Dr. Benedict Okey Oramah, President of Afreximbank
Remarks Delivered by Professor Benedict Oramah, President of African Export-Import Bank (‘Afreximbank” or the “Bank”) At the 12th Extraordinary Summit on Industrialization and Economic Diversification and the Extraordinary Session on the AfCFTA Held in Niamey, Niger, On November 25, 2022.
Read below his speech
It gives me great pleasure to address you this morning. Afreximbank is most grateful for the strong support and collaboration with the African Union and Member states.
In good and bad times, many of you had believed in the mission and work of the Bank and provided extraordinary support when needed. It is on account of this support that Afreximbank has pursued with courage and determination, initiatives and programmes that directly address the needs of our people, as espoused in our shared “Agenda 2063: the Africa We Want.” It was on the platform of your support that Afreximbank intervened strongly during the COVID-19 Pandemic, disbursing over 8 billion US dollars to Central and commercial banks to avert looming trade debt payment defaults and support the procurement of test kits, PPEs and other COVID-19 containment materials. It was your trust and confidence that made it possible for Afreximbank to support the first ever pooled procurement by African Union Member States in an emergency, when it provided a 2 billion US dollar financing towards the procurement of 220 million doses of Johnson and Johnson COVID-19 vaccines. And as the Ukraine Crisis rages, your Bank has also stepped up and already disbursed over 5 billion US dollars towards the procurement of food, fertilizer and grains by Member States and businesses. Working with UNECA, the AU and the AfCFTA Secretariat, we have also created a pooled procurement platform called the Africa Trade Exchange (ATEX), that is helping African countries to procure grains, edible oils and fertilizers at a much reduced cost.
Your Excellencies, Honourable Ministers, it is also your trust and confidence that have paved its way for Afreximbank to continue to support the implementation of the African Continental Free Trade Agreement (AfCFTA). During the five years to 2021, Afreximbank disbursed over 20 billion US dollars in support of intra-African trade and investments and plans to double this to 40 billion US dollars during the 5 years 2022 tp 2026.
Afreximbank is helping African economies to manage the exodus of international banks by financing African owned financial institutions to acquire those banks, helping to build a strong interconnected African financial system. We are re-creating our banking systems so that they can serve Africa better. We have also onboarded about 500 of the continent’s 600 regulated commercial banks into our Afreximbank Trade Finance Facility (AFTRAF) and are providing them with Trade Credit Confirmation lines. Our goal is to grant an aggregate of 8 billion US dollars in Trade Confirmation lines to these African banks and ensure that every country on our Continent has at least one bank that has a dedicated credit line to support intra-African trade. Afreximbank sits today at the center of the most extensive messaging network, with connections to almost 500 banks. We have built a web that will form the architecture for an integrated African banking network. We do these because we are convinced that Africa’s economic development prospects will be defined by the extent of control the continent wields over its financial system. We understand that it is access to, and control of our capital, that will define our future.
As partners, Afreximbank, the African Union Commission and the AfCFTA Secretariat have launched the commercial operations of the Pan-African Payment and Settlement System (PAPSS). It has now become possible to conduct intra-African trade payments in African national currencies. Today, a Nigerian can buy a product from Ghana and pay in Naira. The Ghanian seller will receive in Cedi. Overtime PAPSS will spread across Africa. When that happens, we aim to save the continent at least 5 billion US dollars in transfer and settlement charges, while returning to our continent trades that are diverted to non-African markets due to use of third currencies to pay for intra-African trade. PAPSS constitutes the foundation on which strong and convertible national currencies will emerge, and Afreximbank is very proud to be backing settlements under this system with a facility which could reach an amount of 3 billion US dollars, when PAPSS goes fully continental. We thank the leadership of the African Union and the Commission for their strong support towards this transformative initiative.
We are also collaborating with the African Union Commission and the AfCFTA Secretariat to implement the biennial Intra-African Trade Fairs. The 20 million US dollar biennial event funded by the Bank, has become the premier marketplace for the promotion of cross border trade and investments. We invite all AU Member States to participate in the 3rd edition to be held in Abidjan, Cote d’Ivoire in November 2023. Cairo and Durban hosted very successful inaugural and 2nd editions, respectively.
