With its commitment to spend $1 billion for African creative and cultural industries, Afreximbank is set to boost the continent’s economy with its Creative Africa Nexus (CANEX 2024) event in Algeria October 16 to 19.
Building on previous editions, creatives will showcase their work, network with industry leaders, and explore opportunities through exhibitions, roundtable, masterclasses, live shows, music, dance, poetry, and others.
Launched in 2020, Afreximbank has deployed specialised products for financing some CCI sectors, including Film Financing Development Facility and Music Development Facility. The bank identified gaps in the creative production value chain and created interventions to bridge these, focusing on access to markets.
“CANEX WKND 2024 features exhibition and market, roundtable, masterclasses, live shows, and networking …’’ the organisers said.
Nigeria’s forex (FX) earnings from the export of foodstuffs are set to rise as the African Quality Assurance Centre (AQAC), an Afreximbank’s laboratory managed by Bureau Veritas in Nigeria secures ISO 17025 accreditation.
Managing Director, Bureau Veritas Nigeria, Jean-Michel Perret, who broke the news in an interview, said the ISO accreditation empowers the AQAC lab to provide the highest standards of testing and inspection services to Nigeria’s agrofood industry and beyond.
According to him, the AQAC laboratory, located along the Lagos-Ibadan Expressway in Sagamu, Ogun State, currently works with leading food companies and exporters to ensure that food products for export pass required quality test, meet the demands of offshore clients and guarantee steady inflow of FX proceeds for the domestic economy.
He said the testing of agrofood puts them in best conditions for export, reduces rejection of the items in destination countries and raises the volume of forex earned through the export of the commodities.
Perret described AQAC as a brand of Afreximbank, with Bureau Veritas Nigeria authorised by the bank to operate the laboratory on its behalf, with prospects of establishing many of such facilities in the different parts of the country and across the continent.
Lauding AQAC’s exceptional competence in laboratory testing, and providing the highest level of accuracy and reliability for stakeholders, Perret, said the ISO 17025 accreditation shows the laboratory has an effective quality management system and capability to deliver accurate testing and confident results.
He listed series of services carried out by the laboratory as physical and chemical testing of food and agricultural products, contaminants analysis, microbiological testing, water analysis, soil analysis, plant analysis, and organic substrate analysis.
He said the company carries out specific soil and water tests to ensure there are no heavy metals that will affect the produce negatively. And for processed foods, the tests can include ensuring that the food does not have e-coli, or other bacteria in compliance with either the requirements by law from the destination country or the requirement of the client.
Perret said the choice of Nigeria in setting up the AQAC laboratory, considered the business potential of the country, and large population it will serve.
On the cost of providing the service to customers, he said: “The cost is at the level of the service. We do apply high standards, and consider cost of doing business. You have to take account of the value cost and manage them to remain competitive. We want the market to reach the rest of the world. The cost of testing is nothing compared to having your 20-foot container of yam, returned back to Nigeria, or destroyed for failing quality test.”
Perret explained that the 17025 ISO certification is an international standard, that sets out the requirements for the competence, impartiality, and consistent operation for laboratory to ensure that end results are accurate and reliable.
He said: “When it comes to export of agri products, the assurance on the quality of foods is critical. The AQAC laboratory improves turnaround time for food producers, saves the time of sending samples to foreign labs as well as money for clients.”
He said Afreximbank found out that many foods exported from Africa are not compliant to the requirement of the destination countries. It was the need by the bank to improve the quality of food exported from Africa to the rest of the world that prompted it to set up AQAC laboratories.
He said the Bureau Veritas Nigeria will continue to create the awareness that food products for export should be tested before being shipped to overseas.
He said: “So, awareness is probably one big challenge here, but there is a lot of effort from various organisations, including ourselves, to create that awareness across the country.
According to him, countries and regions can have their parameters that food stuffs for export must meet, while clients in such regions can also have different requirements for the products they need.
Perret said: “We are incredibly proud to have achieved the ISO 17025 accreditation for the African Quality Assurance Centre. This milestone reflects our steadfast commitment to providing the highest standards of testing and inspection services. It also demonstrates our dedication to supporting Nigeria’s AgroFood industry in meeting international quality benchmarks, thereby facilitating greater access to global markets for ‘Made in Africa’ products.”
