Afreximbank earmarks $3.5bn to address Africa’s current adverse economic shocks
The African Export-Import Bank (Afreximbank) says it has earmarked more than 3.5 billion dollars to member countries to enable them adjust to current adverse economic shocks.
In a statement in Cairo on Tuesday, Afreximbank said the financing tagged “Counter-Cyclical Trade Liquidity Programme”, would enable eligible countries tackle low commodity prices and terrorism-induced costs.
According to the statement, the programme was approved by the bank’s board of directors at its quarterly meeting held in Seychelles on Dec. 12.
Afreximbank said it planned to attract other lenders and financiers to the programme in order to more than double the available funding.
It said 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.
Besides, it said “the programme will restore the confidence of the international market and commodity suppliers in the countries’ banking systems”.
“It will stabilise inflation rates and local currency exchange rates against foreign currencies and access to finance from the international market under favourable terms.”
It said the bank would begin requests totaling about two billion dollars within the next few weeks.
Dr Benedict Oramah, the President of Afreximbank, was quoted as saying that “the programme will provide unfunded facilities by way of guarantees, letters of credit and similar instruments to commercial banks in eligible countries.
“It will also make funded facilities available to enable the countries meet obligations under trade finance payment right 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.”
According to Oramah, it is Afreximbank’s response to the exceptional circumstances that demand urgent and decisive large-scale support.
He reiterated that the programme was to ensure that the continent was 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,” he said.
Afreximbank is the foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade.
The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors.
Afreximbank has approved almost 35 billion dollars in credit facilities for African businesses since 1994, including about 4.5 billion dollars in 2014.
Afreximbank has its headquarters in Cairo.