Afreximbank is working with the AfCFTA Secretariat and Council of Ministers for Trade to establish the AfCFTA Adjustment Fund. The Fund is expected to help countries to adjust in an orderly manner to AfCFTA tariff removals and prepare them to participate in the new trading regime. The Bank was earlier this year appointed the Fund Manager of the 10 billion US dollar Fund, which it is supporting with a 1 billion US dollar facility and a 10 million US dollar grant directed at the Base (Compensation) Fund.
Your excellencies,
Afreximbank is actively facilitating the harmonisation of Standards for major tradeable goods in Africa through grant financing and technical assistance programmes. Your Bank, working with the Africa Regional Standards Organisation (ARSO), has so far harmonised almost 300 Standards covering trade in the automotive industry, pharmaceuticals, and medical devices. Work on textiles is set to commence soon. And to ensure that there is the infrastructure to implement the harmonized standards, Afreximbank has created a subsidiary and the African Quality Assurance Center (AQAC) that is building testing, inspection and certification centers across Africa. The first project has just been completed in Nigeria and others are underway in Tanzania, Egypt and Cameroon.
As we mark the 2022 Africa Industrialization Week, I am pleased to state that Afreximbank has also been at the forefront of the drive to transform the structure of African trade through aggressive support for industrialization and export manufacturing. We are working with various African Governments to develop and expand Industrial Parks (IPs) and Special Economic Zones (SEZs) to deal with infrastructural constraints to industrialisation. Projects in the total amount of about 900 million US dollars have been implemented or are ongoing across ten African countries, including two parks in Malawi and one in Cote d’Ivoire under development. We have also commenced discussions for the creation of industrial parks in DRC, Zambia, Rwanda, Kenya and Botswana. And, given that there are more than 30,000 parts in an average vehicle, the Auto industry presents a good opportunity for building regional value chains and driving industrialisation. That is why we are working in collaboration with the African Association of Automotive Manufacturers (AAAM), the African Union Commission and the AfCFTA Secretariat to promote the emergence of an automotive value chain in Africa. The Bank has supported the development of a Continental Auto Strategy and provided a grant to finance its implementation. We are also working with partners to champion the emergence of an Auto Pact between and among relevant African States with a view to fostering the emergence of a credible automotive value chain.
At Afreximbank, we recognise that in a continent fragmented into 55 atomistic nations, it is institutions such as Afreximbank that can mobilise the collective Will and Effort towards the realisation of our shared developmental goals. It is institutions such as ours that can unleash the forces of Unity. We remain alive to that responsibility.
As I draw to a close, I would also like to inform you that following the Diaspora being declared the 6th region of Africa a few years ago and the successful first-ever Africa-Caribbean Summit in 2021, Afreximbank has taken steps to accelerate the integration of our two regions, in line with the aspirations of the political leadership, mindful that Political Will alone will not suffice in attainment of our shared goals. Afreximbank is therefore expanding into the Caribbean region. In early September this year, we held the first-ever Africa-Caribbean Trade and Investment Forum which attracted over 1,000 participants from Africa and the Caribbean. Since then, about 9 of 14 CARICOM countries have signed a Partnership Agreement, a treaty instrument akin to the Afreximbank Establishment Agreement, thereby opening up the region for Afreximbank interventions. This partnership creates an opportunity for Afreximbank to facilitate and promote trade and investment flows between the two regions and attract African investments into the Caribbean and Caribbean investments into Africa. In that regard, we have conducted successful trade and investment missions to the Caribbean with African corporates and banks to explore opportunities in that market. Plans are advanced towards opening an Afreximbank office in the Caribbean so that we can support Africa-Caribbean trade and investments better. We are also supporting two African commercial banks that have already decided to follow the Bank and commence operations in the Caribbean. We have now moved from the phase of wishes to the stage of actions. Things will never be the same again concerning Africa-Caribbean relations.
Your Excellencies, distinguished ladies and gentlemen,
We are grateful that you continue to give us the support to deliver on Afreximbank’s mandate. In particular, we thank you for endorsing the 6.5 billion US dollar General Capital increase currently underway at Afreximbank. We thank all those who have met their obligations. We call on those yet to pay, to do their best to support their Bank.
We reaffirm our continued grant support for the African Union Commission, the AfCFTA Secretariat and other AU organs, because we realise that when they are stronger we will all be the better for it.
We look forward to greater partnerships as we jointly push ahead with the pan-African trade and industrialization agenda.
I wish you a successful session and thank you for listening
Professor. Benedict Oramah, President and Chairman of the Board of Directors of the African Export-Import Bank
Niamey, Niger
November 25th, 2022