Senior Vice President, Bureau Veritas Africa, Bertrand Martin, added, “The ISO 17025 accreditation of the African Quality Assurance Centre is a testament to our continued efforts in advancing quality and safety standards across Africa. This achievement not only enhances the credibility of Nigerian AgroFood products but also reinforces our role in promoting economic growth and trade on the continent and beyond. We are proud to partner with Afreximbank in this initiative.”
Additionally, Afreximbank recently announced the initiation of project development activities for two new AQACs: one in Ngor Okpala, Imo State, on 3 June 2024, and the other in Kaduna State on 14 June 2024. These developments build upon the successful commissioning of the pilot AQAC in Ogun State, Nigeria, in December 2022.
The AQACs are also expected to expand intra-regional trade under the African Continental Free Trade Agreement (AfCFTA) by ensuring products meet standards and regulations at export destinations within the continent. Afreximbank is collaborating with stakeholders, including the African Organization for Standardization (ARSO), to harmonize standards in key sectors, thereby promoting a cohesive trade environment.
Managing Director, export development at Afreximbank, Oluranti Doherty, said that the accreditation serves to validate AQAC’s capabilities and expertise and will provide new opportunities to expand the centre’s reach. “By aligning its practices with international standards and best practices, AQAC is well-positioned to attract new clients, foster partnerships with industry stakeholders, and contribute to the advancement of quality assurance practices in Africa,” said Doherty.
Bureau Veritas has been cultivating trust between companies, governments, and society for nearly 200 years, guiding through major technological, economic, and societal changes.
This internationally recognized accreditation confirms AQAC’s exceptional competence in laboratory testing, ensuring the highest level of accuracy and reliability for stakeholders and is aligned with Bureau Veritas LEAP|28 strategy of being our customers’ preferred partner for excellence and sustainability.
African Export-Import Bank (Afreximbank) plans to double its financing of intra-African trade from $20 billion in 2021 to $40 billion by 2026, Mr. Haytham ElMaayergi, Afreximbank’s Executive Vice President, Global Trade Bank, has said.
ElMaayergi was addressing participants and guests in Abuja at the African Caucus Meeting of the World Bank Group and the International Monetary Fund (IMF), where he represented Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank.
Attended mainly by ministers of finance and Central Bank Governors from across Africa, the meeting had the theme “Facilitating Intra-African Trade: Catalyst for Sustainable Development in Africa”, and was aimed at identifying key challenges facing Africa in achieving full integration and at engaging in strategic dialogues to engender sustainable solutions.
ElMaayergi said that Afreximbank had been a champion in facilitating intra-African trade since its founding and that it had committed $1 billion to support the funding of the AfCFTA Adjustment Fund and a $10-million grant to facilitate the establishment and operationalisation of that fund.
“The bank is also partnering with the AfCFTA Secretariat and the African Union Commission (AUC) to ensure a successful implementation of the Pan-African Payments and Settlements System, the African Trade Gateway and the Afreximbank African Collaborative Transit Guarantee Scheme,” ElMaayergi said.
He noted that Nigeria was a key founding member of the bank and had continued to play a critical role in its growth and success as its second largest shareholder, adding that Afreximbank had also played a critical role in supporting the country’s development agenda.
“Since inception in 1993, the bank has approved over $40 billion in support of Nigerian public and private sector entities,” he said, adding that it was currently implementing several of its flagship continental initiatives in the country, including the African Medical Centre of Excellence and the Afreximbank African Trade Centre.
Highlighting the existence of several other continental multilateral financial institutions created to help address the critical financing gaps in Africa and facilitate trade, with privileges and capitalisation granted them in order to enable them to fulfil their mandates, ElMaayergi indicated that it was to enhance their effectiveness that the Alliance of African Multilateral Financial Institutions (AAMFI) was launched, in collaboration with the AUC, on the margins of the 37th Ordinary Session of the Assembly of the Heads of State and Government of the AU in Addis Ababa in February.
