Buhari pledges to broaden economy, harvest gains of intra-African trade
• Afreximbank commits $40b to boost continental trade in five years
President Muhammadu Buhari has assured that the Nigerian government will continue to support efforts to broaden the economy through multilateral financing.
He said this when the President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank), Prof. Benedict Oramah, paid him a courtesy call ahead of the opening ceremony of the second Intra-African Trade Fair Conference in Durban, South Africa, yesterday.
“I appreciate the support you are giving Nigerian businesses and, by implication, the Nigerian economy. Rest assured, you can count on me as you seek a better trade and investment climate in Africa,” Buhari noted.
Oramah, who came in the company of the Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene, thanked Buhari for honouring the invitation of the South African President to attend the Afreximbank-backed fair, alongside other Heads of State.
According to Oramah, the gesture clearly demonstrates that “President Buhari understands the importance of trade and how intra-African trade can help transform the African economy and, of course, that of Nigeria.”
He also appreciated the Nigerian leader for providing land and offering to attend the groundbreaking ceremony of the Africa Medical Centre of Excellence project, to be implemented by the continental bank in Abuja in December.
Oramah noted that Nigeria is an important market for the bank “with an exposure of $5.5 billion and it was therefore imperative that we continue to engage Nigeria at the highest level.”
He said Nigerian businesses got deals worth over $3.3 billion during the first edition of the event in Cairo, Egypt, stressing that more are expected at this year’s fair.
He gave assurance that Afreximbank would be ready to support business deals emanating from the event “especially considering the support we have seen from the President.”
He added: “Nigeria’s participation was essential, as the largest economy in Africa. Africa needs Nigeria as Nigeria needs Africa. Anything we do at the continental level that does not have Nigeria is seen globally as incomplete.”
WHILE addressing the opening ceremony of the event, Buhari said: “Let me assure you that Nigeria has come to Durban in full force to actively participate in this very important trade fair and take full advantage of all the opportunities it provides.
“We have streamlined the country’s participation under one roof to enable you to access all the information you need.”
The President expressed optimism that the creation of the biggest free trade area in the world will work, especially with the active collaboration of public and private sectors.
He canvassed support for the implementation of the free trade initiative, listing several benefits to the continent, including doubling trade in 10 years and reducing over-reliance on imports.
He also expressed concern that most of Africa’s existing challenges, whether security, economy, or corruption, can be traced to the inability, over the years, to domesticate the production of the most basic requirements and provide jobs to her dynamic youth population.
“Under the African Continental Free Trade Area, we can double our intra-African trade by 2030, reduce our reliance on imports and therefore create more jobs within the continent.
“We cannot achieve this goal by talking alone. The implementation will be a difficult journey. But all challenges are surmountable if both the public and private sectors collaborate,” he said.
MEANWHILE, Oramah disclosed that Afreximbank is committed to disbursing $40 billion to support intra-African trade over the next five years, building on the $20 billion disbursed in the past five years.
The commitment is in the backdrop of Africa’s determination to build its institutions as well as implement the African Continental Free Trade Agreement (AfCFTA).
He said the bank is also providing Letters of Credit Confirmation lines to African commercial banks to support cross-border trade.
“It is our aim to onboard 500 banks with aggregate lines of over $8 billion. The bank has so far onboarded nearly 480 and is today the bank with the widest messaging links with African banks,” Oramah said.
He said the bank is working with the African Union (AU) and the AfCFTA Secretariat to create a Pan-African Payment and Settlement System (PAPSS) to facilitate cross-border payments in national currencies.
The System, which is currently piloting in the West African Monetary Zone (WAMZ) will strengthen national currencies, integrate Africa’s payment infrastructure, and save the continent about $5 billion dollars in transfer charges.
Oramah said Afreximbank is supporting the pilot with $500 million and expects to expand this to $3 billion when fully adopted across Africa.
In his welcome address, former President of Nigeria, Olusegun Obasanjo said: “Despite the disruption caused by the COVID-19 pandemic, the momentum created the first Intra-African Trade Fair and launch of the AfCFTA to drive intra-African trade and integration need to be sustained.”