The African Export-Import (Afrexim) Bank has introduced a trade facilitation programme designed to reduce trade financing gap in Africa.
This is even as it charged Nigerian banks to explore its credit lines as option for managing capital adequacy and liquidity issues in trade financing deals.
The bank’s Executive Vice President, Business Development and Corporate Banking, Mr Amr Kamel, made the disclosure during a road show organized by the bank on Monday in Lagos.
Represented at the event by Ademola Adeyinka, a Consultant to Afreximbank on Financial Institutions/Trade Finance, Kamel told the participants that the purpose of the road show was “to formally present to you our trade facilitation programme”.
The corporate banking expert said that the bank had a number of programmes which it thinks can further open up business opportunities for the financial institutions present at the event.
He explained: “We are still very enthusiastic to do more in Nigeria. We want the financial institutions to see us as solution provider particularly when there are capital constraints or certain other issues that you may need to address”.
Kamel disclosed that so far the bank had provided about $17 billion in loan to the Nigerian market, adding that currently the bank has over $4 billion that is still running in the market and sees the Nigerian market as a very strategic one for its trade financing programmes.
The banker pointed out that Africa’s low share in global trade and inadequate funding of trade finance demands by international lenders necessitated the creation of the Afreximbank Trade Facilitation Programme (AFTRAF).
He clarified further: “The first reason is because Africa currently is the home to five of the fastest growing economies in the world. Also within this African continent we have 14 economies that are growing at a GDP rate of over five percent.
“Over the last decade African trade has increased three folds. Currently, it is estimated to be in the region of $1.5 trillion. It is an extraordinary figure which is expected to continue on a 10 percent year-on-year growth rate.
“So if we look at this statistics, there is a lot that is happening through Africa but there is so little that we are doing either as African financial institutions or African corporate, and this is making our own share of the global trade to be very insignificant.
“Currently, African share of the global trade is less than five percent. It is somewhere between three and five percent and we think we should do more. The figure is low primarily because African economy is still commodity based”, he added.
To implement the trade facilitation programme, Kamel said that Afreximbank puts almost $2 billion into it to support the African economies.
