The African Export-Import Bank
(Afreximbank) is to implement a new strategy aimed at driving industrialization
across Africa and increasing intra-African trade by at least 50 per cent in the
next five years.
The Afreximbank Intra-African Trade Strategy,
approved by the Board of Directors at its quarterly meeting in Johannesburg on
Saturday, will see the Bank work with partners to ramp up trade among African
countries to $250 billion from its current level of about $170 billion by 2021.
The strategy will involve expanding
existing trading activities within Africa’s regional economic communities,
integrating informal trade into formal frameworks, reducing trade barriers and
minimizing the foreign exchange costs of intra-African trade.
“Intra-regional trade will drive
value addition in Africa and help reduce the continent’s dependence on
commodities,” said Dr. Benedict Oramah, President of Afreximbank, following the
approval of the strategy. “It would also allow for the expansion of domestic
trade value chains, thereby strengthening the capacity of African economies to
resist economic shocks”.
“The fact that about 40 per cent of
intra-African trade is done in the informal sector shows that there are institutional
gaps,” continued the President. “Afreximbank intends to play a significant role
in reducing these barriers, by promoting the emergence of export trading
companies and by helping to resolve regulatory and policy issues through a
deepening of partnerships and bilateral trade arrangements.”
Information released by Afreximbank
after the approval of the strategy showed that it will be centered on three
core pillars, namely, Create, Connect and Deliver.
Under the create pillar, the Bank will support the expansion of the
production, processing and export capabilities of African economies with trade
finance instruments, for import of investment goods, project finance, lines of
credit, export development finance and guarantees, and will provide project
financing to construct infrastructure for the services sectors and for the
development of industrial parks.
The connect pillar will consist of initiatives to provide a facilitative
environment to increase the flow of goods and services, including facilitation
of linkages with public and private entities, institutions, agents and
entrepreneurs along the trade value chain. It will also involve support for
export trading companies the launch of an Intra-African trade payment platform
using a clearing arrangement operated by the Bank that will reduce foreign
currency costs of the trade.
For the deliver pillar, Afreximbank will deepen access of traders to
African markets by creating effective and cost-efficient distribution
mechanisms through the financing of transport logistics and storage
infrastructure.
To support the Intra-African Trade Strategy, the Board of Directors also
approved a revised local currency programme that will allow the development of
yield curves via African currencies, which will encourage greater use of local
currencies, thereby further reducing the foreign exchange cost of intra-African
trade transactions.
Afreximbank plans to hold a formal
unveiling of the Intra-African Trade Strategy during an Intra-African
Trade Forum scheduled to hold in Abidjan in May.
Manal Mounir Hendy
Associate
External Communications
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