European Investment Bank (EIB), has granted the African Export-Import Bank (Afreximbank), a line of credit agreement amounting to €100 million. The agreement took place last week in Abidjan, Côte d’Ivoire, on the sidelines of the African Union-European Union Summit.
The facility is aimed at financing trade-related long-term productive investments by private sector entities, or commercially operated public sector entities in Afreximbank member countries that are also signatories to the Cotonou Agreement.
The seven-year loan will finance trade-related investments and projects in Africa, with particular emphasis on small and medium-sized enterprises (SMEs) engaged in export manufacturing.
It is expected to enhance intra-African trade, Africa’s value-added exports, as well as trade with the European Union, thereby strengthening trade as a key driver of economic growth and competitiveness.
President of Afreximbank, Dr Benedict Oramah, said: “The facility agreement will add strong impetus to our drive for expanded intra-African trade and for the promotion of industrialisation and export manufacturing across Africa.
“We are delighted that the European Investment Bank has chosen to partner with us in the pursuit of Africa’s trade development and we are confident that, with the facility, we can look forward to mutually beneficial development outcomes for our two institutions and to the further strengthening of the relationship between Africa and Europe.”
Oramah noted that the purpose of the facility is fully aligned with Afreximbank’s current strategy, which prioritised intra-African trade, intra–African investments, and export manufacturing, expressing the view that it would contribute to employment creation, increased economic activities, and increase in tax revenues for fiscally constrained governments, amongst other outcomes.
Afreximbank is aggressively pushing the goal of facilitating the de-commoditisation of Africa as a critical factor in dealing with the migration challenges arising from the ever-expanding youth bulge in the continent, he said.
Speaking during the signing ceremony, EIB Vice-President responsible for Development, Ambroise Fayolle, said: “The European Investment Bank’s first ever transaction with Afreximbank is welcome news in the framework of the AU-EU Summit in Abidjan. Both the EIB – as the Bank of the European Union, delivering on its objectives – and our African partners share the strategic objective of supporting the private sector with a particular focus on trade and trade-related infrastructure.
“The two banks believe the agreement will help develop EU-African trade relations and, crucially, provide much-needed jobs across the continent.”
Since inception in 1993, Afreximbank has developed strategic partnerships with leading bilateral and multilateral development finance institutions in an effort to attain its developmental mandate of promoting more diversified trade in Africa. The partnership with EIB evidences the continued confidence of international development finance institutions in Afreximbank.