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Afreximbank to finance local vehicle manufacturers in Africa with $41bn

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 the IATF 2023 Business Road Show in Lagos with the theme, “Positioning Nigeria to Harness the Opportunities at the African Continental Free Trade Area”.

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 that 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 that 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 on the continent.

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 $3 billion 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 $20 billion for intra-African trade alone on a revolving basis.

“We are also working with the AfCFTA secretariat to put in place an AfCFTA adjustment fund to facilitate and provide support, financing, 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 Afrexinbank approved $1 billion to support the funding of this initiative and actually offered a $10 million grant that will facilitate the establishment and operationalization of the fund. It is open to private sector businesses that want to retool and expand to take advantage of the opportunities.”

Techrectory

See also Founders Factory Africa: $144M Secured for Gender Disparity in the VC Ecosystem

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