He noted that the AU had recognised African multilateral financial institutions as crucial for strengthening the continental financial framework and advancing the AU’s Agenda 2063 and called on the meeting participants to reaffirm their commitment to those institutions. He urged the World Bank and the IMF to work with AAMFI in addressing the continent’s challenges.
“Most especially, we call on you to reaffirm that the special privileges and immunities that you have given these institutions, including the preferred creditor status, are essential for addressing the continent’s development needs, and to call upon all stakeholders to respect the treaty obligations you have made to these institutions,” ElMaayergi said.
The membership of AAMFI currently includes: Africa Finance Corporation; Afreximbank; Trade and Development Bank Group; African Reinsurance Corporation; African Trade and Investment Development Insurance; Shelter Afrique Development Bank; PTA Reinsurance Company; East African Development Bank; and African Solidarity Fund.
Shareholders of African Export-Import Bank (Afreximbank) has increased the bank’s authroised capital from $ 5 billion to $25 billion.
At the annual general meeting of the bank, shareholders voted to increase the authorised share capital in recognition of the rapid growth of the bank and in response to the challenges facing the African continent.
President, African Export-Import Bank (Afreximbank), Prof Benedict Oramah said the increased authorised share capital creates capacity for the bank to support the growth and development envisaged for the African continent in line with its mandate to promote the continent’s trade and affirm its relevance on the global stage.
“The overwhelming endorsement by shareholders of the historic increase of the bank from $5 billion to $25 billion reflected their firm belief and trust in the board and management of the bank and in the bank’s mission. This move gives us the necessary headroom to mobilise the capital we need to create a bank that serves all Africans,” Oramah said.
Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) for African Export-Import Bank (Afreximbank) at ‘BBB’, with a Stable Outlook. The agency also affirmed the bank’s Short-Term IDR at ‘F2’ and the long-term ratings on the bank’s Global Medium Term Note Programme and Debt Issuances at ‘BBB’.
The ratings affirmation recognised Afreximbank’s strong profile and increasing systemic relevance to the African continent as evidenced by the increasing number of key mandates placed on the bank by the African Union (AU), including the implementation of the health response to the COVID-19 pandemic and, recently, the support for access to grains and fertilisers in the context of the Russia-Ukraine war.
Fitch also acknowledged the bank’s strong capitalisation and liquidity position evidenced by its ‘excellent’ internal capital generation where the bank was benefiting from ongoing shareholder support through the AU-initiated General Capital Increase (GCI) under the bank’s current strategic plan (Plan VI), through which the bank aims to raise $2.6 billion in paid-in capital. Cumulatively, the bank has mobilized a gross paid-in equity of $2.1 billion since the GCI was launched in August 2021.
Consequently, Fitch noted that Afreximbank had a strong liquidity profile, with its share of quality treasury assets rated ‘AA’ to ‘AAA”, 53 per cent in 2023, remaining substantially above the ‘strong’ threshold of 40 per cent.
The liquidity profile is further enhanced by its access to capital markets and other alternative liquidity sources even during challenging times.
Afreximbank has continuously demonstrated its ability to de-risk its lending portfolio, with a low concentration risk and a high degree of loan collateralization, 85 per cent of total loans in 2023, including provisions, with cash collaterals covering 20 per cent of the loans, and 8.0 per cent covered by credit insurance from ‘A’ to ‘AA’-rated insurers. Fitch assessed the bank’s risk management policies as ‘moderate’ and primarily reflected “the bank’s use of credit risk mitigants that have helped maintain a relatively low non-performing loan ratio, despite the high-risk environment that the bank operates in”.
Reacting to the reaffirmation of the bank’s rating, Denys Denya, Afreximbank Group Senior Executive Vice President, said that it was pleasing to note that Fitch rates the bank “a-” on a standalone basis, before notching two levels down due to operating environment; which is a strong testament to the bank’s systemic relevance to Africa and a recognition of its strong delivery of its developmental mandate, its prudent risk management practices and its relentless focus on capital and liquidity which had culminated in robust financial performance.
“The bank and its subsidiaries continue to play a pivotal role in facilitating trade and investment across its member states,” said Mr. Denya. “Together with the robust relationships it enjoys, the bank has become integral to the achievement of the AU’s key strategic economic programmes and initiatives on the continent and in the Diaspora, including the implementation of the African Continental Free Trade Agreement (AfCFTA) and the management of the AfCFTA Adjustment Fund.”
