Afreximbank introduces facility for investors to secure contracts from international banks

The African Export-Import Bank (Afreximbank) said it has introduced a special guarantee facility to enable African processing plants secure long-term export contracts from international banks at the bank’s 22nd Annual General Meeting of Shareholders in Lusaka.

Jean-Louis Ekra, the President of the bank, said the “Contract Availability Guarantee” facility would enable international banks to support the financing of African processing plants.

The facility would cover the risk associated with situations where the contract against which financing had been provided became unavailable after an agreed period.

Ekra said the bank had introduced customer-due diligence platform for the conduct of due diligence checks on bank counterparties in Africa.

He said the aim was to reduce the cost of compliance for banks financing African trade.

“Africorrbanking has been introduced to enable Afreximbank share partially or fully the credit risk of African banks opening letters of credit to be confirmed by international banks.”

“It is imperative for African governments to expand investments in the development of infrastructure that directly supported productive sectors, particularly utility and the expansion of ports and harbours,” he said.

He said there was an urgent need to strengthen Africa’s financial sectors to mobilize domestic savings and expand access to affordable credit for agro processing and manufacturing industries.

Ekra advised governments to actively invest in the training and development of technical skills as part of capacity building to strengthen operations and implementation of projects in technical ministries.