Afreximbank to raise $6.5bn equity through general capital increase

The African Export-Import Bank has embarked on a $6.5 billion general capital increase (GCI) to expand its capacity to deliver on its core mandate and diversify its range of services.

The GCI will enhance the pan-African multilateral trade bank’s capacity to support the procurement of COVID-19 vaccines for the continent, bolster post-pandemic recovery efforts for the economies of African nations and drive the implementation of the African Continental Free Trade Agreement (AfCFTA), among other strategic initiatives.

Recognising Afreximbank’s mandate and pivotal role on the continent, the African Union ministers of finance, the AU executive council, and the 34th ordinary session of the AU Assembly of heads of state endorsed the additional capitalisation of the bank.

African member states are expected to contribute up to $1.5 billion as paid-in capital ($3.9 billion in callable capital) to meet their total contribution under the GCI. The bank’s board of directors opened the GCI to other shareholders of the bank to contribute up to $1.1 billion to enable them to participate pro-rata to their shareholding in Afreximbank, bringing the total size of the GCI to $6.5 billion (of which $2.6 billion will be paid-in).

Benedict Oramah, Afreximbank’s president, said the GCI was approved by the bank’s shareholders during their 28th annual meeting in July 2021.

He said the bank expects to double its annual lending capacity and balance sheet size during the next five years, thereby further contributing to the reduction of the existing annual trade finance gap in Africa.

“I would like to thank Afreximbank shareholders for their support towards this important exercise. The General Capital Increase will enable Afreximbank to significantly increase its efforts to promote intra-African trade, drive export development and accelerate the continent’s recovery from the economic difficulties caused by COVID-19. This is a historic moment for the bank; it presents a great opportunity to deepen the bank’s capacity to deliver transformative growth across this continent.”

Afreximbank is a pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. It deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialisation and intra-regional trade, thereby boosting economic expansion in Africa.

Through the Pandemic Trade Impact Mitigation Facility (PATIMFA) launched in April 2020, the bank disbursed more than $6.5 billion in 2020 to help member countries manage the adverse impact of financial, economic, and health shocks caused by the Covid-19 pandemic. As supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has completed the development of a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union 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 $21.5 billion, with its shareholder funds amounting to $3.4 billion. The bank has disbursed more than $42 billion between 2016 and 2020.