At the 12th Extraordinary Summit on Industrialisation and Economic Diversification and the Extraordinary Session held in Niamey late November, the African Export-Import Bank offered an instrumental report about the pace of economic diversification and industrialisation across Africa. It was one among several review reports dealing with the present and future of Africa.
In the first place, the African Bank offers strong financial support, engages in external fund raising campaigns and collaborates with the African Union and AU members. Beyond that, the Bank gives advisory services relating to development of various economic sectors – all these in attempts to improve the conditions as espoused in the shared ‘Agenda 2063: the Africa We Want’ in Africa.
The Bank has through several initiatives and programmes proceeded with courage and determination – using the necessary high-level platforms within and outside Africa – to drum home the need for development funds. What’s required here is for African leaders to exhibit good governance; design and implement the best policies; and speak with one voice for realising the set AU Agenda 2063.
While the bank has done a lot during the past few years, not many African leaders have achieved what was expected. Afreximbank intervened strongly during the COVID-19 pandemic, disbursing over US$8billion to central and commercial banks to avert looming trade debt payment defaults and support the procurement of test kits, PPEs and other COVID-19 containment materials.
The Afreximbank supported the first-ever pooled procurement by African Union members in an emergency, when it provided a US$2billion financing toward the procurement of 220 million doses of Johnson and Johnson vaccines.
And as the Russia-Ukraine crisis rages on, the Bank has also stepped up and already disbursed over US$5billion toward the procurement of food, fertiliser and grains. Beyond that, the Bank is closely working with UNECA, the AU and AfCFTA Secretariat to create a pooled procurement platform called the Africa Trade Exchange (ATEX), which is helping African countries to procure grains, edible oils and fertiliser at a much reduced cost.
It continues to support implementation of the African Continental Free Trade Agreement (AfCFTA). During the five years to 2021, Afreximbank disbursed over US$20billion in support of intra-African trade and investments and plans to double this to US$40billion during the 5 years of 2022 to 2026.
Afreximbank is helping African economies to manage the exodus of international banks by financing African-owned financial institutions to acquire those banks, thus helping to build a strong, interconnected African financial system. It is re-creating banking systems so that they can serve Africa better. It has also on-boarded about 500 of the continent’s 600 regulated commercial banks into the Afreximbank Trade Finance Facility (AFTRAF), providing them with Trade Credit Confirmation lines.
The goal is to grant an aggregate of US$8billion in Trade Confirmation lines to these African banks, and ensure every country on our continent has at least one bank that has a dedicated credit line to support intra-African trade. Afreximbank sits today at the centre of the most extensive messaging network, with connections to almost 500 banks. It has built a web that will form the architecture for an integrated African banking network.
Those mentioned above are the bank’s efforts to support Africa’s economic development prospects defined by the extent of control the continent wields over its financial system – that is, access to and control of capital that defines the continent’s future.
As partners, Afreximbank, the African Union Commission and AfCFTA secretariat have launched commercial operation of the Pan-African Payment and Settlement System (PAPSS). It is now possible to conduct intra-African trade payments with African national currencies. The Bank is proud to be backing settlements under this system with a facility, thanks to leadership of the African Union and Commission for their strong support toward this transformative initiative.
Afreximbank is working with the AfCFTA secretariat and Council of Ministers for Trade to establish the AfCFTA Adjustment Fund. The Fund is expected to help countries adjust in an orderly manner to AfCFTA tariff removals, and prepare them to participate in the new trading regime. The Bank earlier this year appointed the Fund Manager of a US$10billion Fund, which it is supporting with a US$1billion facility and a US$10million grant directed at the Base (Compensation) Fund.
With industrialisation, the Bank is working with various African governments to develop and expand Industrial Parks (IPs) and Special Economic Zones (SEZs) to deal with infrastructural constraints to industrialisation. These parks are ongoing across ten African countries, including two parks in Malawi and one in Cote d’Ivoire under development. It has also commenced discussions for the creation of industrial parks in DRC, Zambia, Rwanda, Kenya and Botswana.
With the first-ever Africa-Caribbean Summit in 2021, Afreximbank has taken steps to accelerate integration of the two regions. In early September, the first-ever Africa-Caribbean Trade and Investment Forum attracted over 1,000 participants from Africa and the Caribbean.
Since then, about 9 of 14 CARICOM countries have signed a Partnership Agreement – a treaty instrument akin to the Afreximbank Establishment Agreement, thereby opening up the region for the Bank’s interventions. This partnership creates opportunity for Afreximbank to facilitate and promote trade and investment flows between the two regions, and attract African investments into the Caribbean and Caribbean investments into Africa.
In that regard, it has conducted successful trade and investment missions to the Caribbean with African corporates and banks to explore opportunities in that market. Plans are advanced toward opening an Afreximbank office in the Caribbean, so that it can better-support Africa-Caribbean trade and investments.
With the mandate to forge greater partnerships, Afreximbank is seriously working jointly to push ahead with the pan-African trade and industrialisation agenda. These dynamic collective efforts are directed toward realising the shared developmental goals with Agenda 2063. Afreximbank remains alive to that responsibility with the African Union.
