afreximbank on September 21, 2015. He was previously the Executive Vice President in charge of Business Development and Corporate Banking from October 2008. He joined Afreximbank as Chief Analyst in 1994 and was promoted to the position of Senior Director, Planning and Business Development in 2007.

Prior to joining Afreximbank, he was an Assistant Research Manager at the Nigerian Export Import Bank (NEXIM Bank) from 1992 and holds M.Sc. and Ph.D. degrees in Agricultural Economics, obtained in 1987 and 1991 respectively, from Obafemi Awolowo University, Ile-Ife, Nigeria.

In this interview he granted on the sidelines of the recent 25th Annual Meetings of Afreximbank in Abuja, Oramah speaks more about the bank and its plans for Africa.

 

Akinwumi Adesina: Africa must trade smart by ensuring rapid growth

 

 

The president of the African Development Bank (AfDB), Dr. Akinwumi Adesina, has said that with the rapidly changing world of trade and rising echoes of unilateralism, Africa must trade smartly, starting by ensuring rapid growth in intra-African trade.

Adesina pointed to the important role of the African Continental Free Trade Area (AfCFTA) in that regard, saying that, when fully implemented, the AfCFTA would raise the share of intra-African trade in Africa’s total trade from 16 per cent to 52 per cent.

It would also increase the value of Africa’s traded goods and services by $35 billion per year, he added.

He made the remarks in Abuja during a gala dinner organised to mark the 2018 Annual Meetings and 25th Anniversary of the African Export-Import Bank (Afreximbank).

Adesina commented Afreximbank for its achievements, saying that the AfDB was very proud that the institution it helped create 25 years ago had fully come of age.

“Today, Afreximbank is the leader on financing trade in Africa,” he said.

Highlighting the importance of trade finance, especially for small and medium-sized enterprises (SMEs), Adesina noted that the AfDB had provided trade finance lines of credit of $650 million and trade finance mitigation support of $250 million to support Afreximbank’s trade finance activities.

He called for strong partnership between AfDB and Afreximbank in the development of export processing zones, especially staple crop processing zones, so as to help transform rural economies based on agricultural industrialisation and value addition.

Earlier, Dr. Mahmud Isa-Dutse, permanent secretary in the ministry of finance of Nigeria, which hosted the gala dinner, congratulated Afreximbank on the celebration of its 25th anniversary.

He pledged Nigeria’s continuing support for the bank as it continued to deliver on its mandate of promoting African trade.

Afreximbank targets green bonds to boost climate finance

 

 

 

The African Export-Import Bank (Afreximbank) has partnered with pan-African energy conglomerate Aenergy to support sustainable infrastructure projects with innovative financial mechanisms, including green bonds.

Under the agreement, the two parties have the capacity to issue at least US$850mn in green bonds in the next five years, says Divaldo Rezende, Aenergy’s global head of climate and social finance.

The co-operation will promote low carbon technologies by attracting financing and specialised resources for energy generation, mainly in the renewable and transportation sectors. It will also develop investment funds for these projects. To this end, Afreximbank plans to be the first multilateral bank in Africa to issue green bonds in partnership with top-tier stock exchange platforms.

According to Amr Kamel, executive vice-president of business development and corporate banking at Afreximbank, the facility will be a huge opportunity for climate finance for African countries.

“It will create value from environmental assets and promote emissions of green bonds to support African governments and African companies in their pursuit of infrastructure investments, and will sustain their social and economic development,” he says.

The two parties have a “private pipeline of identified operations which they are evaluating together”, a spokesperson for the bank tells GTR, adding that they are targeting to complete one by next year.

Although the bank concedes that current demand for green bonds in Africa is low, it foresees “progressive growth” in parts of the continent.

“In the context of fighting climate change and achieving the sustainable development goals, green bonds are considered strategic to the development of a low carbon economy in Africa,” the bank says.

Multilateral development banks made commitments totalling US$35.5bn for climate finance last year, with Africa receiving just US$2.3bn, less than 1% of that amount.

The accumulated green bond market globally up until 2017 is US$865bn – and again Africa’s share is negligible.

Examples of green bond issuers in Africa to date include the African Development Bank (US$500mn), South Africa’s Industrial Development Corporation (US$700mn), Nedbank (US$490mn) and the federal government of Nigeria (N10.69bn).

Angola-based Aenergy implements projects across Africa in various industries, namely gas-to-power energy production, oil and gas, rail transportation, industrial installation and mining services. Its services include project development, procurement, logistics, engineering and execution, operations and maintenance services.

 

Afreximbank launches due diligence data platform

 

 

The African Export-Import Bank (Afreximbank) has launched a pan-African customer due diligence platform called Mansa. The product facilitates African trade by providing the single trusted source of primary data required to conduct due diligence checks on counterparties in Africa.

