Afreximbank commits $40bn to support intra-African trade over 5years

… As Obasanjo calls for sustenance of Intra African trade fair

Afreximbank on Monday said it is committed to disbursing $40 billion to support intra-African trade over the next five years, building on the 20 billion US dollars disbursed in the past five years.

The commitment is in the backdrop of Africa’s determination to build its institutions as well as implementing the African Continental Free Trade Agreement (ACFTA).

Benedict Oramah, (Professor) President and Chairman of the board of directors of Afreximbank, disclosed this at the opening session of the ongoing 2021 Intra-African Trade Fair in Durban, South Africa.

He said the bank is also providing Letters of Credit Confirmation lines to African commercial banks to support cross-border trade.

“It is our aim to onboard 500 banks with aggregate lines of over $8 billion. The Bank has so far on boarded nearly 480 and is today the Bank with the widest messaging links with African Banks,” Oramah said.

Working with the African Union (AU) and the AfCFTA Secretariat, he said the bank has created a Pan-African Payment and Settlement System (PAPSS) to facilitate cross-border payments in national currencies.

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The System, which is currently piloting in the West African Monetary Zone (WAMZ), will strengthen national currencies, integrate Africa’s payment infrastructure, and save the continent about $5 billion in transfer charges.

Above all, he said it would return to Africa, large volumes of trade diverted away from the continent due to currency issues.

Oramah said Afreximbank is supporting the pilot in an amount of $500 million and expects to expand this to $3 billion when fully adopted across Africa.

According to him, the bank is piloting an African Collaborative Transit Guarantee Scheme that will facilitate an uninterrupted flow of goods across multiple borders with a single transit bond, operating on a risk-sharing platform with country-specific issuers and is committing 1 billion US dollars to the Scheme.

“We envisage that this Scheme will save the continent over $300 million in transit cost annually. And with it, goods can move from Cape to Cairo seamlessly, saving time and costs.

“We have created a Trade Information Portal that will complement the Trade Fair in availing information about market and investment opportunities across Africa. This Artificial Intelligence-enabled System will help develop predictable supply chains and enhance connectivity among African businesses,” he said.

In his welcome address, Olusegun Obasanjo, former President of the Federal Republic of Nigeria, and chairman of IATF noted that they were in South Africa two months to sign the IATF host country agreement.

It has been a very long journey characterised by a number of challenges ranging from postponement induced by Covid-19 pandemic, moving the venue from Kigali to Durban.

The IATF is the largest and booked trade and investment fair on the African continent. Trade is also one of the key initiatives in support of the implementation of the ACFTA. The ACFTA provides an opportunity for the continent to achieve economic emancipation on self-reliance.

“Despite the disruption caused by Covid-19 pandemic, the momentum created the first intra-African trade fair and launch of the ACFTA to drive intra-African trade and integration needs to be sustained”, Obasanjo said.