Afreximbank and ECIC pledge $1bn to expand trade between SA and other African countries
The African Export-Import Bank and the Export Credit Insurance Corporation of SA are launching a billion-dollar programme to promote trade and investments
Headquartered in Cairo, the African Export-Import Bank (Afreximbank) and the Export Credit Insurance Corporation (ECIC) of SA have entered into a memorandum of understanding (MOU) to launch a $1bn (R12bn) financing programme to promote and expand trade and investments between SA and the rest of Africa.
Afreximbank and the ECIC will jointly implement the South Africa-Africa Trade and Investment Promotion Programme.
The programme will focus on the identification, preparation and appraisal of trade transactions and projects; exploration of co-financing and risk-sharing opportunities; and knowledge-sharing work, with particular emphasis on intra-African trade matters through technical cooperation, staff exchange, research and joint events.
SA, which joined Afreximbank as a shareholder in November 2017 and named the ECIC as its designated investor, is eligible for the bank’s trade promotion programmes and financial services.
Afreximbank president Dr Benedict Oramah said during the signing ceremony: “In line with our strategy, Impact 2021: Africa Transformed, which prioritises intra-African trade, industrialisation and export manufacturing, we decided to develop this joint programme as it provides a platform for the realisation of our strategic objectives while also aligning with SA’s strategic goal of expanding trade with the rest of Africa.”
Dr Oramah said that in addition to being Africa’s most industrialised country and a regional manufacturing hub with one of the largest and most diversified economies in the continent, SA also accounted for the largest proportion of intra-African trade for exports (24.5%) imports (15.4%).
He said the joint initiative would support businesses through capacity-building and market-information initiatives; help small and medium-sized businesses join regional supply chains; and provide advisory services and guarantees to South African investors seeking trade and investment opportunities in Afreximbank African member states.
ECIC CEO Kutoane Kutoane said that joining Afreximbank as a shareholder had made it possible for SA to widen its access to other African markets.
Beyond the ECIC’s mandate to increase the volumes of South African exports, the institution was committed to contributing to Africa’s industrialisation in an inclusive manner.
“We realise that one of the best ways to enhance our exporting capabilities as a country is by intensifying mutually beneficial trade with the rest of the continent,” said Mr Kutoane.
Kanayo Awani, MD of Afreximbank’s intra-African trade initiative, said the new trade and investment programme offered numerous opportunities to SA-based entrepreneurs expanding to the rest of Africa, including trade and project financing, guarantees, twinning or business-matchmaking services, export logistics facilitation, capacity building, and trade information and advisory services.
Implementation of the MOU will involve technical teams from the two institutions collaborating in identifying trade transactions and projects eligible for financing.
This article was paid for by the ECIC.