The Mansa platform is being positioned as the centralised ‘go to’ platform for fulfilling client due diligence (CDD) and know your customer (KYC) requirements throughout the African continent. By providing comprehensive due diligence information it will end the subjective evaluation of customers and eliminate the perceived, and often unfair, risk in trading with African counterparties. The platform also offers insight into the investment climate and information on related services on the continent.

The platform is named after Mansa Musa, the powerful ruler of the West African Malian Empire in the 1300s, who was responsible for opening up trade across Africa by establishing Timbuktu as a commercial, cultural and religious centre. He is believed to be the only person ever to control the flow of gold between Africa and the Mediterranean.

Speaking at the launch, Benedict Oramah, President of Afreximbank, said: “Our new Mansa platform is a natural extension of Afreximbank’s mission to expand, develop and diversify African trade. Mansa will enhance intra-African trade by enabling the efficient on-boarding of customers whilst reducing both operational workloads and the costs of compliance. Sometimes a new service comes along which represents a win-win for its users and Mansa is a perfect example of this.

“Afreximbank has taken the lead by creating a platform for client due diligence and know your customer. It will enable African financial institutions and corporate entities to meet customer and business partners’ expectations at the same time as ensuring consistent and effective regulatory compliance.”

The ultimate aim of the platform is to increase trade in, and with, Africa by de-risking compliance and strengthening relationships between international banks and global trading entities with their African counterparties, by promoting good governance, transparency and accountability, he added.

AfDB lauds Afreximbank’s efforts to boost intra-African trade Published July 18, 2018

 

 

The African Development Bank has commended the efforts of the African Export-Import Bank in advancing intra-African trade.

The President, AfDB, Akinwumi Adesina, described Afreximbank as a reputable and solid regional development finance institution that had been meeting significant financing needs in trade development and trade finance in Africa, according to a statement.

According to him, Afreximbank and the AfDB have enjoyed a collaborative and productive relationship since its inception 25 years ago.

He said, “The recent positive Moody’s rating is a signal of how well Afreximbank is managed, and the mark of the shareholders’ confidence is further manifested in the increase of Afreximbank’s capital base.

“As a founding parent, the AfDB is proud of its instrumental role in laying Afreximbank’s foundation and the achievements that the institution has made as its strategic partner, particularly in trade finance in Africa.”

Adesina stated that the AfDB would remain supportive, steadfast, and strong in its assistance for the export-import bank’s continued growth.

He added that the AfDB was also collaborating with the African Union Commission, Economic Commission for Africa, Regional Economic Communities, Afreximbank and other partners to ensure that African countries offer better trade facilitation, increased trade finance, and beneficial policies to increase trade.

Adesina said African countries were showing resilience as exemplified in the share of intra-African trade, which increased from 10 per cent in 2000 to 16 per cent last year.

According to him, the signing of the Africa Continental Free Trade Area agreement in March 2018 by the majority of African countries will enable the continent to trade more with itself and also enhance its attractiveness as an investment destination.

“Since the AfCFTA was signed, the AfDB has earmarked $4.5m to help boost intra-African trade and create more synergies with the bank’s high five priorities,” he said.

AfDB partners AFREXIMBANK to support African small, medium businesses

 

Akinwunmi Adesina

 

The African Development Bank (AfDB) is to provide a $500,000 grant under its African Private Sector Assistance (FAPA) programme to support emerging small, medium businesses in Africa.

During the recently concluded Annual General Meetings and 25th anniversary celebrations of the African Export-Import Bank (AFREXIMBANK) in Abuja, the bank signed an agreement to formalise the grant.

The Managing Director, Intra-African Trade, AFREXIMBANK, Kanayo Awani, signed the agreement on behalf of her bank, while Senior Director, Nigeria Country Office, Ebrima FAAL, signed for the AfDB.

The ceremony was witnessed by Chargé d’Affaires, Embassy of Austria in Nigeria, Elfriede Geisler, and Ambassador of Japan to Nigeria, Yutaka Kikuta, who represented the FAPA donor countries.

Mrs Awani said the agreement was aimed at upgrading the capacity and skill-sets of up to 20 emerging factoring firms in the continent.

Besides, the agreement would also help in providing advisory services to enhance the sustainability of established growth-orientated factoring firms, regulators, financial institutions and business and trade associations in Africa.

President of AFREXIMBANK, Benedict Oramah, said small and medium enterprises (SMEs) in Africa have long faced real difficulties accessing external finance for their business activities

This situation, he said, impeded their growth and prevented them from pursuing commercial opportunities.

