Abuja — Afreximbank announced on August 9, 2024, plans to double its intra-African trade financing from $20 billion in 2021 to $40 billion by 2026. According to Executive Vice President Haytham ElMaayergi, the move supports the implementation of the African Continental Free Trade Area and aims to promote economic integration through direct financing and trade facilitation across the continent.
Afreximbank’s plan to double its intra-African trade financing to $40 billion by 2026 reflects its ongoing commitment to supporting the African Continental Free Trade Area (AfCFTA) and boosting economic integration across the continent, Executive Vice President Haytham ElMaayergi said during the announcement in Abuja on August 9, 2024. The bank aims to raise more than $40 billion over the next five years to facilitate AfCFTA’s adoption and implementation, according to research on Afreximbank’s role under the trade agreement.
In 2023 alone, Afreximbank disbursed over $18 billion—the largest single-year disbursement since its inception—with a significant portion dedicated to intra-African trade and trade-related development, the bank reported.
This financing addresses a continent-wide trade finance gap estimated between $90 billion and $110 billion annually, with intra-African trade finance a core focus area, sources confirmed. Afreximbank also supports the Pan-African Payment and Settlement System (PAPSS) through a $3 billion facility to facilitate cross-border payments in local currencies, enhancing trade fluidity within Africa.
The bank organizes its operations around two main pillars: the Global Trade Bank, which manages trade flows between Africa and the rest of the world, and the Intra-African Trade Bank, which focuses specifically on trade within the continent, officials said. Under its Trade & Project Financing function, Afreximbank runs programs designed to expand, diversify, and promote intra-African trade through trade finance lines, project finance, and advisory services. The bank’s intra-African trade pillar prioritizes trade in manufactured goods, aiming to shift African trade away from commodities toward higher value-added products traded within the continent, according to the institution’s fifth Strategic Plan.
Afreximbank has established a dedicated Intra-African Trade Initiative (IATI) division to coordinate interventions that boost intraregional exchange, including trade facilitation, correspondent banking services, and support for regional value chains. The bank describes itself as Africa’s “go-to enabler for trade and project financing,” explicitly linking this role to intra-African trade expansion and industrialization, according to its strategic documents.
The bank’s impact on intra-African trade volumes is measurable. The African Trade Report 2024 records a 3.2% growth in intra-African trade in 2023, down from 10.9% in 2022, but still showing resilience amid global economic challenges. Intra-African trade accounted for about 14.9% of total African trade in 2023, up from 13.6% in 2022. Afreximbank’s 2023 Trade Development Effectiveness Report estimates that its programs facilitated an $8.9 billion increase in the value of intra-African trade, equal to 4.7% of total intra-African trade. The same report attributes $1.9 billion, or 1.5% of Africa’s total trade, to Afreximbank-supported interventions.
Through 86 trade finance lines to 24 African countries, Afreximbank enabled 77,147 sub-loans to small and medium-sized enterprises (SMEs), resulting in 145,129 direct jobs created across Africa, the report showed. The bank promotes alternative financing tools such as factoring and supply chain finance to improve access to trade finance for SMEs, which are critical actors in intra-African trade.
Afreximbank is also launching the Africa Direct Investment (ADI) Initiative to support African companies investing in other African countries, focusing on sectors such as agriculture, agro-processing, and manufacturing. The ADI Initiative provides investment guarantees and project finance to African investors, addressing challenges faced by firms undertaking cross-border ventures within the continent, according to bank officials.
The bank’s Central Bank Deposit Programme raised $34 billion in 2024, lowering funding costs and extending access to corporates and financial institutions, thereby indirectly supporting intra-African trade finance. Afreximbank’s interventions in trade-enabling infrastructure—including logistics and energy—are among its strategic pillars aimed at removing barriers to intra-African trade and investment.
Afreximbank actively supports AfCFTA implementation through direct financing facilities and by leveraging its convening power to mobilize additional resources. It collaborates with national authorities and the AfCFTA Secretariat to assist countries such as Ghana, which is expediting AfCFTA adoption to shift from commodity-based trade toward value-added exports within Africa, sources said. The bank’s programs also focus on enabling African businesses to participate more effectively in continental value chains, particularly in manufacturing and services, in line with AfCFTA objectives.
Established in 1993 under the auspices of the African Development Bank, Afreximbank is a pan-African supranational multilateral financial institution headquartered in Cairo, Egypt. It provides financing to African governments and private businesses to support intra-African and Caribbean trade. As of December 2024, Afreximbank counts 53 participating African member states and 12 Caribbean states under its partnership agreement with the Caribbean Community (CARICOM). The institution is recognized as Africa’s largest multilateral trade financier and trade finance facilitator, reflecting its scale and capacity to pursue large-scale commitments such as the planned $40 billion for intra-African trade financing by 2026.
Comments are closed.