Afreximbank approves $200m facility for Egypt, delays Nigeria’s $450m loan

The African Export-Import Bank (Afreximbank) says it has approved a $200 million) facility for Egypt to boost Small and Medium Enterprises (SMEs) in that country.

The President of the bank, Dr Benedict Oramah said this in a statement issued on Friday in Lagos.

The approval is coming on the heels of the bank’s delay in releasing the $450 million promised Nigeria and Kenya and other shareholders to promote multilateral-trade relationship.

The facility approved in April 2017, with the African Development Bank (AfDB) endorsement, was to have been released before the end of the second quarter of 2017.

But it is yet to be made available to the Ministry of Industry, Trade and Investment, even as the country is about to go into the third quarter.

An aide to the Minister, Okechukwu Enelamah, said Nigeria and other countries expected to draw from the funds had been meeting with their respective apex banks, through which the money is to be disbursed.

“The approval of the fund was in principle, in the sense that donor- counties were still awaited by the special bank to live by their words.

‘It is therefore not strictly the fault of Afreximbank that the money has not been released, he said.

Other shareholders of the bank in Africa, were said to have each applied for different loan facilities.

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But the earlier position was that Nigeria, as a major shareholder should be the last to apply for fund from the bank.
However, this was distorted since 2015 when the country could not meet its obligations to some organisations, with recession worsening the situation in 2016.

Said Mr. Robert Ewang, an economist with KPMG: “If things were to go according to expectation, Nigeria should have not been among the countries to draw any loan in the (Afreximbank) bank.

“The reason being that it is one of the founding farhers of the bank, and apart from South Africa, Nigeria’s economy is the best with potentiality to serve as a big brother in the African continent, which is to assist other African contrires benefit from the organisation.

“Nigeria is a member of the board of directors of the bank and a major shareholder, which hosts the bank’s biggest branch in Africa in Asokoro, its Federal Capital Territory; so going for loan in the bank is akin to the United States applying for loan from IMF/World Bank.”

But the Central Bank of Egypt, which will act as the procurement guarantor, with an Arab-African International Bank, Banque Misr, serving as custodian for the loan facility, was said to have given conditions under which applicants for the facility wil be met.

“The facility will help to expand Egypt’s industrial base and create jobs for the country’s youths.

“It is a continuation of the programmes and facilities we have been implementing in recent years in support of the country’s economic and financial reforms,” the bank stated.

Chairman of Banque Misr, Mohamed Eletreby commended Afreximbank for its continued support to the Egyptian bank, adding that the facility would create opportunities for businesses operating in the informal sector to join the formal economy.

“It would also provide the means for SMEs to integrate into Egypt’s industrial value chain, thereby, contributing more effectively to the country’s growth,” he added.

Afreximbank, which has its headquarters in Cairo, was established in October 1993, by African governments, African private and institutional investors, and non-African investors.

 

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