The African Export-Import Bank (Afreximbank) has announced the inception of new five-year strategic plan that will see the African continental trade finance institution disburse no less than $90 billion in support of African trade between 2017 and 2021.
The plan, dubbed “IMPACT 2021: Africa Transformed”, was approved by the Afreximbank Board of Directors during its 111th meeting which took place in Cairo on 10 December 2016.
The new plan envisages an aggregate disbursement of some $90 billion during the five-year period, reflecting the revolving nature of trade finance business, with disbursements in support of intra-African trade expected to reach $25 billion. The strategy defines intra-African trade as trade in goods and services between or among African countries and the flow of goods and services between Africa and Africans in the Diaspora.
“The approval of Impact 2021 paves the way for Afreximbank to begin to more directly address the imperatives of its mandate,” said Bank President Dr. Benedict Oramah in welcoming the approval of the strategic plan. “Africa will be better for it.”
“IMPACT 2021: Africa Transformed” sets out four strategic pillars for the Afreximbank, namely: Intra-African Trade; Industrialisation and Export Development; Trade Finance Leadership; and Financial Soundness and Performance. It also defines a set of macro and corporate objectives and targets.
Under the intra-African trade pillar, the Bank will aggressively promote and finance intra-African trade and trade with the African Diaspora. The strategy for intra-African trade is conceived around three themes identified as Create, Connect and Deliver, with Measure as an ancillary theme, to derive the acronym CCDm.
The philosophy behind CCDm is that building solid export manufacturing capacities as well as domestic and continental supply chains would facilitate increased flow of goods and services across borders in Africa. The Measure ancillary theme introduces monitoring and measurement mechanisms. CCDm will, therefore, bring together, in one whole, key players in intra-African trade, such as the farmer, the processor, the manufacturer, tradable services provider, traders, financiers, logistics providers and policy makers.
A critical component of “IMPACT 2021: Africa Transformed” is the Industrialisation and Export Development pillar, which is framed around three themes: Catalyze, Produce and Trade or CPT. Under the CPT framework, the Bank intends to act as a catalyst for industrialisation and export development in Africa by directly addressing the constraints to industrialisation by facilitating the production of value-added exports and services while ensuring that the produced goods and services are traded.
Interventions under the Industrialisation and Export Development pillar will focus on supporting the development of the agro-processing, light manufacturing, and tradable service sectors.
The Trade Finance Leadership pillar will see Afreximbank extend its leadership in trade finance by expanding intervention in some of the critical trade finance products it already offers and by creating new products and initiatives. It will expand its trade services offering to fill the gap created as a result of reduced activities by international banks in Africa due to high compliance costs and economic uncertainties.