Afreximbank targets $4 bln FDI with Export Development Fund
African Export-Import Bank (Afreximbank) said it hopes to attract $4 billion foreign direct investment (FDI) inflow into Africa through its Fund for Export Development in Africa (FEDA).
Prof. Benedict Oramah, President of the Bank disclosed this while speaking in Tunis during the opening of the Financing Investment and Trade in Africa conference organized by the Tunisia-Africa Business Council.
He said that Afreximbank’s vision was to leverage $1 billion in support of FEDA’s mission and to catalyze four times that amount in FDI in five years.
He explained that the kind of equity funding currently available in Africa was not appropriate for turning the continent into the trade hub which it needed to become in order to achieve desired growth, saying that FEDA would ensure that investors’ investments were protected under the immunities and privileges available to Afreximbank and that the investments enjoyed tax privileges and incentives.
Oramah described development finance institutions as market failure institutions that existed to complement what markets were unable to offer or that begin to create markets, explaining that, as a result, Afreximbank’s interventions were based on the philosophy of bringing additionality, rather than displacing commercial banks.
Afreximbank was making it possible for financing to come into Africa, he said. The Bank had just expanded its guarantee offering to make it more accessible to companies coming into Africa, including through its Intra-African Investment Guarantee Facility. It had also introduced Mansa, a customer due diligence platform, which will help to address the challenge of many African countries not being able to access trade finance due to high compliance cost.