AfDB to remain supportive of Afreximbank’s efforts to advance intra-African trade

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    Harare – The African Development Bank (AfDB) says it will remain supportive, steadfast and strong in its assistance towards the African Export-Import Bank (Afreximbank) efforts to advance intra-African Trade.

    Over the years, Afreximbank has become a reputable and solid regional development finance institution, meeting significant financing needs in trade development and trade finance in Africa.

    The bank has particulary been supportive to Zimbabwe at all times and in December the bank promised to avail $1.5 billion in loans to the current government.

    Afreximbank and AfDB have enjoyed a collaborative and productive relationship since its inception 25 years ago.

    In recent years, AfDB has supported Afreximbank with trade finance packages of $450 million in 2017, $280 million in 2014, a $150 million Line of Credit in 2010 as well as a $250 million support package to mitigate trade risk.

    In a press release on AfDB website on Tuesday, AfDB President Akinwumi Adesina assured the bank’s continued assistance for the export-import bank’s continued growth.

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

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

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

    Adesina said there is need for Africa to be smarter and faster in responding to growing opportunities and emerging challenges faced by majority of the continent’s small businesses especially in the trade finance space.

    The signing of Africa’s Continental Free Trade Area (AfCFTA) agreement in March 2018 by the majority of African countries will enable Africa to trade more with itself and also enhance the continent’s attractiveness as an investment destination.

    African countries are showing resilience as exemplified in the share of intra-African trade, which has increased from 10 percent in 2000 to 16 percent last year.

    Adesina also said since the AfCFTA was signed, AfDB has earmarked US$ 4.5 million to help boost intra-African trade and create more synergies with the Bank’s High 5 priorities.

    The High 5 priorities crucial for accelerating Africa’s economic transformation are Light up and power Africa, feed Africa, industrialise Africa, integrate Africa and improve the quality of life for the people of Africa

    “We need to significantly expand intra-African trade. For example, the equivalent figure for Europe is close to 80 percent. For this to happen, Africa needs to be bolder in its approach and broaden its appeal by reducing administration and transaction costs, especially at borders, as well as overcome market segmentation and improve the overall investment climate.”

    Adesina added that the 2018 Annual Meetings and 25th Anniversary of Afreximbank in Abuja witnessed a critical US$500,000 grant agreement collaboration between the AfDB and Afreximbank.

    The project, funded by the Fund for Private Sector Assistance (FAPA), is aimed at promoting the development of ‘factoring’ as an alternative trade finance instrument in Africa.

    “If Africa is to integrate and improve the living standards of its people, we must use innovative financial solutions such as factoring and credit insurance, which offer keys to unlock the growth of small and medium-sized enterprises in Africa,” President Adesina added.

    He spoke on how finance and investments are at the very sharp end of economic transformation, pointing out that the Bank is opening another highway to African investment through the Africa Investment Forum (AIF), scheduled for November 7-9, in Johannesburg.

    “The Africa Investment Forum, Africa’s investment marketplace, will provide a unique platform for investment negotiations, finance, transactions, and a marketplace for closing deals to accelerate the economic development of Africa.”

    Economic analysts agree that Africa is in a hurry because it is hungry for economic transformation and must move quickly from old methods of intervention in dealing with emerging challenges and taking advantage of opportunities.

    EQUITY AXIS NEWS

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