The African Export-Import Bank (Afreximbank) and the Export-Import Bank of China have signed a cooperation agreement to create a $1 billion China-Africa Investment and Industrialization Programme to facilitate the construction and creation of industrial parks and special economic zones on the continent.
The agreement, signed by Afreximbank President Dr. Benedict Oramah and Lui Liang, President of Export-Import Bank of China, during the 23rd Annual General Meeting of Shareholders of Afreximbank in Mahe, Seychelles, on Saturday, will have the two institutions work together to provide Africa with capacity for light manufacturing and primary processing of raw materials and commodities.
It would also cover logistics that facilitate intra-regional trade, such as shipping equipment, railways and rolling stock, and trade facilitating infrastructure, such as power.
Other aspects of the agreement include improvement in trade finance flows into Africa, through risk participation arrangements, cross-referral of business contacts, and indirect funding of Export-Import Bank of China to obligors through Afreximbank, as well as engagement in joint capacity building initiatives, including staff and information exchange.
Complementing the programme will be an engagement with the Made In Africa Initiative under which Afreximbank and the Initiative will develop and operate industrial and agro-processing parks to increase value addition on the continent.
Under the terms of a separate cooperation agreement, signed between Afreximbank and the Made in Africa initiative during the same ceremony, Afreximbank and the Initiative will also pursue the facilitation of investment flows into Africa by working with African governments to create, develop, and improve “soft” and “hard” infrastructure required for industrialization.
Signed by Dr. Oramah and Helen Hai, Founder of the Made In Africa Initiative, for their respective organisations, the agreement requires Afreximbank and the Initiative to also engage in the promotion of export trading companies to facilitate market access for “Made-in-Africa” goods; and in investment promotion, including capacity building and knowledge transfer.
Afreximbank will, in addition, work with the Initiative on the establishment of a pan-African equipment leasing platform to supply heavy duty and manufacturing equipment to support local content in the various sectors of the African economy.
“The Agreements signed here today will help create an effective and prudent framework which will allow us to reach our common goal, which is the pursuit of the industrialization and economic development in Africa,” said Dr. Oramah.
He commended the Chinese Government for the financing support it has provided for the development of critical sectors of the African economy through its major development institutions like the China Development Bank and the Export Import Bank of China, noting that the cumulative investment in Africa since 2000 had surpassed $80 billion.