South Africa secures $14bn Afreximbank deal amid xenophobic attacks

South Africa has secured a US$14 billion investment programme from the African Export Import Bank (Afreximbank) to boost industrial growth, expand trade and strengthen economic ties across Africa, as renewed xenophobic attacks raise concerns about the country’s standing as a regional business hub.

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The memorandum of understanding, signed in Alamein, Egypt, marks a major step in the partnership between South Africa and Afreximbank following the country’s accession to the bank’s Establishment Agreement earlier this year. The programme combines financing with technical and advisory support to help drive the country’s economic priorities while deepening regional integration under the African Continental Free Trade Area (AfCFTA).

The agreement was signed by George Elombi, Afreximbank president and chairman of its board of directors, and Mpho Parks Tau, South Africa’s minister of trade, industry and competition.

The funding will support projects in industrial infrastructure, energy generation and transmission, manufacturing, mineral processing and transport infrastructure needed to improve trade within Africa.

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A key feature of the programme is a US$3 billion Inclusive Development Support Programme, designed to improve access to finance for previously disadvantaged communities. The initiative aims to expand economic participation, create wealth and tackle long standing structural inequalities.

George Elombi described the agreement as an important milestone in the bank’s relationship with South Africa.

“With this memorandum of understanding, Afreximbank and the Republic of South Africa have taken a significant step to strengthen our partnership to support South Africa’s development priorities and advance Africa’s economic integration,” he said.

He added that the programme would attract investment into strategic sectors, encourage local processing of mineral and agricultural products, expand trade between South Africa and the rest of Africa under the AfCFTA, promote South African investment across the continent and strengthen financial inclusion.

“The country programme also allows Afreximbank to extend its development footprint across the entire continent,” Elombi said.

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Mpho Parks Tau said the partnership would also help speed up implementation of the AfCFTA by strengthening regional value chains and removing barriers that continue to limit the movement of goods, services and capital across Africa.

“The MoU also seeks to advance the implementation of the African Continental Free Trade Area by promoting stronger regional value chains and addressing cross border constraints that continue to inhibit the free flow of goods, services and capital across the continent,” the minister said.

Beyond financing, the agreement includes plans to relaunch the South Africa Africa Trade and Investment Promotion Programme (SATIPP) 2.0, support the creation of a South Africa Exim Bank, finance industrial parks and Special Economic Zones, invest in renewable and conventional energy projects, expand mineral processing and provide technical assistance and institutional support.

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The programme is aligned with South Africa’s National Development Plan 2030, the Medium Term Development Plan and the government’s Growth and Inclusion Implementation Plan.

The announcement comes at a time when South Africa is facing renewed scrutiny over xenophobic violence targeting foreign nationals. While the investment programme underscores confidence in the country’s economic potential, the attacks have raised questions about the business environment and the country’s ambition to position itself as a leading manufacturing and trade gateway for the African continent.

For Afreximbank, the agreement reinforces its growing role in financing Africa’s industrial transformation. For South Africa, it represents a significant opportunity to expand manufacturing, attract investment and increase trade with the rest of the continent under the AfCFTA.