Africa, a continent brimming with potential, has long grappled with a significant obstacle: insufficient financing to unlock its vast natural resources and harness its abundant human capital.
This persistent financial gap has often stifled development and limited the continent’s ability to compete effectively on the global stage. However, a powerful, home grown solution has been steadily gaining traction: the African Export-Import Bank (Afreximbank).
Established through the collaborative efforts of African governments and private sector entities, Afreximbank stands as a beacon of pan-African cooperation. Its core mandate is to finance and promote both intra-African and extra-African trade, ultimately fostering economic growth and diversification across the continent.
In a recent interview with ENA, Eric Monchu Intong, Client Relations Acting Group Managing Director at Afreximbank, shed light on the bank’s operations and its pivotal role in Africa’s economic landscape. He highlighted that Afreximbank, founded in 1993 by African states, emerged as a “child of necessity” in response to the devastating debt crisis of the 1980s that impacted Latin America and subsequently Africa. The bank’s creation aimed to provide a dedicated trade finance institution for the continent.
Afreximbank operates as a multilateral development financial institution with a unique public-private partnership (PPP) ownership structure. Class A shareholders consist of 53 African member countries, while Class B shareholders are African private sector entities. Class C is open to international institutions, and Class D is listed on the Mauritius Stock Exchange. The bank’s core mandate is to promote, facilitate, and finance both intra- and extra- African trade, and it actively supports major development projects across the continent.
The bank is deeply aligned with the objectives of the African Continental Free Trade Area (AfCFTA). Eric emphasized that the bank’s mandate inherently supports intra-African trade, making it an accredited technical partner to the AfCFTA Secretariat in Accra, Ghana. The bank provides crucial technical and grant support for the implementation of the AfCFTA, including the harmonization of standards in sectors like textiles, automotive and petroleum products. Afreximbank also played a pivotal role in encouraging African countries to sign the AfCFTA agreement, which entered into force in 2021.
The implementation of the AfCFTA is a cornerstone of Afreximbank’s current strategic plan (2022-2026), forming its first pillar. The second pillar focuses on industrialization and export development, recognizing the need for local manufacturing and adding value to facilitate intra-African trade. The third pillar, leadership in global trade banking in Africa, involves supporting financial institutions with various loans to ensure financing is available for trade, he elaborated.
Eric also addressed the growing call from African governments for reforms in international financial institutions like the World Bank and IMF. He asserted that these institutions often fail to adequately address the specific demands of African nations. He believes it is crucial to re-evaluate partnerships with these institutions and recognize the preferred creditor status granted by African states to African multilateral financial institutions. This status allows African Development Financial Institutions (DFIs) to take on more risk, and their loans are designed not to be subject to restructuring or “haircuts.”
Regarding global credit rating agencies, Eric acknowledged that African governments face challenges in securing loans due to often-criticized biased low credit ratings. While Afreximbank maintains strong relationships with international rating agencies, it also utilizes GCR, a South African-based rating agency, recognizing the need for Africa to have its own credible rating agencies to instil confidence in African investors. He supports the African Union’s push for a dedicated African rating agency, emphasizing that each continent should have its own.
Regarding the bank expanding support in Ethiopia he says that the bank actively supports macroeconomic reforms across the continent, citing Ethiopia’s significant reforms under Prime Minister Abiy Ahmed as a prime example. Afreximbank engages with public and private sector stakeholders to understand their needs and provide tailored financing solutions, aiming to address the persistent lack of financing. In Ethiopia, Afreximbank has provided over 2 billion USD in trade confirmation financing solutions for strategic commodities like pharmaceutical products and refined petroleum products. With the on-going reforms, Afreximbank anticipates increasing its support to Ethiopia’s economy to between 2 billion USD and 5 billion USD in the next three to five years.
In line with Ethiopia’s shift towards a private sector-led investment model he added that Afreximbank is expanding its support beyond just confirming letters of credit. They plan to provide direct loans to financial institutions, enabling them to offer liquidity to small and medium-sized enterprises (SMEs). Afreximbank also directly engages with corporates, always in partnership with local financial institutions, to complement existing services rather than compete with them. Eric highlighted discussions with the Ethiopian Railway Corporation to unlock trade corridors and dry ports, which are essential trade-enabling infrastructure.
Afreximbank’s capacity for support is expandable, with the bank being a leader in syndication, capable of bringing in other lenders for large transactions. Eric expressed optimism for massive support to the Ethiopian business community, government and public sector.
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Reports indicated that Ethiopia, a founding member of Afreximbank since ratifying its Establishment Agreement in 1994, has already benefited significantly from the Bank’s financial programs. Over the past five years, the Bank has facilitated trade transactions worth 4.7 billion USD through Ethiopian financial institutions via the Afreximbank Trade Facilitation (AFTRAF) program. In 2024 alone, it settled 32 billion USD in international trade payments on behalf of Ethiopian companies through its AfPAY service.
Highlighting Ethiopia’s strategic importance, Afreximbank noted the country’s economic potential as Africa’s second most populous nation, with an estimated 129 million people. The Bank aims to scale up support in key growth sectors including manufacturing, agribusiness, infrastructure, energy, and tourism. By expanding its footprint, Afreximbank seeks to provide customized financial and technical solutions that can unlock investment and accelerate Ethiopia’s economic transformation.
Overall, Afreximbank has been instrumental in helping African countries navigate global economic shifts and crises. During the COVID-19 pandemic, for instance, the bank provided critical support to African economies, ensuring the continued flow of essential goods and services and mitigating the economic fallout.