“AFREXIMBANK sees factoring as a solution to bridge the funding gap facing SMEs, and the agreement will support our strategy to grow intra-African trade and facilitate greater SME contribution to regional and global supply chains,” Mr Oramah said

He said the bank was championing the development of factoring in Africa by focusing on the provision of credit lines to factors, capacity-building workshops, policy and regulatory inputs, advisory services and technical assistance to promote best practices.

The agreement with the AfDB, and the grant from FAPA, he noted, would reinforce and grow the availability of effective factoring across the continent and increase awareness of its availability.

Details of activities the grant would finance include: capacity building to address needs, including on-site training, provision of back-office support systems and customised manuals for marketing, credit and risk policy, finance and operations.

Besides, the grant would support advisory services to established factoring companies and serve as a platform to enable African factoring companies to network, exchange ideas and share best practices.

The other activities include development of a sustainable knowledge and learning platform, e-learning, workshops and the certificate of finance in International Trade, which provides four weeks’ formal training in factoring under a programme developed by the University of Malta.

Also, the grant would help the provision of project management coordination to ensure timely project implementation.

African Development Bank bails out Afreximbank with $500,000 grant

 

 

African Development Bank bails out Afreximbank with $500,000 grant

The African Export-Import Bank (Afreximbank) has entered into an agreement under which the African Development Bank to provide it with a $500,000 grant from its African Private Sector Assistance (FAPA) programme to be used in supporting emerging factoring firms in Africa.

The Agreement, signed at the Afreximbank Annual Meetings and 25th Anniversary Celebrations in Abuja on 13 July, is aimed at upgrading the capacity and skill-sets of up to 20 emerging factoring firms and providing advisory services to enhance the sustainability of established growth-orientated factoring firms, regulators, financial institutions and business and trade associations in Africa.

Kanayo Awani, Managing Director, Intra-African Trade, signed on behalf of Afreximbank while Ebrima FAAL, Senior Director, Nigeria Country Office, signed for the African Development Bank, in the presence of Elfriede Geisler, Chargé d’Affaires, Embassy of Austria in Nigeria, and Yutaka Kikuta, Ambassador of Japan to Nigeria, who represented the FAPA donor countries.

Commenting on the agreement, Dr. Benedict Oramah, President of Afreximbank, said: “SMEs in Africa have long faced real difficulties accessing external finance for their business activities and this has impeded their growth and prevented them pursuing commercial opportunities. Afreximbank sees factoring as a solution to bridge the funding gap facing SMEs, and the agreement will support our strategy to grow intra-African trade and facilitate greater SME contribution to regional and global supply chains.”

“We are championing the development of factoring in Africa, and our support focusses on the provision of credit lines to factors, capacity-building workshops, policy and regulatory inputs, advisory services and technical assistance to promote best practices. This Agreement with the ADB, and the Grant from FAPA, will reinforce and grow the availability of effective factoring across the continent and increase awareness of its availability.”

The grant will finance:

Capacity building tailored to address needs, including on-site training, provision of back-office support systems and customised manuals for marketing, credit and risk policy, finance and operations, addition to advisory services to established factoring companies and a platform to enable African factoring companies to network, exchange ideas and share best practices.

Development of a sustainable knowledge and learning platform, including e-learning, workshops and the Certificate of Finance in International Trade which provides four weeks’ formal training in factoring under a programme developed by the University of Malta; and

Provision of project management coordination to ensure timely project implementation.

NEXIM Bank boss frets over Africa’s high informal trade

 

 

Managing Director, Nigerian Export-Import Bank (NEXIM) Mr. Abba Bello, has expressed concern about high level of informal trade in Africa.

He made this lamentation at the Afreximbank Annual Meetings and 25th Anniversary Celebrations in Abuja.

 

Bello noted that with informal non-oil exports estimated at a minimum of $12billion annually as against recorded non-oil export trade averaging about $3billion annually in recent times, the solutions lies with factoring as best alternative means of financing.
Abba was contributing to a round table debate on Factoring at one sidelines of Afreximbank event.

This came as African Export-Import Bank (Afreximbank) entered into an agreement under, which the African Development Bank to provide it with a $500,000 grant from its African Private Sector Assistance (FAPA) programme to be used in supporting emerging factoring firms in Africa.

 

The pact, signed at the Afreximbank Annual Meetings and 25th Anniversary Celebrations in Abuja, is aimed at upgrading the capacity and skill-sets of up to 20 emerging factoring firms and providing advisory services to enhance the sustainability of established growth-orientated factoring firms, regulators, financial institutions and business and trade associations in Africa.

