The African Export-Import Bank (Afreximbank) on Sunday added an insurance product, known as AfrexInsure, to its portfolio of banking products, to reduce generational trade and infrastructure deficit.
Africa’s annual trade and infrastructure financing gap is put at $120 billion and $100 billion respectively. “Adding insurance to the group’s portfolio will help ensure the availability of financing, ” said Benedict Oramah, president and Chairman of the Boards of Afreximbank at the official launch of AfrexInsure in Accra Ghana.
Represented by Kanayo Awani, executive Vice President, Intra-African Trade Bank at Afreximbank, he said the AfrexInsurance will de-risk large projects and crowd in the investment required to develop the infrastructure networks necessary for development of trade and commerce across the African continent.
He said it will bring new impetus to the issue of low insurance penetration in Africa particularly where it is fundamental to trade development of the bank.
According to him, the introduction of insurance offerings will complement other initiatives of the bank and advance the implementation of African Continental Free Trade Agreement (AfCFTA).
“It will ensure a comprehensive offering of trade solutions that is fully aligned to African development ambitions and ensure that insurance premiums and African capital is retained on the continent.
“I am therefore especially pleased to mark another milestone in the development of Afreximbank and indeed our continent today. As financial services evolve to stimulate value creation for our economies, we remain focused on reducing the continent’s trade deficit using our capital and financial solutions. Our services delivered through co-creation with our partners will ensure that the impact we desire is achieved for the prosperity of the continent and for generations to come,” he said.
The bank at the event unveiled Afrexim Insurance Management Company, AfrexInsure. As a fully licensed and regulated entity, AfrexInsure will facilitate the development of specialty insurance in Africa.
He noted that infrastructure deficits continue to hamper African trade growth, as air transportation remains prohibitively expensive, and rail transport is often not an option due to the absence of rail infrastructure. Road and maritime transportation, which dominates African trade is often not suitable for many products due to their relatively short perishable lives and in many instances a shortage of cross border road systems and transportation routes remain a challenge.