AFREXIMBANK, South African firm to invest $1billion to expand trade in Africa

African Export-Import Bank, AFREXIMBANK. [Photo credit: Guardian Newspaper]

The African Export-Import Bank (AFREXIMBANK) said it was launching a $1 billion financing programme with the Export Credit Insurance Corporation (ECIC) of South Africa to promote trade expansion and investments in Africa.

A statement sent to PREMIUM TIMES on Thursday said a memorandum of understanding was signed between the two partners in Cairo, Egypt on Monday to launch the programme.

Under the terms of the MOU, AFREXIMBANK and ECIC would jointly implement a South Africa-Africa Trade and Investment Promotion Programme (SATIPP) aimed at expanding trade and investment in the continent.

“SATIPP will involve the two institutions working together on identification, preparation and appraisal of trade transactions and projects; exploration of co-financing and risk-sharing opportunities, and knowledge-sharing work, with particular emphasis on intra-African trade matters, through technical cooperation, staff exchange, research and joint events,” the statement said.

South Africa joined AFREXIMBANK as shareholder in November 2017, while ECIC was named as its designated investor, the statement added.

By virtue of the country’s status as shareholder, AFREXIMBANK President, Benedict Oramah, said South Africa would be eligible to access the Bank’s trade promotion programmes and financial services.

Mr. Oramah said on Monday at the agreement signing ceremony that in line with Bank’s investment strategy, entitled: “Impact 2021: Africa Transformed”, intra-African trade, industrialisation and export manufacturing were priority.

“We decided to develop this joint programme to provide a platform for the realisation of our strategic objectives, while also aligning with South Africa’s strategic goal of expanding trade with the rest of Africa,” Mr. Oramah said.

He said in addition to being Africa’s most industrialised country and a regional manufacturing hub, with one of the largest and most diversified economies in the continent, South Africa also accounted for 24.5 per cent of exports and 15.4 per cent of imports under intra-African trade.

The joint initiative, Mr. Oramah pointed out, would support businesses through capacity building and market information initiatives; help small and medium-sized entrepreneurs join regional supply chains; and provide advisory services

He added that it would also guarantee to South African investors seeking trade and investment opportunities in AFREXIMBANK African member states, including Nigeria, which has the largest market in the continent.

Chief Executive Officer of ECIC, Kutoane Kutoane, said joining AFREXIMBANK as a shareholder had made it possible for South Africa to widen its access to other African markets.

Beyond ECIC’s mandate to increase the volumes of South African exports, Mr. Kutoane said the institution was committed to contributing to the Africa’s industrialisation in an inclusive manner.

“We realise that one of the best ways to enhance our capabilities to export as a country is by intensifying mutually beneficial trade with the rest of the continent,” Mr. Kutoane said.

Managing Director of AFREXIMBANK’s Intra-African Trade Initiative, Kanayo Awani, said SATIPP offered numerous opportunities to South-Africa-based entrepreneurs expanding to the rest of Africa, including trade and project financing, guarantees, twinning/business matchmaking services, export logistics facilitation, capacity-building, and trade information and advisory services.

Implementation of the MOU, he said, would involve technical teams from the two institutions collaborating in the identification of trade transactions and projects eligible for financing.

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Bassey Udo is PREMIUM TIMES’ Business & Economy Editor. He has covered finance, energy, oil, gas & extractive industries for over a decade. He is a winner of the Wole Soyinka Award for Investigative Journalism, and the Thomson Reuters Foundation (Wealth of Nations) Award for Business Reporting. Bassey is an alumnus of the U.S. International Visitors Leadership Programme. Twitter: @ba_udo

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