Prof. Benedict Oramah - Afrikan Heroes

Nigeria Gets Afreximbank’s Africa Quality Assurance Centre

May 19, 2021

Prof. Benedict Oramah, President of the African Export-import Bank

The African Export-Import Bank (Afreximbank) has announced the commencement of construction of the Africa Quality Assurance Centre (AQAC) in Ogun State, Nigeria. The Centre will be a state-of-the-art facility with the capacity to offer testing, certification, inspection, and training services covering agricultural products. It is the first in a series of Quality Assurance Centres that Afreximbank intends to establish across Africa to support industrialisation across the continent by ensuring that African products are manufactured to international standards and enabling them to participate in intra-African and global trade. First class quality infrastructure is considered critical in facilitating trade under the African Continental Free Trade Agreement (AfCFTA).

Construction of the Ogun State AQAC commenced on 25th February 2021. The Centre, which is expected to commence operations by the second quarter of 2022, will provide more than 400 jobs in the local area, including over 180 in the highly skilled areas of quality assurance, testing, inspection, and certification. In addition, an on-site training academy will provide the public and private sector with training in standards and quality assurance, as well as the skills necessary for businesses to compete in regional and international markets.

The AQAC is strategically located on a 5-hectare plot of land allocated by the Ogun State Government along the Lagos-Ibadan Expressway. The project site is 65km from Lagos, Nigeria’s main port city and commercial capital, and 75km from Ibadan, a major commercial and industrial hub in south-western Nigeria. It is also at the center of a region known for export agriculture.

The President of the Bank, Prof. Benedict Oramah, President of Afreximbank, said that “African businesses are set for a major step-change as the African Continental Free Trade Agreement (AfCFTA) opens up new markets across the continent and the globe. To make their mark in countries around the world, African products must meet international standards. The AQAC in Ogun State will help deliver the highest quality African goods, strengthening their competitiveness and providing confidence to buyers. This is an important step, not only in underpinning the ‘Made-in-Africa’ brand, but as a driver for greater exports, increased manufacturing and more resilient economies across the continent.”

Bureau Veritas, a world leader in testing, inspection, and certification, is Afreximbank’s technical partner on the project and will manage and operate the facility. The partnership will ensure that AQAC meets the ISO 17025 standard for testing and calibration laboratories, to ensure the credibility and reliability of the range of services provided, including physical and chemical testing, contaminant analysis, microbiological testing, water analysis, soil analysis, plant analysis and organic substrate analysis, among others.

Marc Roussel, Bureau Veritas Africa Senior Vice President, said: “We are very proud to be involved in this project and believe it can effectively shape trust between companies, public authorities and consumers. The AQAC will help improve the quality of Nigerian agricultural and food products, providing a boost to businesses and ensuring the well-being of local consumers. At the same time, compliance with international standards will facilitate access to export markets and thus increase the economic activity and employment in Nigeria.”

Courtney Michael Partnership Nigeria Limited, a Nigerian based company specialised in project management and construction management services, are project managers, while Monterosa Construction Ltd, Nigeria and Lambert Electromec Nigeria Ltd are providing construction services.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Silver Linen for African Automotive Industry with Afreximbank MoU

February 18, 2021

African automobile manufacturers are in for a great time as the African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa. Prof. Benedict Oramah, President of Afreximbank and Mike Whitfield, President of AAAM and Managing Director of Nissan Africa, signed the MoU to formalize the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.

Prof. Benedict Oramah, President of Afreximbank said that “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”

Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners. The two organizations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.

To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.

The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies. With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries. Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialization and export manufacturing and fostering the emergence of regional value chains.

“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” commented David Coffey, CEO of AAAM.

“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” added Mr. Coffey. Other areas covered by the MoU include working with the African Union and the African Organization for Standardization to harmonize automotive standards across the continent and developing an automotive focused training program for both the public and private sector.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Afreximbank Says That Intra-Africa Trade Key to Cushioning the Blow of Trade Tensions

December 17, 2020

Prof Benedict Oramah, president Afriexim bank

A new report released yesterday by the African Export and Import Bank (Afreximbank) has highlighted the importance of intra African trade to tackle the myriads of trade tensions across the continent. The annual African Trade Report (ATR) examined trade and economic developments in Africa in 2019, a year dominated by trade wars and escalating tariffs that resulted in a sharp deceleration of global trade growth. This has been compounded by Covid-19, and as a result, following a fall of 2.8% last year, global trade is expected to shrink by 9.2% in 2020.