He further noted that, in executing its countercyclical role, Afreximbank continues to be nimble and resourceful in its support to member states to enable them to mitigate the vagaries of a persistently challenging operating environment, such as the 2015 commodity price crisis, the Covid-19 pandemic, the Ukraine-Russia crisis and the current African debt crisis.
The China Development Bank (CDB) in Cairo signed a development-focused agreement to provide the African Export-Import Bank (Afreximbank) with a $400mn term loan to support the financing of small and medium-sized enterprises (SMEs) across Africa.
The agreement, signed by Tan Jiong, President of CDB, and Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, at the Afreximbank Headquarters in Cairo, provides for Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in Afreximbank Member States.
The facility, which has a seven-year tenor, will be deployed either directly to eligible African SMEs that meet Afreximbank’s requirements or indirectly through local financial intermediaries.
Oramah pointed out that African SMEs continue to struggle to access adequate and affordable financing for growing their businesses and said that the CDB facility would help increase the level of financing available to them.
He added that since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, the Bank would transfer the financial advantage in pricing and tenor to the end beneficiaries.
“This facility further strengthens the strategic partnership we have developed with the China Development Bank over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank,” continued President Oramah. “It will also enable our two institutions achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity and increased extra-African trade with China.”
Nigeria has received additional disbursement of $925 million under a syndicated $3.3 billion crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company (NNPC) Limited.
The latest disbursement brought total current funded facility size to $ 3.175 billion, after initial funded commitments of $2.25 million in December 2023.
Arranged and coordinated by African Export-Import Bank (Afreximbank) the accordion arrangement saw the raising of a combined total of $925 million from a consortium of crude oil off-taker lenders including Oando Group and Sahara Energy Resource Limited among others.
The transaction is expected to provide further support for Nigeria’s macroeconomic stability and long-term economic growth while enhancing the country’s industrialisation and trade development efforts.
President, African Export Import Bank (Afreximbank), Prof. Benedict Oramah said the milestone achieved thus far, on the $3.3 billion facility, demonstrates the bank’s capabilities in performing its role as a crucial development partner for Africa.
“It reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability. This funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities,” Oramah said.
He noted that the facility was ‘a landmark’ for being the largest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised in Africa.
He said the closure of the first accordion demonstrated the existence of positive market appetite for well structured commodities-backed instruments.
Group Chief Executive Officer, Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari commended Afreximbank for its investment philosophy and active interest in co-creation of prosperity.
“The successful disbursement of the first accordion under project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPCL and Nigeria’s growth aspirations,” Kyari said.
He further assured Afreximbank and all investing communities of NNPCL’s resolve to continue to grow the nation’s hydrocarbon resources and strengthen its partnerships across the oil and gas value chain locally, and globally.
African Export-Import Bank (Afreximbank) grew its net interest income by 31.73 per cent to $393.4 million in first quarter 2024 compared with $298.6 million recorded in first quarter 2023.
The three-month report released at the weekend showed that the top-line growth was largely driven by a 40 per cent increase in interest income to $721.8 million, on the back of the growth in the bank’s portfolio of loans and advances.
Net interest margin improved to 4.82 per cent compared with 4.40 per cent in the corresponding period due to a combination of higher benchmark rates and effective management of borrowing costs.
The group demonstrated an improvement in operating efficiency with a lower cost to income ratio of 14.50 per cent in first quarter 2024 compared with 16.82 per cent in first quarter 2023. This was achieved despite a 10.63 per cent increase in operating expenses to $61.4 million from $55.5 million.
Staff costs however rose by 28.55 per cent following an increase in staff headcount to support the growth of group business and other initiatives, in line with the bank’s sixth strategic plan, constituting 52.93 per cent of group’s expenses.
Group total assets closed March 2024 at $ 32.8 billion compared with $33.5 billion recorded as at December 2023. Cash and cash equivalents closed the period at $4.9 billion as against $5.6 billion in December 2023, with the liquidity ratio at 14.9 per cent.
