The African Export-Import (Afrexim) Bank has introduced a trade facilitation programme aimed at reducing trade financing gap in Africa.
The bank also charged Nigerian banks to explore its credit lines as option for managing capital adequacy and liquidity issues in trade financing deals.
Afrexim Bank’s Executive Vice President, Business Development and Corporate Banking, Mr Amr Kamel, disclosed this during a road show organized by the bank on Monday in Lagos.
Kamel, who was epresented at the event by Ademola Adeyinka, a Consultant to Afreximbank on Financial Institutions/Trade Finance, told the participants that the purpose of the road show was “to formally present to you our trade facilitation programme.
According to him, the bank has a number of such programmes which it thinks can further open up business opportunities for the financial institutions present at the event.
This is even as he hinted that the bank was enthusiastic to do more in Nigeria as it wants the financial institutions to see it as solution provider, particularly when there are capital constraints or certain other issues that needed to be addressed.
Kamel disclosed that so far that the bank had provided about $17 billion in loan to the Nigerian market, noting that currently, the bank has over $4 billion that is still running also within the market and sees the Nigerian market as a very strategic one for its trade financing.
Kamel 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 explained: “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.
Kamel hinted further that to implement the trade facilitation programme, Afreximbank had put almost $2 billion into it to support the African economies.