Financial Institutions in Rwanda can already start applying for available $1 billion fund from African Export-Import Bank (Afrexim) and invest in regional trade.
The regional lender says the funding, under its ‘trade facilitation programme’, which was launched on Wednesday, October 24 in Rwanda’s capital Kigali, will facilitate financial institutions to expand their business across Africa.
The bank officials held a lengthy workshop with leaders of Financial Institutions in Rwanda to explain potentials in the new program.
According to Afrexim’s officials, Trade Facilitation Programme is structured to enhance the confidence of counterparties in the settlement of international trade transactions for intra- and extra Africa trade and to improve correspondent banking relationships.
In addition, the program is in line with helping the continent to implement the Africa continental free Trade Area (CFTA) signed in Rwanda in March this year.
The agreement seeks to make Africa an open one single market for all Africans.
Experts on investment in Africa have urged governments and the private sector to look for home-based financing if CFTA is to be realized.
According to Afolabi Obisesan – Afrexim’s manager in charge of guarantees and specialized finance, “the Bank’s aim is to use Africa’s solution to solve Africa’s problem.”
“The idea we have is to promote trade in Africa and this program clearly fits into the Africa continental Free Trade Area. Part of the things we are trying to identify African corporates that have potential to do trade in Africa by distributing them as Intra-Africa champions by providing finance to expand their businesses in Africa,” he said.
At least 170 financial institutions across Africa are set to benefit from Afrexim’s banking, and according to Obisesan, “this is the right time for financial institutions in Africa to deal with their reputable bank.”
With the available funding, financial institutions will be supported in pushing intra-African trade and facilitated in the purchase of equipment for production of export goods.
The $1 billion credit facility will run from one to two years from now – targeting short term trade deals, Obisesan told KT Press.
African Development Bank figures show that Africa’s short tern trade financing stand in the region of $120 billion.
Meanwhile, leaders of financial Institutions in Rwanda welcomed Afrexim’s program.
Maurice Toroitich – Managing Director of BPR Atlas mara, said the deal will vigorously facilitate Rwandan traders involved in export and import trade.
“This program will help traders exporting or importing goods across the continent. For instance, if a Rwandan trader wants to to import goods from Egypt, BPR Atlas will be giving him PLC confirmation letter and Afrexim bank will work as a guarantor, which facilitates the trader to easily pay,” he said.