Afreximbank unveils plan to ease Nigeria’s food, fuel crises through $4b support facility
The food and fuel crises in Nigeria could become a thing of the past.
This was as African Export-Import Bank (Afreximbank), yesterday, disclosed that discussions were ongoing to assist the country with the $4 billion Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA) launched last month.
At a virtual press conference, President and Chairman of Afreximbank, Prof. Benedict Oramah, noted that the country is in dire need of food support.
He said the bank is also expanding its support to Nigeria in the areas of fuel importation, in addition to provision made earlier by the bank.
He said: “Nigeria is an African Union and Afreximbank member and should be able to access the facility as a member country. We supported fuel import and we are expanding that because there are urgent needs. There are discussions currently going on with regard to food also. We are supporting Nigeria.
“We are living in an unprecedented time. Since two years, the world has been going through major challenges. The COVID-19 pandemic, which became a global challenge and crisis in the first quarter of 2020, is still raging.
“Again, early this year, the Ukraine crisis set in. The crisis was magnified by sanctions that have been placed and the fact that the war affects Ukraine in many other ways.
“Russia and Ukraine are the bread baskets of the world; they produce most of the world’s wheat, corn, corn flour, and a number of food items. The same thing applies to agro-chemical items, especially fertiliser. Africa is very dependent in all these. Many countries in Africa import most of their wheat and fertiliser from Russia and Ukraine.
“Tourism arrivals from Russia and Ukraine support economies of many African countries. So, with the war, and the sanctions that followed, all of a sudden, all these became threatened. So, the effect has been rising food prices and challenging economic situation. And there is indication that if this continues, the continent might run back into recession.”
Oramah stated that the $4 billion adjustment fund is a credit facility that the bank developed to manage the impacts of the Ukraine crisis on African economies and businesses, to free up cash flow, so that countries can meet urgent needs including food and fertiliser imports and service rising cost of debts.
He pointed out that the UKAFPA-compliant financing requests received from across Africa already exceeded $15 billion, and that there is urgency to meet these requests, to avoid catastrophic social conditions across Africa and reduce the risk of political crises and other social upheavals.
According to him, with the $4 billion already earmarked for the programme, the bank expects to generate up to $16 billion dollars, leveraging partnership and other intervention structures.
He said: “We use this opportunity to call on the international community to join us in this effort. This is really a call to action because we see, everyday, request from companies from various countries. We have made our own modest contribution; we are determined to do all we can, working with partners to deal with this urgent short-term demand.
“We have good relationship with the Arab world and all the big financial institutions. We have our institutions in Africa also, which we will approach to pull resources together. We also get support from European institutions. We also have structures to increase our capacity to be able to get more than $4 billion.”