Afreximbank hails establishment of export risk guarantee firm in Egypt
The African Export-Import Bank (Afreximbank) has supported the establishment of export risk guarantee company in Egypt.
The decision to establish an export risk guarantee firm will give a major boost to Egypt’s role as a critical hub for intra-African trade and allow it to be a key driver of the African Continental Free Trade Area deal, Afreximbank’s President Benedict Oramah said on Monday.
Welcoming the announcement that the Board of the Central Bank of Egypt (CBE) had approved the establishment of an Export Credit Risk Guarantee company with a capital of $600 million, Oramah said the firm will make it possible for Egypt to take advantage of the many promising opportunities for trade between it and other African countries.
He said the company would greatly compliment Afreximbank’s service offerings promoting Egypt-Africa trade by creating more capacity, noting that the Bank had provided an aggregate of about $7.5 billion in support of Egypt-Africa trade and contract financing in the past few years.
“Afreximbank will share risks with the Export Credit Risk Guarantee company and will fund projects covered by the company where necessary,” stated the President, who went on to congratulate CBE Governor Tarek Amer and the bank’s board for their initiative in setting up the firm.
The establishment of the firm follows an in-depth study carried out by the Central Bank in partnership with Afreximbank, which highlighted that lack of required financial services, lack of information, high levels of risk, and high cost of financing were hindering investors and banks from taking advantage of opportunities for trade between Egypt and other African countries.
The study also pointed out that, given its economic potential, geographical location and strong relationship with other African countries, Egypt had the capacity to support African trade if the necessary banking entities and supporting instruments were available.
The Board of Directors of the Central Bank subsequently, in June 2019, approved the appointment of a technical office nominated by Afreximbank to work toward the establishment of the company.
The new firm will provide strategic support for Egyptian industrial and export services to the rest of Africa and will support Egyptian firms by helping them to win contract for major projects with African governments, which are estimated to be worth $60 billion annually.
Source: Africa Business Communities