Group’s shareholders’ funds rose by 2.89 per cent to $6.3 billion by March 2024 as against $6.1 billion in December 2023, on the back of growth in group net income of $178.7 million. Callable capital, a significant proportion of which was credit enhanced as part of the bank’s capital management strategy was maintained at $3.7 billion by March 2024 compared with $3.7 billion in December 2023.
Underlying ratios however showed a drop in Return on Average Equity (ROAE) from 12.89 per cent in first quarter of 2023 to 11.51 per cent in first quarter of 2024. This also contributed to a drop in return on average assets from 2.54 per cent to 2.19 per cent during the coverage period.
Afreximbank and Woodhall Capital have hosted a workshop on Supply Chain Finance and Factoring in Nigeria.
The event served as a platform to explore the opportunities and challenges in the Payables Finance Industry in the country.
Mrs. Folasade Ambrose-Medebem, commissioner for Trade and Investment, Lagos State and Mr. Abayomi Arogundade, who represented Dr. Olayemi Cardoso, governor, Central Bank of Nigeria (CBN) were among those who attended the workshop.
The workshop was followed by a launch of the innovative Payables Finance product, branded as ‘Afreximbank Tradelink’ in partnership with Sterling Bank.
The introduction of Payables Finance is the next stage on Afreximbank’s roadmap to promote Supply Chain Financing in Africa. The bank provides US Dollar and Euro financing across Africa and plans similar partnerships in other African countries while incorporating local currencies.
Arogundade, deputy Director of the Other Financial Institutions, Supervision Department highlighted the significance of the workshop.
He emphasised the collaboration, particularly in establishing regulatory frameworks for factoring. Both institutions are committed to exploring regulatory measures to support the development of supply chain finance.
Mrs. Mojisola Hunponu-Wusu, founder of Woodhall Capital, praised the CBN, for the support of financial institutions to the receivables financial industry.
“We are thrilled by the overwhelming response to the workshop,” said Festus Adegboyega, chief executive officer at Woodhall Capital.
He added: “The presence of esteemed guests from Lagos State and the Central Bank of Nigeria such as Mrs. Ambrose-Medebem, further highlights the importance of collaboration in advancing the payables finance industry in Nigeria.
“We believe that by equipping businesses and financial institutions with the knowledge and tools they need to navigate the complexities of supply chain finance and factoring, we can contribute to the sustainable development and growth of the African economy.”
Nigeria is expected to receive a $1billion loan from the African Export-Import Bank (Afreximbank) next month as part of a larger crude oil prepayment facility aimed at shoring up foreign exchange (forex) reserves and boosting the economy.
“The verification of the crude availability has happened so we expect in the next month to finalise the release of the balance. Based on future production, you get the money,” Senior Executive Vice President for Finance, Administration, and Banking at Afreximbank, Denys Denya, told Bloomberg.
The funds are part of a larger, $3.3 billion, crude oil prepayment facility, sponsored by the Nigerian National Petroleum Company Limited (NNPCL). An initial disbursement of $2.25 billion was made by Afreximbank in January, and a second tranche of $1.05 billion was expected to be disbursed subsequently.
Nigeria will now get the remaining $1.05 billion in May, according to Denya.
The top oil producer in Africa will repay the loan using proceeds from sales of crude by the Nigerian National Petroleum Corporation Limited (NNPCL).
In January, Afreximbank said: “This landmark financing is the largest syndicated loan ever raised by Nigeria in the International market and one of the largest syndicated debts raised in Africa in recent years.”
Nigeria missed out on the oil price boom in 2022 as it was struggling to boost its production while oil prices were above $100 per barrel. The country has been grappling for years with a shortage of foreign currency and a lack of economic diversification away from crude oil exports.
At the time of the first batch of loan disbursement, NNPCL Group Chief Executive Officer, Mele Kolo Kyari, said “the proceeds of the facility have been made available to the Federal Republic of Nigeria as one of several efforts towards improving macro-economic stability.”
“The participation of global, international and regional syndication firms is a further testament to the lending market’s appetite for financing sponsored by NNPCL and signifies solid market confidence in Nigeria,” Kyari added.
