Home / Business / Nigeria gets $16bn Afrexim Bank investment

Nigeria gets $16bn Afrexim Bank investment

 

By David Agba

Abuja

 

The federal government has enjoyed investment worth $16 billion from the African Export-Import Bank (Afrexim).

President and Board Chairman of Afrexim, Dr. Benedict Oramah said the multilateral trade finance institution has so far injected this amount into the Nigerian economy since its inception in 1994.

Of this is a running $3.1 billion loan advances exposure to the country in addition to new projects worth $1.9 billion covering various sectors of the economy that are currently being finalized for Nigeria.

At a media engagement event in Abuja, Oramah disclosed that the bank pioneered and supported some difficult but impactful projects in the country among which were Lagos Mass Transit, $500 million for Power Sector Reform and privatisation, $2.5 billion for acquisition of oil assets by Nigerians, $1.8 billion to indigenous banks to meet foreign exchange trade payment obligations following collapse of oil prices.

Other beneficiaries include Dangote Cement for cross boarder inAvestments, Central Hotel, Kano and Ikoyi Hotels, while there were also interventions in the agricultural and other sectors.

He said Afrexim Bank’s medium term strategy, known as Impact 21, is founded on four corporate and developmental pillars: intra-African trade; industrialisation & export development; trade finance leadership and; financial soundness and performance.

Part of the plans is to move intra African trade from the current $170 billion annually to $250 billion by 2021 by making investments to promote trade information.

The bank boss lamented that a history of colonialism ensured that information about each African country is hidden from others stated that an estimated $40 billion informal trade happens within the continent annually.

Shareholding structure of the bank is presently categorized into three, which are Class A, comprising African governments, African Development Bank (AfDB), as well as African continental, regional and sub-regional financial institutions and economic organisations; Class B, made up of African national financial institutions and African private investors.

Others are Class C investors, comprising of international financial institutions, economic organisations, non-African financial institutions and non-African private sector firms; and a new Class D, which is open to subscription by any investor, African or non- African.

Nigeria is both the second largest shareholder and beneficiary of the bank, which disburses between $25 billion and $30 billion annually after Egypt.

Oramah said Afrexim Bank was conceived as a counter measure to the exit of international financial institutions from Africa in the 1980s, the aftermath of which foreign businesses were reluctant to honour letters of credit emanating from the continent.

To bridge infrastructure and trade gaps, Afrexim Bank has also extended financing to major airlines including Arik Air; working with Federal Ministry of Trade and Investment to create industrial parks and export processing zones and developing an Inspection and Standardisation Centre in Ogun state, where goods meant for export would be tested and certified to avoid rejection in their destinations.

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