African Export-Import Bank (Afreximbank) says it is poised at disbursing $40 billion to support intra-African trade over the next five years, building on the $20 billion disbursed in the past five years.
Professor Benedict O. Oramah, President and Chairman of the Board of Directors, Afreximbank said “We are also providing Letters of Credit Confirmation lines to African commercial banks to support cross-border trade.”
“It is our aim to onboard 500 banks with aggregate lines of over eight billion US Dollars. The bank has so far onboarded nearly 480 and is today the bank with the widest messaging links with African Banks,” he announced at the opening of the second edition of the Intra-African Trade Fair (IATF2021) being held here.
The week-long event is being organised by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat.
Over 10,000 participants from across Africa are attending with US$40 billion of trade and investment deals expected to be concluded at the event.
Prof.Oramah said the bank together with the African Union and the African Continental Free Trade Area AfCFTA Secretariat, have created a Pan-African Payment and Settlement System (PAPSS) to facilitate cross-border payments in national currencies.
Seven African heads of state attended the opening ceremony.
“We are working with the AfCFTA Secretariat to create an eight billion US dollar AfCFTA Adjustment Facility that will cushion African countries from fiscal revenue losses from the tariff removals associated with the AfCFTA and to help the private sector to retool their operations as they reorient their operations towards the continental market,” he said.
The System, which is currently piloting in the West African Monetary Zone (WAMZ), he said, would strengthen national currencies, integrate Africa’s payment infrastructure, and save the continent about five billion US dollars in transfer charges.
“Above all, it will return to Africa, large volumes of trade diverted away from the continent due to currency issues. Afreximbank is supporting the pilot in an amount of 500 million US dollars and expects to expand this to three billion US dollars when fully adopted across Africa,” he said.
On the ongoing trade fair, he said, it would open the African market to African businesses adding that “it will enable us to build trust amongst ourselves, open investment opportunities that we never knew existed and begin to foster the emergence of regional value chains.”
“It is the trade information flow that the trade fair will facilitate, that will bring down the 87,000 kilometres of borders that divide us. It is the Trade Fair that can help us to begin to reverse some of the absurdities we see today in Africa’s trade patterns whereby many African countries import from outside Africa at a much higher cost the same products a neighbouring African country exports to the world at a lower price.
“This is why I once said: The political act of signing the AfCFTA will not open borders, nor will it make Kenyan shoe manufacturers buy their hides from Burundi, around the corner, instead of New Zealand, thousands of miles away! Sloganeering and waving the AfCFTA flag are good for morale but will not bring down the border between Nigeria and the Benin Republic, nor will it make it easier for an Egyptian Coffee roaster to buy Ugandan coffee directly from Uganda, instead of, from Italy.”
Reversing these anomalies, Professor Oramah said would require a deliberate effort to connect African buyers and sellers, deepen knowledge of Africans about their continent by facilitating least cost access to trade and investment information.
Olusegun Obasanjo, former President of Nigeria who is also the chairman of IATF, in his remarks said Africa needed to achieve economic emancipation and self-reliance.
He said trade and investment was the only way the African continent could realise its dream of economic development.
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