 

Kanayo Awani, Managing Director, Intra-African Trade, signed on behalf of Afreximbank while Ebrima FAAL, Senior Director, Nigeria Country Office, signed for the African Development Bank, in the presence of Elfriede Geisler, Chargé d’Affaires, Embassy of Austria in Nigeria, and Yutaka Kikuta, Ambassador of Japan to Nigeria, who represented the FAPA donor countries.

Commenting on the agreement, Dr. Benedict Oramah, President of Afreximbank, said: “SMEs in Africa have long faced real difficulties accessing external finance for their business activities and this has impeded their growth and prevented them pursuing commercial opportunities.

 

“Afreximbank sees factoring as a solution to bridge the funding gap facing SMEs, and the agreement will support our strategy to grow Intra-African trade and facilitate greater SME contribution to regional and global supply chains.”

 

Nigerian government to take country pavilion at the IATF

 

Speakers and some guests after the IATF engagement session in Abuja. L-R: Iyalode Alaba Lawson, President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture; Albert Muchanga, Commissioner for Trade and Industry, African Union; Ibrahim Hassan, Deputy Governor, Jigawa State; Afreximbank President Dr. Benedict Oramah; Rahman Adeola Ipaye, Deputy Chief of Staff in the Nigerian Presidency; Olusegun Awolowo, Executive Director, Nigerian Export Promotion Council; Jean-Louis Ekra, Vice Chairman, IATF Advisory Council; Kanayo Awani, Managing Director, Intra-African Trade Initiative, Afreximbank; Abba Bello, Managing Director, Nigerian Export-Import Bank; and Victor Osadolor, Deputy Managing Director, UBA.

 

The Nigerian government  has become the second country to announce plans to take a country pavilion at the Intra-African Trade Fair (IATF) being organised by the African Export-Import Bank (Afreximbank) in Cairo from 11 to 17 December.

Prof. Yemi Osinbajo, Vice President of Nigeria, who made the announcement during an engagement session on the IATF co-organised by Afreximbank and the Nigerian Export Promotion Council (NEPC), said that Nigeria would participate effectively in the Trade Fair and would use it as an opportunity to showcase its trade and investment opportunities. In June, South Africa announced that it would take a country pavilion.

“We believe that the Trade Fair will provide an opportunity for Nigeria to engage with other countries and investors who are interested in partnering with Nigeria to support the “Zero Oil Policy” to reposition the Nigerian economy,” said Prof. Osinbajo, who was represented by Rahman Adeola Ipaye, Deputy Chief of Staff in the Nigerian Presidency.

He urged Nigerian companies and states to book space at the trade fair in order to showcase their unique goods and services, asking them to spread word about the trade fair to their networks so as to ensure that Nigeria was properly represented.

Also speaking, Mohammed Badaru Abubakar, Governor of Jigawa State of Nigeria, said that there was need to reinforce the collective belief that African economic liberation could only be realized by and within the African continent.

Represented by Ibrahim Hassan, Deputy Governor of the state, Alhaji Abubakar, who is also Chairman National Committee on Export Promotion of the National Economic Council, said that Nigeria was committed to leveraging on the opportunities to be created by the trade fair to expand its continental trade.

Earlier, Kanayo Awani, Managing Director of the Intra-African Trade Initiative at Afreximbank, said that the aim of the IATF was to close the gap on access to trade and market information in Africa, adding that the trade fair would create a sustainable platform for connecting buyers and sellers across Africa.

Ms. Awani added that the trade fair would transform the way African countries traded with each other, saying that there was a case for the launch of a Nigeria-Africa Trade and Investment Promotion Programme (NATIPP)

Under NATIPP, we will make available a suite of products, programmes and services as well as risk mitigation to support trade and investment between Nigeria and other African countries,” she said. “NATIPP, proposed at $1 billion, will also support the financing of transactions concluded at the Trade Fair.”

Also speaking, Olusegun Awolowo, Executive Director of NEPC, said that the IATF would enable Nigeria to tap its export potential with the rest of Africa.

He put Nigeria’s export potential with West Africa at $200 million, out of which $102.1 remained untapped, while for North Africa, it was $31 million, with $16.1 untapped.

The engagement session also featured a panel discussion by Afreximbank President Dr. Benedict Oramah; Albert Muchanga, Commissioner for Trade and Industry of the African Union; Abba Bello, Managing Director, Nigerian Export-Import Bank; Iyalode Alaba Lawson, President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture; and Victor Osadolor, Deputy Managing Director, UBA.

Hosted by Egypt, through the Export Development Authority, and organised in collaboration with the African Union and several other partners, the IATF is aimed at deepening trade ties among African countries and at supporting the implementation of the African Continental Free Trade Area (AfCFTA) Agreement.

