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Afreximbank Approves $500Mn Support for Ethiopian Banks

afreximbank-logoThe African Export-Import Bank (Afreximbank) announced the approval of $500 million in support in the form of credit for Ethiopian commercial banks. The announcement came at the start of a three-day business forum being held in Addis Ababa starting Wednesday, September 15, 2021, organized by Afreximbank. The business forum holds the aim of promoting a trading scheme with Ethiopia's commercial banks.

So far, Afreximbank's business relations have been limited to just one bank in Ethiopia, Commercial Bank of Ethiopia. However, through its program dubbed Afreximbank Trade Facilitation Program (AfTRAF), Afreximbank aims to explore options of working with other commercial banks in Ethiopia as well by building strong partnerships.

Rene Awambeng, Director and Global Head of Client Relations at Afreximbank, said the bank's goal is to enable Africans to resolve African financial problems by themselves, rather than competing with other African banks. With this aim, he noted, Afreximbank has so far provided $25 billion in support of projects in the African finance and trade sectors.

The bank has also extended over $3 billion in support for 16 African countries for the fight against the coronavirus pandemic, according to the director, and will contribute $2 billion more for the purchase of the coronavirus vaccine. Mr. Awambeng remarked Ethiopian banks are "in good shape" despite the pandemic.

The $500 million Afreximbank pledged for support comes as part of the African Trade and Finance Facilitation (AfTRAF) program. Launched in August 2018, AfTRAF has been set up "to enhance the confidence of counterparties" for settling of international trade transactions within the African continent and beyond.

The support targets 11 commercial banks in Ethiopia for now. The support under the AfTRAF program covers five essential facilities: LC Confirmation Facility with optional discounting, Bank to Bank Reimbursement Undertaking Facility, Promissory Notes Bills of Exchange Aval Facility, Bonds, Guarantees Indemnities (BGI) Facility, and Trade Confirmation Guarantee Facility.

Afreximbank was established in October 1993 in Abuja, Nigeria in October 1993 jointly by African Governments, African private and institutional investors as well as non-African financial institutions and private investors for the purpose of financing, promoting, and expanding intra-African and extra-African trade. Ethiopia is one of the founders and shareholders of the bank.

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Sources: ENA, Ethiopian Monitor