Nigeria’s Zenith Bank receives $200m from Afreximbank to maintain its foreign currency trade flows

• As bank disburses $3.5bn to African lenders under PAMTIFA

According to Afreximbank, in a statement by Amadou Labba Sall to Business A.M., the funds will assist Zenith Bank to continue to maintain its foreign currency trade flows which have been adversely impacted by the COVID-19 pandemic. “They (disbursements) will also allow Zenith Bank to on-lend to eligible sub-borrowers involved in the manufacture and supply of medical resources needed to combat the COVID-19 pandemic,” Afreximbank said.

For Ebenezer Onyeagwu, the group managing director and chief executive of Zenith Bank, “the Afreximbank facility undoubtedly underscores the confidence reposed in Zenith Bank, and it will enable the bank to contribute to the fight against the COVID-19 pandemic by providing trade finance and foreign currency funding for the importation of urgent medical equipment and raw materials.”

Zenith Bank Plc is Nigeria’s largest bank by Tier-1 capital. The bank serves more than nine million corporate and individual clients through its network of over 500 branches across Nigeria and its subsidiaries in the Gambia, Ghana, Sierra Leone and the United Kingdom. It also has a representative office in Beijing, China, and Dubai (UAE) and a branch of the bank is in the United Kingdom.

With total assets of $16.1 billion, and revenue of $854 million as of 2019, Zenith Bank leads in the industry in terms of capital base, occupying the fourth place in banking in terms of balance sheet and third on profitability.

Benedict Oramah, a professor and president of Afreximbank, said the Afreximbank’s PATIMFA “is designed to support and stabilize the foreign exchange resources of African countries, enabling them to support critical imports under emergency conditions. We are pleased to contribute to keeping economies going, especially during this pandemic. The role that banks such as Zenith Bank play in Africa is huge.”

He said supporting African lenders to carry out their mandate is Afreximbank’s greatest contribution to making sure that African countries and institutions build back better from the shocks of the pandemic.

Oramah said PATIMFA was set up in March 2020 to provide financing to assist Afreximbank member countries to adjust in an orderly manner to the financial, economic and health services shocks caused by the COVID-19 pandemic.

The 3-year medium-term facility has been availed through direct funding. Afreximbank has already disbursed more than $3.5 billion under PATIMFA. In addition, the bank provided a grant of $3 million towards the COVID-19 special fund set up by the African Union, as well as to the African Centre for Disease Control (ACDC) and other agencies.

The president of the pan-African multilateral trade bank said, Afreximbank has a history of providing support to African economies in times of economic crisis. During the 2015 economic crisis, it introduced a Counter-Cyclical Trade Liquidity Facility under which it disbursed more than $10 billion on a revolving basis to enable member countries to adjust to the adverse economic shocks. That facility helped key African economies to manage that crisis and recover swiftly.