The role of the African Export-Import Bank in the AU Agenda 2063

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At the 12th Special Summit on Industrialization and Economic Diversification and Special Session held in Niamey in late November, the African Export-Import Bank delivered a key report on the pace of economic diversification and industrialization in Africa. It was one of several review reports dealing with Africa’s present and future.

First, the African bank provides strong financial support, participates in external fundraising campaigns, and collaborates with the African Union and AU members. Beyond that, the bank provides advisory services related to the development of various economic sectors, all in an attempt to improve conditions, as advocated in the “Agenda 2063: the Africa we want” shared in Africa.

With various initiatives and programmes, Afreximbank has bravely and determinedly sought to use the necessary high-level platforms inside and outside Africa to raise the necessary funds for development. What is required here for African leaders to show good governance, design and implement the best policies and speak with one voice to make AU Agenda 2063 a reality.

While the bank has done a lot in recent years, not many African leaders have achieved what was expected. That Afreximbank intervened forcefully during the COVID-19 pandemic, disbursing more than $8 billion to central and commercial banks to prevent impending commercial debt defaults and to support the acquisition of test kits, PPE and other materials of containment of COVID-19.

Afreximbank supported the first joint procurement of African Union members in an emergency when it provided $2 billion in financing for the procurement of 220 million doses of Johnson and Johnson vaccines.

And as the Russia-Ukraine crisis continues, the bank has also stepped up, already shelling out more than $5 billion for food, fertilizer and grain procurement. Beyond that, the bank is working closely with UNECA, the AU and the AfCFTA Secretariat to create a joint procurement platform called the Africa Trade Exchange (ATEX), which is helping African countries procure grains, edible oils and fertilizers at a very low price. cost.

It continues to support the implementation of the African Continental Free Trade Agreement (AfCFTA). Over the five years to 2021, Afreximbank disbursed more than $20 billion in support of intra-African trade and investment and plans to double this to US$40 billion over the five years from 2022 to 2026.

Afreximbank is helping African economies manage the exodus of international banks by funding African-owned financial institutions to acquire those banks, helping to build a strong interconnected African financial system. He is recreating banking systems so they can better serve Africa. It also brought around 500 of the mainland’s 600 regulated commercial banks into the Afreximbank Trade Finance Facility (AFTRAF) and provided them with confirmation lines of trade credit.

The goal is to provide a total of $8 billion in trade confirmation lines to these African banks and to ensure that every country on our continent has at least one bank that has a dedicated line of credit to support intra-African trade. Afreximbank is today at the center of the most extensive messaging network, with connections to almost 500 banks. It has built a network that will form the architecture of an integrated African banking network.

These mentioned above are the bank’s efforts to support Africa’s economic development prospects defined by the degree of control the continent exercises over its financial system, that it is access to and control of capital that defines the continent’s future.

As partners, Afreximbank, the African Union Commission and the AfCFTA Secretariat have launched the business operations of the Pan African Payment and Settlement System (PAPSS). It is now possible to make intra-African trade payments in African national currencies. The bank is proud to support settlements under this system with a facility, thanks to the leadership of the African Union and the Commission for their strong support for this transformative initiative.

Afreximbank is working with the AfCFTA Secretariat and the Council of Trade Ministers to establish the AfCFTA Adjustment Fund. The Fund is expected to help countries adjust to AfCFTA tariff removals in an orderly manner and prepare them to participate in the new trade regime. Earlier this year, the Bank was appointed Administrator of the $10 billion Fund, which it is supporting with a $1 billion credit line and a $10 million grant directed to the Core (Compensation) Fund.

With industrialization, the bank is working with various African governments to develop and expand Industrial Parks (IPs) and Special Economic Zones (SEZs) to address infrastructure constraints for industrialization. These parks are ongoing in ten African countries, including two parks in Malawi and one in the Ivory Coast under development. It has also initiated discussions for the creation of industrial parks in the Democratic Republic of the Congo, Zambia, Rwanda, Kenya and Botswana.

At the first Africa-Caribbean Summit in 2021, Afreximbank took steps to speed up the integration of the two regions. In early September, the first Africa-Caribbean Trade and Investment Forum was held, attracting more than 1,000 participants from Africa and the Caribbean.

Since then, some 9 of the 14 CARICOM countries have signed an Association Agreement, a treaty instrument similar to the Afreximbank Establishment Agreement, thus opening the region to bank interventions. This partnership creates an opportunity for Afreximbank to facilitate and promote trade and investment flows between the two regions and attract African investment to the Caribbean and Caribbean investment to Africa.

In this sense, it has carried out successful trade and investment missions to the Caribbean with African companies and banks to explore opportunities in that market. There are advanced plans to open an Afreximbank office in the Caribbean so that it can better support trade and investment between Africa and the Caribbean.

With a mandate to forge greater partnerships, Afreximbank is seriously working together to advance the pan-African trade and industrialization agenda. These dynamic collective efforts are directed towards the realization of the development goals shared with Agenda 2063. Afreximbank lives on in that responsibility with the African Union.

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