Breaking down Afreximbank's trade strategy for Africa

The Africa Export Import Bank (Afreximbank) has identified the promotion of intra-African trade as the focal point of its current five-year strategy. Established in 1993 to finance and promote trade within Africa and beyond, Afreximbank launched its Intra-African Trade division in 2017 to facilitate and finance intra-African trade. Kanayo Awani, the Managing Director of Intra-African Trade Initiatives at Afreximbank, recently discussed the bank's trade strategy and initiatives on CNBC Africa. Awani highlighted that from 2017 to 2021, Afreximbank intensified its focus on intra-African trade, recognizing the potential and importance of regional trade dynamics. She noted that prior to the introduction of the intra-Africa trade strategy, the share of intra-Africa trade in the bank's portfolio was merely 3%. However, with a dedicated approach, this figure has now surged to approximately 30%. Intra-African trade involves the exchange of goods and services between African countries, as well as with its international partners. The emphasis on intra-Africa trade aims to harness the continent's commercial relationships and promote industrialization by developing regional value chains and enhancing the production of value-added goods. Factoring, a financial product targeted at supporting small and medium-sized enterprises (SMEs) in trade financing, plays a crucial role in Afreximbank's efforts to bolster intra-African trade. By bridging the gap in trade finance for SMEs, factoring contributes to inclusive and sustainable economic growth. Additionally, Afreximbank is working on the establishment of an Adjustment Facility in collaboration with the African Union and the African Continental Free Trade Agreement (AfCFTA). The Adjustment Facility is designed to assist countries in managing the costs associated with the liberalization of trade under the AfCFTA. This initiative entails addressing revenue losses, transposition costs, and enhancing competitiveness for both the public and private sectors. The resource mobilization plan for the Adjustment Facility is estimated to require substantial funding, with Afreximbank committing $1 billion to support the initiative. The bank's partnership with the AfCFTA and government authorities underscores the collective effort to facilitate a smooth transition towards a more integrated and competitive African trading landscape. As Afreximbank continues to steer its trade strategy towards advancing intra-African trade, collaboration remains paramount. Engaging with stakeholders from the public and private sectors, as well as international organizations, is crucial for driving sustainable trade development across the continent. In conclusion, Afreximbank's dedication to promoting intra-African trade, coupled with strategic initiatives such as factoring and the Adjustment Facility, reflects its commitment to fostering economic growth, industrialization, and trade resilience in Africa.