Prof. Benedict Oramah, the Bank's President — Prof. Benedict Oramah, (Afreximbank) President

Citing emerging figures, the Report noted that global trade is expected to contract by 9.2% this year, having fallen by 2.8% in 2019 as Africa’s share of global trade was 2.7% in 2019, below the 4% figure of the 1970s. It also notes that informal cross-border trade which is a key component of intra-African trade is wide-spread in its composition. The African Trade Report estimates that in Eastern African ICBT is very high and could be worth as much as 80% of value of formal trade in some countries.

South Africa was the biggest contributor to Intra-African trade, accounting for 23% of total trade, in 2019. The biggest jump came from DRC which became the second intra-African trading nation, accounting for 10.4% of total intra-African trade and Nigeria was third with 7%. Continent remains overly dependent on export of raw commodities, with oil and gas accounting for over 37% of total exports. Afreximbank’s African Commodity Index is down 20% year on year, but shows a V-shaped recovery from the lows of April.

The ATR conducted an extensive study of informal cross-border trade (ICBT), the first attempt at measuring in a detailed manner the size and composition of informal trade. Despite regional variations, the report highlighted the importance of ICBT for generating employment and income. The report estimates that it serves as a source of income for about 43% of Africa’s population and is dominated by women. In Southern Africa (the SADC block), female traders account for about 70% of ICBT. In West Africa, food and agriculture products accounted for 30% of intra-regional trade.

Commenting on the report, Prof. Benedict Oramah, President of Afreximbank, said that: “Even though ICBT accounts for a significant proportion of domestic absorption and has become a major source of income for consumption smoothing, its contribution to GDP is hardly recognized.”

By bringing an evidence-based approach to measuring ICBT, the report highlights the areas that can be targeted to grow intra-African trade and transition ICBT to formality. For example, removing technical and non-tariff barriers to trade, as well as simplifying processes, increasing access to finance and creating payment systems that draw on digitalization to mitigate risks will help traders scale and move up the value chain. ICBT is currently a cash-only business. Many recommendations come out of the report which will become even more relevant with the advent of the Africa Continental Free Trade Agreement (AfCFTA). Afreximbank, for example, is rolling out its Pan-African Payments and Settlements System (PAPSS) to enable buyers and sellers to trade in local currency, as well as reducing the security risk associated with trading in cash.

In the period Jan to Aug, Africa’s merchandise trade contracted by 12% compared to same period last year, with April and May emerging as the period witnessing the largest contractions. The outlook for 2021 is positive and Africa’s trade is expected to rebound strongly in 2021 as global economic activity picks up and demands for African exports increases. The share of Africa’s exports to Asia increased to 30.79 percent in 2019 while the EU’s share decreased to 24.6. China and India have been the main drivers of the rising trade relationships between Africa and Asia, with China and India accounting for 27 percent of Africa’s total merchandise exports in 2019.

A similar pattern is also observed in the sourcing of imports by African countries. Even though the EU has historically been the largest market for Africa’s imports, its share of total African imports has been decreasing steadily and Asia has become as important as the EU.

The value of total intra-African trade fell by 5.23 percent in 2019 reducing its overall contribution to overall African trade, from about 15 percent in 2018 to 14.4 percent in 2019. South Africa maintained its position as the largest intra-African trade nation, accounting for 23.1 percent of total intra-African trade in 2019. The Democratic Republic of Congo (DRC) consolidated its position as a major contributor to intra-African trade, recording an increase of 10.4 percent in total trade with the continent to emerge as the second largest intra-African trade economy on the continent in 2019. Despite declining by 4.7 percent, Nigeria’s share of intra-African trade remained constant at about 7 percent and Nigeria emerged as the third largest intra-African trade country.

Commodities play an outsize role in terms of the value of African exports. Oil & Gas, despite a significant fall in price, still accounted for 37% of total African exports in 2019. Afreximbank, through their African Commodity Index, a trade-weighted index which tracks Africa’s 13 most important commodities, saw a V-shaped recovery between February and October although the index is approximately 30% below what it was in December 2018 and 20% below what it was at the start of the year.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

African Countries Get $3-Million COVID-19 From Afreximbank

May 2, 2020

Afreximbank President Prof. Benedict Oramah

The African Export-Import Bank (Afreximbank) has announced a $3-million grant to complement continental efforts to combat the COVID-19 pandemic. Afreximbank President Prof. Benedict Oramah,who made the announcement in Cairo, said that the grant was in response to a request by African heads of state, through the auspices of the African Union Chair Person, Cyril Ramaphosa, President of South Africa, for the mobilisation of resources to address the pandemic.

He said that a significant proportion of the grant would go to the COVID-19 Special Fund set up by the African Union (AU) as well as to the African Center for Disease Control (Africa CDC). “We hope that our modest contribution will help to address some of the immediate needs. We encourage other African banks, funds, corporations and charitable organisations to also contribute to the relief effort,” said Prof. Oramah, who noted that Afreximbank was working with the United Nations Economic Commission for Africa (ECA) and the AU to help mobilise grant funding for the COVID-19 mitigation responses.