The Abuja session is the third in a promotional programme for IATF2018 and follows similar sessions in Cairo and Johannesburg. Sessions are also planned for Nairobi and Abidjan.

Features of IATF2018 include a trade services portal, country pavilions, and a virtual trade fair component that will serve as an ongoing electronic exhibition which will outlast the physical fair.

Afreximbank, AfDB sign $.5m pact

 

 

The African Export-Import Bank (Afreximbank) has sealed $500,000 pact with the African Development Bank to support African Private Sector Assistance (FAPA) programme. The fund will be used in supporting emerging factoring firms in Africa.

The agreement, signed at the Afreximbank Annual Meetings and 25th Anniversary Celebrations in Abuja, is aimed at upgrading the capacity and skill-sets of up to 20 emerging factoring firms and providing advisory services to enhance the sustainability of established growth-orientated factoring firms, regulators, financial institutions and business and trade associations in Africa.

Managing Director, Intra-African Trade, Kanayo Awani, signed on behalf of Afreximbank while Ebrima FAAL, Senior Director, Nigeria Country Office, signed for the African Development Bank, in the presence of Elfriede Geisler, Chargé d’Affaires, Embassy of Austria in Nigeria, and Yutaka Kikuta, Ambassador of Japan to Nigeria, who represented the FAPA donor countries.

President of Afreximbank, Benedict Oramah said: “SMEs in Africa have long faced real difficulties accessing external finance for their business activities and this has impeded their growth and prevented them pursuing commercial opportunities. Afreximbank sees factoring as a solution to bridge the funding gap facing SMEs, and the agreement will support our strategy to grow Intra-African trade and facilitate greater SME contribution to regional and global supply chains.”

Afreximbank Declares $57.53m Dividend

 

 

The African Export-Import Bank (Afreximbank) has declared a $57.53 million dividend for shareholders as it grew its revenues by 25 per cent to reach $645 million in its 2017 financial year.

The $57.53 million represented a 51 per cent increase over the $37.96 million declared in the previous year.
The President and Chairman, Board of Directors of Afreximbank, Dr. Benedict Oramah, who presented the 2017 financial report at the annual meetings in Abuja at the weekend, said its revenue grew by 25 per cent to reach $645 million, driven by healthy interest income on average assets of about $14 billion, of which about 70 per cent was loans and advances.

According to Oramah, net income rose by 34 per cent to reach a new record of $220 million.
He noted that the bank’s liquidity was very strong, with cash and due from banks reaching $3.2 billion, up 153 per cent from $1.3 billion in 2016, while liquidity cover ratio was 185 per cent, above the target of 105 per cent.

“Mindful that intra-African trade cannot flourish without a strong industrial base, we are pressing ahead with our effort to support the development of industrial parks and export processing zones across Africa,” stated the President.

“Projects amounting to about $1.5 billion were already financed or underdevelopment in Cote d’Ivoire, Nigeria, Gabon, Togo, Chad and Burkina Faso. We are also supporting the investment promotion efforts of Egypt’s Suez Canal Economic Zone,” Oramah said.
He announced that the bank had recently entered into partnerships or understandings with numerous third parties to support and finance economic and trade development and trade diversification across Africa.

They include those with the African Guarantee Fund, Attijariwafa Bank, China Eximbank, the Export Development Bank of Egypt, the Export Credit Insurance Corporation of South Africa, the Finance Center for South-South Cooperation, Kings College Hospital London, and Indonesia Eximbank.
Others are the International Islamic Trade Finance Corporation, the Islamic Corporation for the Development of the Private Sector, the Made-in-Africa Initiative and the Russian Export Centre.

In his keynote address at the closing ceremony, President Muhammadu Buhari pointed out that the bank, through its dynamism and tenacious leadership, had proved that Africans could come together to build something meaningful.
Those attributes, Buhari said, had enabled the Bank to achieve the success which it had enjoyed since its establishment 25 years ago..
The annual meetings began on July 11 with keynote addresses, presentations and panel discussions on topical trade and trade finance issues, including the African Continental Free Trade Agreement (AfCTFA).

Over 100 speakers, including heads of state, ministers, central bank governors, directors-general of international trade organisations, business leaders, African and global trade development experts, and academics, spoke during the four- days of the meetings.
The meeting also saw the election of , Nigeria’s Minister of Finance, Kemi Adeosun as the new Chairperson of the General Meeting of Afreximbank Shareholders.

CFTA must be free and fair –Buhari insists

….Adeosun elected Chairman, Afrexim Bank

 

President Muhammadu Buhari on Saturday charged those saddled with the responsibility of implementing Continental Free Trade Agreement (CFTA), to ensure the trade agreement is both free and fair. He said the fairness of the trade agreement is achievable assuring that, Nigeria will work towards it. Buhari directed the relevant agencies to conduct intensive and extensive consultations across the nation on the Continental Free Trade Agreement (CFTA).

He said the consultation was very important before a final decision is arrived at, as according to the president, ” Nigeria is a federation of 36 states plus FCT Abuja, 774 local governments and millions of interested stakeholders who must be consulted with and listened to, in order to ensure an optimum outcome.”

Addressing the participants, including African leaders that gathered in Abuja for the 25th anniversary celebration/Annual General Meeting of Afrexim Bank, in which Nigeria’s finance Minister, Mrs. Kemi Adeosun was elected new chairperson Board of Afreximbank, president Buhari said significant progress has been made in the consultations, noting that the team had met key stakeholders across the six geo-political zones.

Commending African leaders and Head of States for the success recorded with Afrexim bank as the continent’s leading finance institution, he said the celebration of 25th years anniversary demonstrates to the world that Africa can create and maintain a world class organisation. ” Just two days ago, I had the pleasure of hosting the board of Afrexim Bank. I was pleased to hear first hand the positive impact the bank has made to date. I was particularly encouraged by their plans for inclusive growth and sustainable development in Africa’s economies. This was the vision of the bank’s founding fathers.”

“Africa’s journey to prosperity can only be achieved by supporting inclusive and sustainable projects. We must therefore congratulate and continue to support AfreximBank to deliver on this mandate,” he said. While underscoring the importance of trade among African countries, Buhari said no nation can survive on its own.

“Trading is important and the terms of trade are important.

Therefore, there is a need to ensure our national interests as well as our regional and international obligations are balanced. There is a need to ensure our national interests as well as our regional and international obligations are balanced,” he said. Digressing to the economic policy of his administration, the President told participants that his administration has adopted a policy of inclusive economic growth.

“We are determined to attain this by reducing our over reliance on crude oil. To date, we have invested aggressively in infrastructure to support our growth potential in agriculture and solid minerals.

We are also empowering many Nigerian entrepreneurs in the entertainment and digital economies to mention a few.

“Our government stands to enable those who can help themselves but is equally committed to supporting those who can’t. This is why we introduced our Social Investment Program which is changing lives through, school feeding, conditional cash transfers and youth employment, among others.” In his opening remarks, AfreximBank President/ CEO Dr. Benedict Oramah announced the creation of Africa’s Export Development Fund (FUNFED) ,a specialised institution, a fully owned subsidiary of Afrexim Bank.

The objective of the FUNFED, he explained, is to contribute towards expanding the share of manufactured and service exports in Africa’s total exports by attracting appropriate FDI flows into those dynamic sectors. According to him, Afrexim Bank’s initial investment commitment in the FUND amounts to 100 million US dollars which is expected to attract additional investments to bring funds under management to 1 billion US dollars in the near term.

“Revenues grew strongly by 25 percent to 645 million US dollars, driven by healthy interest income on average assets of about 14 billion US dollars, of which  about 70% were loans and advances. Net income as a result rose by 34 percent to reach a new record high of 220 million US dollars.

“And despite the fact that loans dropped by 18 percent at year- end following the repayment of about 3.2 billion in Countercyclical Trade Liquidity Facility loans, that fell due in December. Non-performing loans ratio only rose marginally from 2.4 percent to 2.5 percent,” he said.

 

Africa’s free trade agreement, critical to industrialisation – Expert

 

 

The Executive Secretary, Africa Capacity Building Foundation (ACBF), Professor Emmanuel Nnadozie has urged Nigeria to take advantage of the African Continental Free Trade Agreement (AfCTA) to accelerate its industrialisation process.

Nnadozie recalled that Nigeria had championed the AfCTA for many years, commended the government for undertaking a nationwide consultation with necessary stakeholders on the impact of the trade agreement before signing.

“I believe that a country should not be signing international agreements and making decisions that have far reaching consequences for stakeholders without adequate consultation. Having said that this consultation should have been done a long time ago when these negotiations were taking place.

“There was no need to wait till now to sensitise the country and explain to businesses, to Civil Society Organisations (CSOs) and other important stakeholders about the need for Nigeria to sign up,’’ he said.

He predicted that Nigeria would eventually sign the trade agreement because of the benefits and opportunities it presents for local manufacturers.

“Make no mistake, Nigeria will eventually sign.The point is after they sign and ratify, are they ready to take advantage of this opportunity? And my worry is that Nigeria may not be ready to take this advantage. This is because a continental free trade mechanism has to be established to bring together the private sector, the public sector and other stakeholders.

“Also, the private sector has to be ready to take advantage of the opportunity. Right now, only commercial banks and people like Dangote you see operating in other countries on the continent.

