WORLD BANK, AFDB PRO­JECTS RULE ROOST

The East African - - NEWS - By NJI­RAINI MUCHIRA Spe­cial Cor­re­spon­dent

East Africa has emerged as a big ben­e­fi­ciary of donor­funded de­vel­op­ment pro­jects on the con­ti­nent.

MUL­TI­LAT­ERAL TRADE fi­nancier African Ex­port-im­port Bank (Afrex­im­bank) is seek­ing to mo­bilise up to $1 bil­lion in equity from new and ex­ist­ing in­vestors over the next five years to fi­nance more trade deals on the con­ti­nent.

The bank hopes to dis­burse $90 bil­lion for in­dus­tri­al­is­ing Africa, boost­ing trade among coun­tries as well as with the world in an era of ris­ing pro­tec­tion­ism.

World Bank data shows that in­tra-african trade has in­creased over the past decade, cur­rently ac­count­ing for about 15 per cent of the con­ti­nent’s to­tal trade. How­ever, it re­mains the low­est of any con­ti­nent, con­sid­er­ing that in­tra­trade in Asia and Europe stands at 50 per cent and 70 per cent re­spec­tively.

Afrex­im­bank has launched the cap­i­tal drive in Nige­ria and Kenya, seek­ing to raise $300 mil­lion through the is­suance of de­posi­tary re­ceipts. The min­i­mum in­vest­ment amount is $30,000.

“The de­posi­tary re­ceipts will be listed on the Mau­ri­tius Se­cu­ri­ties Ex­change, en­abling in­vestors to ben­e­fit from a liq­uid and freely trans­fer­able in­stru­ment said Afrex­im­bank ex­ec­u­tive vice-pres­i­dent Ge­orge Elombi.

An ad­vi­sory syn­di­cate made up of SBM Group of Mau­ri­tius as lead ar­ranger and Kenya-based CBA Cap­i­tal and Li­ons Head Cap­i­tal as co-ad­vi­sors will han­dle the is­suance.

Ac­cord­ing to Afrex­im­bank, the size of in­tra-african trade could be dou­bled from the cur­rent $170 bil­lion per year to al­most $400 bil­lion.

The level of in­tra-africa trade com­pares poorly with Europe, where it is es­ti­mated at a stag­ger­ing $6 tril­lion.

Apart from fi­nanc­ing set­backs, the lack of mar­ket in­for­ma­tion on the con­ti­nent has also been cited as a key im­ped­i­ment to the growth of in­tra-africa trade.

Es­tab­lished in 1993 with the main ob­jec­tive of fi­nanc­ing and pro­mot­ing in­tra and ex­tra African trade, Afrex­im­bank share­hold­ing mainly com­prises of African govern­ments, African pri­vate and in­sti­tu­tional in­vestors and non-african in­vestors.

The lender has ap­proved more than $51 bil­lion in credit fa­cil­i­ties for African busi­nesses, in­clud­ing about $10.3 bil­lion in 2016. By the end of last year, the bank boasted a to­tal as­set base of $12 bil­lion.

Pic­ture: File

An in­land con­tainer de­pot in Nakawa, Uganda.

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