A financing programme by the African Export-Import Bank
(Afreximbank) to provide more than $3.5 billion to its member countries to
enable them adjust to current adverse economic shocks, especially commodity
price and terrorism-induced ones, has received the blessings of the Bank’s
Board of Directors.
The Counter-Cyclical Trade Liquidity Programme, approved by
the Board of Directors at its quarterly meeting held in Seychelles on 12
December, has an initial life of two years and allows Afreximbank to deploy up
to 40 per cent of its approved annual gross commitment limit to providing trade
finance liquidity to central banks and selected commercial banks in eligible
countries, with the available funding for 2016 totaling some $3.5 billion.
In information
released after the approval, Afreximbank said that it planned to attract other
lenders and financiers to the programme in order to more than double the
available funding.
The programme will provide unfunded facilities, by way of
guarantees, letters of credit and similar instruments, to commercial banks in
eligible concerned countries. It will also make funded facilities available to
them to enable them meet obligations under trade finance payment rights that
fall due but which they are unable to meet due to non-availability of foreign
exchange from their central banks or usual markets.
“This facility enables us to help our member countries
bridge the significant trade financing gap confronting them as a result of
current economic shocks until normal funding conditions are restored,” said Dr.
Benedict Oramah, President of Afreximbank. “It is Afreximbank’s response to the
exceptional circumstances that demand urgent and decisive large-scale support
to ensure that the continent is not thrown into recession due to a sudden
drying up of trade flows. It also helps
us to minimise the potential impact on normal bank operations.”
“We expect to learn valuable lessons from the implementation
of this programme as we prepare to deal with future market disruptions,”
continued the President, who noted that the programme gave Afreximbank
additional flexibility in its lending through fast disbursement facilities
which would help in making its interventions more effective in minimizing the
risk of country trade payment defaults.
Afreximbank expects
the positive impact of the programme in the eligible countries to include
continued supply of raw materials, capital goods and essential goods into the
markets; restored confidence of the international market and commodity
suppliers in the countries’ banking systems; stabilisation of inflation rates
and local currency exchange rates against foreign currencies; and access to
finance from the international market under favourable terms.
With the approval,
the Bank expects to process requests totaling about $2 billion within the next
few weeks as a result of requests received from a number of central and
commercial banks.
Obi Emekekwue
Afreximbank External Communications
E-Mail: oemekekwue@afreximbank.com
Tel. +202-2456-4238
No comments:
Post a Comment
Please restrict your comment to the subject matter.