Afreximbank Spends $1.5B to Promote Trade Finance in Caribbean

Trade finance firm Afreximbank has allocated $1.5 billion to help Caribbean countries access its services.

The Cairo-based company announced the arrangement Monday (Dec. 26), saying it followed the addition of nine Caribbean countries to its Afreximbank Partnership Agreement at the first Africa-Caribbean Trade and Investment Forum (ACTIF) in September.

The financing will help these countries access funding for things like tourism, healthcare, renewable energy, shipping, mining, agriculture and agribusiness, air links and aquaculture. Afreximbank will also look for ways to help small businesses in these countries, the company said in a news release.

“These key sectors were identified following several Afreximbank-led business development and trade and investment promotion missions to the Caribbean,” the release said.

Afreximbank, or the African Export-Import Bank, aims to “finance and promote intra-and extra-African trade.”

In September, Afreximbank launched a payment service called AfPAY, designed to facilitate easier transactions among African financial institutions.

“Afreximbank developed the product specifically to address the banking challenges confronting African economies due to the withdrawal of many international banks from the continent — exits attributable to stringent regulatory and compliance requirements as well as costs,” the company said in its announcement. “Trade is the number one driver of growth, and banks’ inability to participate in trade transactions will lead to reduced growth in our economies and increased poverty.”

As PYMNTS wrote in October, Afreximbank is among a group of pan-African banks founded in the late-twentieth century to reduce Africa’s dependence on European institutions and financially empower governments and businesses on the continent.

“Africa is often lagging behind when it comes to global trade, but in recent years, projects aimed at building a more autonomous pan-African economy, many of them under the rubric of the African Union (AU), are seeking to redress that balance and secure a more prosperous future for Africans,” we wrote.

A major component of the AU’s economic vision is upping the volume of trade between African countries and ensuring that the continent’s wealth is fairly distributed.

To this end, the United Nations Conference on Trade and Development (UNCTAD) earlier this year signed a Memorandum of Understanding with the African Continental Free Trade Area (AfCFTA) Secretariat to support their joint efforts to promote regional integration and growth.

The AfCFTA is designed to foster stronger economic ties and boost intra-African trade by lowering tariffs and other barriers to transporting goods between countries.

“With the ultimate goal to establish a customs union similar to that found in the EU, the AfCFTA is the most ambitious attempt at pan-African economic integration to date,” PYMNTS wrote.

For all PYMNTS B2B and EMEA coverage, subscribe to the daily B2B and EMEA Newsletters.