• Tuesday, April 16, 2024
businessday logo

BusinessDay

Afreximbank to address Africa’s $110bn equity financing shortfall

Afreximbank’s total assets rise 20% in one year

…inaugurates FEDA office in Kigali

The African Export-Import Bank (Afreximbank) has unveiled its Fund for Export Development in Africa (FEDA) office in Kigali, Rwanda.

FEDA was established to tackle Africa’s $110 billion financing gap for intra-African trade, value-added export development, and industrialisation value chains, with Rwanda being the first among 15 African nations to ratify its establishment agreement.

The event was graced by Edouard Ngirente, prime minister of Rwanda, accompanied by Benedict Oramah, president and chairman of the board of directors of Afreximbank, members of the board of directors of FEDA and Marlene Ngoyi, chief executive officer of FEDA.

Speaking at the inauguration, the prime minister said: “The establishment of FEDA in Rwanda reflects our commitment to not only fostering economic development within our borders but also to playing a pivotal role in the economic transformation of our continent. This initiative is a step closer to the realisation of the goals outlined in the Agenda 2063 of the African Union which lays great emphasis on the transformation of African economies and acceleration of economic growth on the continent.”

He noted that despite Africa’s significant resource endowments and contiguous markets, the continent had the lowest level of intra-regional trade in the world, adding that the continent’s share of the value created remained the lowest across many products and commodities due to sub-optimal value addition.

On his part, Oramah said, “FEDA adds to the pool of institutions helping Africa to create its capital base for development. With a focus on providing long-term, patient capital targeting all segments, from SMEs to corporates, and cutting across dynamic sectors of value-addition, services, and technology, FEDA is poised to drive Africa’s development under a new vision of de-commoditised, growth-oriented pathways underpinned by a dynamic private sector.”

He added: “The strategic importance of FEDA is becoming apparent just four years after it began operations. Funds under management under different strategies amount to about $800 million and FEDA is using some of these funds to create and mobilise additional funds. FEDA is also a co-promoter of a $500 million Africa Credit Opportunity Fund (ACOF) and is currently creating a $100 million Venture Capital Fund to focus on start-ups and SMEs with seed funding from Afreximbank.”

The inauguration was witnessed by over 150 guests drawn from the Rwandan government, the business and diplomatic community in Rwanda and representatives of the African Union and other regional economic and political bodies among others.

FEDA became the fund manager of the $1 billion AfCFTA Adjustment Fund in 2023.