“So others have to gear up their game, and begin to understand that this is serious business,’’ he said.

According to Nnadozie, the ACBF, which is the Capacity Development arm of the African Union, was working with the AFREXIM Bank to build the capacity of government institutions responsible for trade on the continent.

He said this would ensure that trade and ministries of industry were properly equipped to play their role effectively in ensuring that their countries benefit from the trade agreement.

The agreement which is expected to increase intra-African trade from the current 16 per cent to 53 per cent with a corresponding GDP growth, as well as increase employment and job creation on the continent would also cover 1.2 billon Africans with Gross Domestic Product (GDP) of 2.5 trillion dollars

About 49 African countries have so far signed the agreement, excluding Nigeria.

 

 

How Nigeria, others shared African Export-Import Bank (Afreximbank)’s $65b loan syndications

After 25 years of operations that kicked off in Abuja, the African Export-Import Bank (Afreximbank) said it has mobilised no fewer than $65 billion worth of loan

 

After 25 years of operations that kicked off in Abuja, the African Export-Import Bank (Afreximbank) said it has mobilised no fewer than $65 billion worth of loan syndications for trade financing and the development of the continent’s economies.

Nigeria, as a major stakeholder and contributor to the pan-African largest multilateral lender, has received about 40 per cent of the bank’s interventions, covering public investments and private sector working capital, particularly, the banks.

Today, while Nigeria and the rest of the African economies are still battling with financing challenges, the question of what it would have been like for the continent, without the emergence of the bank remains at large.

Meanwhile, the bank noted that there is as much as $120 billion in trade finance gap that needs to be closed; yearly $93 billion trade infrastructure gap; and a global trade share at three per cent, that needs to be raised; while Intra-African trade is still far below aspirations.At the weekend, during the yearly meetings of Afreximbank, part of the $65 billion syndications was injected further into Nigeria’s economy, as the Bank of Industry signed for a $750 million facility for on lending to small businesses.

Also, Aliko Dangote, signed a $650 million loan facility with the for an oil refinery project in Lekki, Nigeria, on a seven-year term loan, with five years moratorium.The government received a provision of $1.8 billion to support the economy during the recent oil price shock between 2015 and 2016, while a provision of liquidity and trade finance lines of more than $800 million was made during the banking consolidation when many international banks cut credit lines to the country.

Currently, Afreximbank’s initiatives in Nigeria include the development of testing and inspection centres across the country in collaboration with the Standards Organization of Nigeria; and establishment of a Centre of Excellence for Tertiary Healthcare/Medical Park.There is ongoing talks to participate in the Nigeria SEZ Investment Company Limited being promoted by the government; the support for industrial projects through loans to strategic banks; provision of trade and letter of credit lines to all Nigerian banks, in close coordination with Central Bank of Nigeria; and development of an Afreximbank Africa Trade Centre in Abuja.

The bank’s President, Dr. Benedict Oramah, told The Guardian that the emergence of the bank was in reaction to challenge by an unprecedented debt crisis that ravaged the continent like a plague those days and as a child of necessity, was conceived for Africa and by Africans and now effectively delivered by Africans.So far, the bank has provided over $50 billion, granted in support of trade and project activities across Africa, supported the emergence of world class hotels across the continent, including upscaling facilities in Island economies like Cape Verde and Seychelles.

The bank prevented the implosion of Zimbabwe by providing an aggregate of about $4 billion to avert hunger and support critical businesses when virtually all international banks cut off the country.“Who would today have stepped in to provide trade services lines in excess of 4 billion to about 500 banks across Africa so that no country can be denied access to trade finance as a result of high compliance cost?

“Who would have supported connectivity among African markets by leveraging close to $3 billion in support of African airline operations?“How would some indigenous Nigerian entities have been able to acquire oil production acreages if the Bank had not stand by them?“Who would have financed the creation of at least 130 thousand metric tonnes of cocoa processing capacity in Cote d’Ivoire and revived processing plants in other major producing countries, namely Ghana and Nigeria?“Who would have provided $9 billion to a number of African central banks and commercial banks at the height of the commodity price induced crises of 2014-16?” he queried.Oramah said Afreximbank is powering the Collective Will of the Continent to boost intra-regional trade and export manufacturing and now about to launch a pan-African payment and settlement platform in support of intra-African trade.

Already, there are SMEs operating in export supply chains with hopes of improved access to finance as a result of the bank’s efforts to promote factoring, such that from almost nothing, Africa can today boast of 32 factoring companies sharing in near trillion dollar global market.President Muhammadu Buhari, while declaring open the bank’s yearly meetings, in Abuja, at the weekend, commended Afreximbank’s strategy in the continent through its dynamism and tenacious leadership, saying the lender had proved that Africans could come together to build something meaningful.

