The African Export-Import Bank (Afreximbank) has signed a collaborative package with the Export Development Bank of Egypt (EBE) on a $500 million scheme to support exports and investments by Egyptian businesses to other African countries.
The Export Credit Support Scheme (ECSS) was endorsed by both organizations on the sidelines of the Africa 2017 Forum holding in Sharm El Sheikh, Egypt.
The agreement covers a combination of programmes/products and services offered by Afreximbank through a partnership with EBE to protect against the risk of non-payment for loans or advances granted to exporters to meet short or medium-term export contracts.
According to the terms of agreement signed by President of Afreximbank, Dr Benedict Oramah and Chairperson of EBE, Mervat Soltan, the ECSS’ beneficiaries must be exporters domiciled in Egypt and the products must be of Egyptian origin.
It also states that to access the facility, importers must be African and located in one of Afreximbank’s member countries.
Afreximbank President, Dr Oramah, who spoke at the signing ceremony, said the ECSS would assist Egyptian exporters to develop their industries and boost their exports to other African countries.
He also said that the development would enable exporters to compete on near equal footing with exporters from the more developed economies.
The Bank President said ECSS, implemented,under the strategic initiatives of both banks to boost industrialization and intra-African trade, is supporting development objectives of Egypt and would further deepen Afreximbank’s relationship with Egypt and the Egyptian financial sector.
Dr Oramah further said the scheme is building on other schemes and special programmes being implemented by Afreximbank in Egypt, including the $500-million Egypt-Africa Trade Promotion Programme that had been fully utilized, explaining that the Bank gave adequate support to the Egyptian economy during the global economic challenges of 2015 and 2016 when it disbursed over $7 billion to Egyptian entities.
In his remarks at the Forum, Governor of the Central Bank of Egypt (CBE), Tarek Amer said the scheme represented a substantial cooperation and financing opportunity aimed at empowering the Egyptian private sector.
He expressed confidence that with its provision of banking and financial support to Egyptian businesses, the agreement would enhanced export trade between Egypt and the rest of Africa
Also speaking, the EBE boss, Ms Soltan said the agreement signing represents a strong recognition of both institutions’ shared value in contributing to the growth of trade and investments among African countries.
For her, the EBE had a long experience in promoting trade links between Egyptian businesses and their counterparts in other African countries, adding that it would bring that huge experience to bear in driving the new scheme’s implementation.
Meanwhile, the deal specifies that the ECSS will initially be implemented by Afreximbank, in collaboration with EBE, which has the knowledge, information and expertise about Egyptian exporters to African markets, but with the likelihood of extending to other Egyptian banks through the EBE.
The scheme also provides for support from the Export Credit Guarantee Company of Egypt (ECGCE), where the EBE holds majority ownership, to partially cover and share transaction risk.
Other services expected under the scheme include assistance to Egyptian Export Promotion Councils and Business Associations to undertake export promotion activities for Egyptian products and commodities in African countries; as well as assistance to organisations and trade bodies undertaking exclusive non-recurring innovative activities connected with export promotion efforts for their members.
In addition, the Scheme will provide networking opportunities and twinning services through facilitation of contract awards by African governments to large Egyptian exporters and support of partnerships among “actors” in intra-African trade; even as it offers market information and advisory services to Egyptian exporters as well as support in organizing intra-African trade fairs and exhibitions.
