Afreximbank Earmarks $41bn To Finance Local Vehicle Manufacturers, Support Intra-African Trade

The African Export-Import Bank (Afreximbank) has earmarked $1bn to fund local vehicle manufacturers in the continent.

The bank has also doubled its financing for intra-African trade from $20bn to $40bn, the Executive Vice President of intra-African Trade, Afreximbank, Kanayo Awani said.

Awani made the disclosure on Monday at IATF 2023 Business Road Show in Lagos with the theme, ‘Positioning Nigeria to Harness the Opportunities at the African Continental Free Trade Area,’ monitored by THE WHISTLER.

The road show aims at creating awareness for Nigerian businesses ahead of the IATF – Intra-African Trade Fair 2023 in Cairo, Egypt between November 9-15, 2023.

The Executive VP said Nigeria is a big market, however, she noted that there are markets outside of the country that Nigerian businesses could benefit from.

Awani said to optimize the benefits of the African Continental Free Trade Area (AfCFTA), the bank has put in place a range of financing and products in its support.

The AfCFTA is a bloc of over 1.3 billion people which has been ratified by over 47 African nations as of August this year.

The IATF is one of the tools adopted by Afreximbank to bridge issues like information asymmetry among companies in the continent.

Businesses in the continent remain unaware of the opportunities that exists in each country but more aware of opportunities available in other continents, she said.

She said, “If I were to ask a Ghanian footware manufacturer to source leather, he is most likely to look to New Zealand and South America for supply yet, countries like Nigeria, Ethiopia, Burundi and Sudan have the supply capacity to meet this demand.

“West Africa alone imports meat products worth more than $3bn annually from Argentina and Australia but meat is abundant on the continent. South Africa, Botswana, Zambia, Mali, Namibia, Chad and Sudan can supply a large proportion of this demand. But how can a trader in Lagos know the needs of a consumer in Lusaka?”

The bank’s EVP said the IATF has the capacity to bridge the information asymmetry and has opportunities for Nigerian business.

The EVP said, “We at the bank intend to double our financing for intra-African trade to $40bn on a revolving basis by 2026 up from $20bn. Between 2017 and 2021, we disbursed $20bn for intra-African trade alone on a revolving basis.

“We are also working with the AfCFTA secretariate to put in place AfCFTA adjustment fund to facilitate and provide support, financing and technical assistant grants and compensation funding to AfCFTA parties and also to private enterprises to adopt and effectively participate in the AfCFTA.

“The board of the Afrexinbank approved $1bn to support the funding of this initiative and actually offered a $10m grant that will facilitate the establishment and operationalization of the fund. It is open to private sector business who want to retool and expand to take advantage of the opportunities.”