Addis Ababa, 08 February 2022: – African Export-Import Bank (Afreximbank) and the National Bank of Ethiopia (NBE) have signed a Memorandum of Understanding (MoU) to harmonise their efforts for the promotion of trade and investment flows between Ethiopia and other African countries.
The MoU was signed today in Addis Ababa by Professor Benedict Orama, President and Chairman of the Board of Directors of Afreximbank and Dr. Yinager Dessie, Governor of the National Bank of Ethiopia, in the presence of the Chairman of the Ethiopian Bankers Association, NBE executives as well as CEOs and Chairpersons of Ethiopian Commercial Banks.
Afreximbank and NBE have identified ten areas of collaboration, including support to the private sector and commercial banks through the provision of lines of credit of up to US$500 million to support trade activities under Afreximbank’s Africa Trade Facilitation Programme (AfTRAF).
AfTRAF is designed to enable and escalate trade activities and investments through the provision of bank-to-bank reimbursement undertaking facilities, issuances of promissory notes and bills of Exchange aval facilities, issuances of bonds, guarantees and indemnities facilities, as well as issuances of trade confirmation guarantee facilities, among others.
“AfTRAF incorporates various products devised to increase intra- and extra-African trade volumes, diversify the nature of trade, and assure the confidence of trade partners in the settlement of international trade transactions for critical imports into Africa, Said Prof. Benedict Oramah. “We committed in September 2021, following a mission of the Bank, to provide US$500 million to support Ethiopian commercial banks through AfTRAF. We are thrilled that only 5 months later, we are able to build on a long-standing partnership with NBE to work toward this goal and do even much more”
Indeed, under the terms of the MoU, the two institutions will also collaborate under the Afreximbank’s Central Bank Deposit Programme (CENDEP), which aims to attract a portion of the reserves of African central banks to support trade and economic activity. In addition, they will work with the Federal Ministry of Finance of the Republic of Ethiopia to arrange a financing structure to support importation of wheat by the Government of Ethiopia for strategic food reserves. The collaboration also covers NBE’s support for the allocation of foreign exchange to settle payment obligations related to the import of essential commodities by the Ethiopian government.
Dr. Yinager Dessie, Governor of the National Bank of Ethiopia, said that the signing of the MoU marks the beginning of a collaboration that will further involve NBE in the implementation in Ethiopia of several innovative Afreximbank initiatives.
“ We are impressed by the the Pan-African Payments and Settlements System (PAPSS), which was developed by Afreximbank to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa. We are delighted to have the opportunity, under the framework established by this MoU, to work with Afreximbank to join PAPSS. It is also an opportunity to work together on other exciting Afreximbank initatives, including the Central Bank Currency SWAP programme, the MANSA Due Diligence Platform, the Trade Intelligence Solutions and the Fund for Export Development in Africa,” said Dr Dessie.
Afreximbank will also consider supporting NBE under its Pandemic Trade Impact Mitigation Facility (PATIMFA) to enable Ethiopia meet trade and debt payments falling due, and to avert trade payment default.
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About Afreximbank
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. The Bank has a rich history of intervening in support of African countries in times of crisis. Through the Pandemic Trade Impact Mitigation Facility (PATIMFA) launched in April 2020, Afreximbank has disbursed more than US$7.5 billion since 2020 to help member countries manage the adverse impact of financial, economic, and health shocks caused by the COVID-19 pandemic. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched the operations of a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. At the end of 2020, the Bank’s total assets and guarantees stood at US$21.5 billion, and its shareholder funds amounted to US$3.4 billion. Afreximbank disbursed more than US$42 billion between 2016 and 2020. The Bank has ratings assigned by GCR (international scale) (A-), Moody’s (Baa1) and Fitch (BBB-). The Bank is headquartered in Cairo, Egypt.
For more information, visit: www.afreximbank.com.
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Amadou Labba Sall, asall@afreximbank.com