Afreximbank to double asset base to US$60bn

THE African Export and Import Bank (Afreximbank) plans to double its balance sheet size to US$60 billion in less than 6 years, the bank’s President Professor Benedict Oramah told delegates attending the 30th Afreximbank Annual Meetings (AAM2023) underway here.

Speaking at the official opening ceremony of the AAM2023 on Monday, Professor Oramah said while it took 30 years for the bank to reach an asset base of US$30 billion, it would take fewer years to double it.

“I make this projection with faith in your trust and confidence, and also because we commence the journey into the next 30 years on a platform of a (mother) that has birthed many off-springs, offering services from project preparation to market access services, operating in our new larger continent of Afri-Caribbean,” said Professor Oramah.

He said the history of Afreximbank was clear proof that the continent could only develop in the direction it chooses by having well-resourced and professionally run institutional arrangements it owns and controls.

Professor Oramah highlighted some of the bank’s initiatives that include the Pan-African Payment and Settlement System (PAPSS), which will save the continent US$5 billion in transaction costs.

PAPSS “will also expedite and enable payments for intra-African trade in African currencies,” said Professor Oramah.

“Very soon, we will domesticate all intra-African payments and extend the same to CARICOM (Caribbean Community), where just a few days ago, the association of CARICOM Central banks adopted PAPSS as their preferred payment infrastructure for a pilot project.

Afreximbank backs the clearing and settlements with an amount of US$3 billion.

Afreximbank also introduced an integrated regional transit guarantee scheme, which allows goods to move across multiple African borders under one Transit bond, significantly reducing border delays and transit costs.

The scheme is currently operational in the Common Market for Eastern and Southern Africa (COMESA) region and supported by a US$300 million Guarantee limit by Afreximbank.

“We expect the scheme to go continent-wide in due course, with the global limits expanded to a billion US dollars,” said Professor Oramah.

Apart from PAPSS, the Transit Guarantee Scheme, and the intra-Africa Trade Fair, Afreximbank is doing much more to support the AfCFTA implementation.

To deal with the considerable intra-Africa trade finance gap, Afreximbank disbursed over US$20 billion over the 5 years to 2021 and projects to double this to US$40 billion in the five years to 2026.

Further, Afreximbank and the AfCFTA Secretariat have established the US$10 billion AfCFTA Adjustment Fund intended to, among others, compensate eligible countries for tariff revenue losses arising from the new trade regime while also supporting the private sector to adjust in an orderly manner to the new arrangement.

Professor Oramah said self-reliance could only be built on a robust and dynamic domestic economy that produces what it consumes.

“If we don’t produce the goods that can be traded within the continent, others would [do so] and export the jobs, wealth, and the continent’s prosperity.

” It is in that context that the Bank is proactively mobilising continental and global resources and partnerships to build industrial complexes across Africa,” he said.

Officially opening the AAM2023, Ghana President Akufo-Addo said this year’s annual meetings “is particularly special for us in Ghana, for the bank, for the continent, in fact, I should say for the world.”

He said the presence of delegates from the Caribbean and Americas, made this year’s annual meetings of the Afreximbank, a truly continental event.

He said the Afreximbank was not just a great African institution committed to history but also a financial institution very committed to the development of the African continent.

He said when dealing with powerful financial institutions, it’s important to have your own powerful financial institution of which Afreximbank is one such.

The establishment of the AfCFTA Adjustment Fund and implementation of the PAPSS are positive steps for the continent’s rapid growth and development, President Addo said.

He called for more investments in the Afreximbank which he said is akin to investing in “own growth” and the development of our own countries.

“Now more than ever it has become urgent to take the necessary steps to transition towards becoming a resilient content,” said President Addo.-ebusinessweekly