Chinese $850 million for Africa set to expand trade

The African Export-Import Bank (Afreximbank) says the $850 million in financing facilities being made available to the Bank greatly expand its support to African businesses seeking to diversify and expand their trade activities.

This is indicated by President of Afreximbank Prof. Benedict Oramah commented about the $850 million recently provided to the Bank by two Chinese financial institutions.

Report shows that China-Africa trade grew from a mere $765 million in 1978 to $170 billion in 2017, an increase of more than 200 times.

Prof. Oramah, who was reporting on the Bank’s participation in the recently concluded Forum for China-Africa Cooperation (FOCAC 2018), held in Beijing from 3 to 4 September, noted that the Bank used the opportunity of that event to sign agreements for a $500-million facility with the China Development Bank and a $350-million facility with Bank of China.

The China Development Bank facility is to enable Afreximbank support trade enabling infrastructure projects across Africa while the $350 million from the Bank of China is targeted at direct bank-to-bank loans, participation in syndicated loans and trade finance, among others.

The Bank of China agreement followed the signing of a memorandum of understanding (MoU) between the Chinese bank and Afreximbank. Under the terms of the MoU, the two institutions committed to collaborating in the identification of co-financing and co-investing opportunities; cooperating in projects and transactions to enhance trade and investment between China and Africa; and supporting projects under the “Belt and Road” Initiative in order to bring shared development opportunities to China and Africa.

The President said that Afreximbank took advantage of the participation to hold meetings with several high-level personalities, including Presidents Macky Sall of Senegal, Faure Gnassingbé of Togo and Denis Sassou Ngueso of the Republic of Congo

The delegation also met with Zhang Qingsong, the new President of China Exim Bank, to discuss areas of collaboration. That meeting made the Afreximbank delegation the first to be formally received by the China Exim Bank President in his new role.

A similar meetings were held with Liqun Jin, Chairman and President of the Asian Infrastructure Investment Bank and Liu Liange, President of Bank of China.

The Afreximbank delegation also met with Jack Ma, Chairman of the Alibaba Group, to hold discussions on areas of possible collaboration.

Afreximbank is the foremost pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors.

Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organization, and the Charter, which governs its corporate structure and operations.

Since 1994, it has approved about $60 billion in credit facilities for African businesses, including about $8.5 billion in 2017. Afreximbank had total assets of $11.9 billion as at 31 December 2017 and is rated BBB+ (GCR), Baa1 (Moody’s), and BBB- (Fitch). The Bank is headquartered in Cairo.