While delivering his keynote address, he said that those attributes had enabled the bank to record the successes so far since its establishment 25 years ago.He noted that the bank’s efforts to integrate Africa through its African Continental Free Trade Area (AfCFTA), is already undergoing a careful review, with several consultations to get the inputs of the nation’s diversed professionals, entrepreneurs and investors.

South African President, Cyril Ramaphosa, who attested to the portents of AfCFTA, being driven by Afreximbank, when adopted, would provide the integrated and diversified markets that will unlock Africa’s full productive capacity.He lamented that “intra-African trade is only 15 per cent of Africa’s total trade, compared to Europe’s 67 per cent and we need a sustained strategic shift to industrialisation, increased Intra-African trade, and de-commoditisation through increased value addition and export diversification.”

Afreximbank’s Chief Economist, Dr. Hippolyte Fofack, said: “The AFCFTA must emphasise policies promoting export diversification for each member country. In addition, efforts must be increased to motivate more technology-intensive manufactured goods.“Given the current average technology and skill content in Intra-African trade, the AFCFTA seems to be well positioned to help achieve and deliver more technology-intensive manufactured goods.”

The Minister of Finance, Kemi Adeosun, said that continued infrastructure improvements and a focus on trade, particularly regional trade, would drive sustainable growth.Adeosun commended Afreximbank for its role during the last global recession when it supported many African countries with trade support and lines of credit at a time when others were withdrawing from Africa.

AFREXIM Earmarks $25bn For Infrastructure Development In Nigeria, Others

 

Afrexim-President-Dr-Benedict-Oranmah

 

President of African Export Import (AFREXIM) Bank, Benedict Oranmah says the bank has committed the sum of $25 billion for disbursement to support African Continental Free Trade Agreement (AfCFTA) and intra-African trade (in Nigeria and other African countries) by the end of 2021 as well as championing, alongside the AU, the first ever Intra-African Trade Fair that will be held in Cairo in December this year.
The AFREXIM CEO said the bank has an intra African trade strategy hinged on three pillers: create, connect and deliver. He said aim is to link the African producers to their buyers by providing logistics that would ensure that manufactured goods get to the market. Dr Oranmah said $8 billion has been disbursed already. “We are creating the infrastructure that will help trade to occur,” Oranmah said, adding that the motive is to attract foreign direct investment through the AfCTA.
The AfCFTA is a treaty that is expected to accelerate the integration of African market, foster regional value chains, promote dynamic comparative advantage across Africa for certain kinds of goods and boost employment.
Speaking at the event that is holding in Abuja, South African President Cyril Ramophosa urged the Nigerian government to sign on to the the AfCTA that currently has 44-member countries from the continent, while expressing confidence that the conference will develop practical framework that will facilitate Africa’s growth to achieving the agenda 2063 of the African Union.
Ramophosa said other African countries look up to Nigeria and South Africa, hence the need for the two leading economies to sign the agreement in order to show their leadership role. “As Africans, we should play the role we are endowed to play with innovation and talent which Africa is known for.
In her response, Minister of Finance, Mrs Kemi Adeosun said the federal government is still consulting with the necessary stakeholders before it will come out to make her decision known on the signatory to the continental trade agreement. Adeosun also called on Afreximbank to invest more in the African continent to promote trade and investment and support more businesses to grow.
“Urgency of now is the message for Africa,” Adeosun said the event to mark the Annual General Meeting of the bank and its 25th anniversary termed: ‘celebrating the past, shaping the future’. “We are tired of hearing of rhetoric words -Africa’s potential, let us out it into action. As a government we are working to encourage real growth and sustainable trade within the African continent. We must transform our national economies and we must transform trade,” she said.
The Afreximbank President said the anniversary was significant because it marks 25years after the bank was established at the time the African economic difficulties struck in 1980s; poverty became rife, wars and counter coups were high. “It was like the continent was going to implode. It was in that context that African development bank championed the establishment of Afrexim, a bank that has done about $50 billion of investments. We are pleased that emergency funds was able to achieve the desired results,” Oranmah stated.
Dr Oranmah said CFTA is important because it will empower African countries to come together to negotiate with developed countries. He added that the bank is working on a plan that will make the use of foreign currency trend towards zero in the continent by encouraging African countries to trade in individual currencies with each other.
Part of activities of the opening ceremony was the signing of a €500 million agreement between Afreximbank and the Development Bank of the Central African States (BDEAC). BDEAC is a multilateral development bank that is charged with financing of the development of the member states. Dr Oramah signed the agreement on behalf of the bank while Mr. Fortunato Mbo Nchama signed on behalf of BDEAC.