Highlighting the need for wide institutional support for the COVID-19 response effort, he said that “no one country or institution will be able to rise to the challenge of the pandemic on its own.” Afreximbank’s grant support comes in addition to several initiatives the Bank is taking to support the effort in fighting the pandemic, such as the $3-billion Pandemic Trade Impact Mitigation Facility (PATIMFA), which it launched in March, to help African countries deal with the economic and health impacts of the COVID-19 pandemic.

The Bank has also set aside an amount of $200 million for use in financing the production of COVID-19 equipment and supplies within Africa. President Oramah said that the resource constraints and urgent nature of interventions on the ground required significant grant financing to ensure timely support for emergency interventions in combating the pandemic. Afreximbank has a history of intervening in support of African countries in times of crisis. In November 2014, the Bank contributed $1 million to the effort to combat the outbreak of the Ebola virus disease which affected several countries in West Africa. In 2019, Afreximbank donated $1.5 million to countries in Southern Africa to support relief efforts for victims of Tropical Cyclone Idai.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Afreximbank Launches N300 Billion Naira Medium-Term Note Programme

January 28, 2020

History was made in Lagos today as African Export-Import Bank (Afreximbank) signed documents to complete the registration of the first ever local currency fund raising programme in Nigeria.

The 300-billion Naira medium-term note with the Securities and Exchange Commission under the Bank’s local currency programme will boost Nigeria’s capital market and unlock the door to a new value-added relationship between Afreximbank and Nigeria.

According to Prof. Benedict Oramah, the Bank’s President, “over the last few years, many of the Bank’s key clients had made requests for local currency funding, saying that that Afreximbank designed and launched a local currency programme in 2016 with the primary aim of providing financing to African entities in major domestic and regional supply chains, particularly those that did not generate hard currency receivables”.

“In addition, we believed that using the debt capital markets in our member countries to raise the funding would contribute to the development of capital markets in those countries,” explained the President.

He described the timing of the note as opportune as Africa geared for commencement of trading under the African Continental Free Trade Agreements (AfCFTA), noting that there would be need to create productive capacities at national and regional levels and some businesses would require retooling. Others would need to expand key production units and secure reliable sources of local raw materials.

“Adequate and competitive local currency funding, through a pre-export financing arrangement will help these entities to create the necessary capacities to produce the goods required for export markets,” Prof. Oramah said. “The Bank’s local currency funding programme is part of the broad set of programmes designed to ensure Africa’s preparedness for the commencement of the AfCFTA. More importantly, it is part of Afreximbank’s objective of expanding the use of local currencies in the conduct of intra-African trade, as, together with the Bank’s Pan-African Payment and Settlement System, it will ensure that all foreign currency risks that have inhibited intra-regional trade are minimized considerably.”

Also speaking, Dr. Demola Sogunle, Chief Executive, Stanbic IBTC Bank PLC, said that the Afreximbank initiative was another noteworthy example of global best practice in treasury management and innovation to stay abreast of evolving market conditions.

“The establishment of the bond programme will aid in stimulating the expansion and development of Nigeria through Afreximbank’s intervention in various sectors of the Nigerian economy,” said Dr. Sogunle.

Expressing Stanbic IBTC Capital’s commitment to developing the Nigerian capital markets and driving financial innovation by advising clients on staying ahead of changing times, he said that the bank was pleased to assist Afreximbank in shaping its funding strategy.

Following approval of the Local Currency Funding Programme by the Afreximbank Board of Directors in response to rising demand for financing facilities denominated in local currencies from the West Africa Economic and Monetary Union, Rand area countries, Nigeria, East Africa and some parts of North Africa, the Bank, in 2017, began the process of registering the first note programme in the Nigerian Naira. Under the Nigeria Naira Note Programme, dubbed “Project Ramesses”, Afreximbank, acting as an “Issuer” of notes, seeks to establish a 300,000,000,000-Naira Medium-Term Note Issuance Programme and the issuance and offering of subsequent notes, subject to approved pipeline of Naira facilities.

Afreximbank appointed Stanbic IBTC Capital Limited as Lead Issuing House/Bookrunner and Chapel Hill Advisory Partners Limited, Lead Capital PLC, PAC Capital Limited and Vetiva Capital Management Limited as joint Issuing Houses/Bookrunners. The Bank also appointed Stanbic IBTC Trustees to be responsible for acting on behalf of the bondholders who hold legal title to the bonds and Africa Prudential Registrars as registrar to keep the register of the bonds once issued.

Afreximbank plans to roll out similar programmes in the Francophone West Africa, Southern Africa and Eastern Africa capital markets as demand for local currency funding from those markets materialise.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry