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China Development Bank, Afreximbank in $500m agreement to support Africa’s trade infrastructure

China Development Bank, Afreximbank in $500m agreement to support Africa’s trade infrastructure
Photo credit: Riccardo Gangale | Bloomberg

10 Sep 2018

China Development Bank (CDB) on 6 September 2018 in Changsha, China, signed an agreement providing a $500-million facility to the African Export-Import Bank (Afreximbank) to enable the African trade finance bank support trade enabling infrastructure projects across the continent.

The facility will also be used to support Afreximbank’s trade finance intermediaries to provide medium to long term financing for sub-projects in various sectors, including energy, telecommunication, transportation, agriculture, medical sector, industrial park or any related trade finance transactions. The facility carries a 10-year tenor.

Zheng Zhijie Liu, Vice Chairman and President of CDB, and Prof. Benedict Oramah, President of Afreximbank, signed the facility agreement on behalf of their two institutions during a ceremony held on the sidelines of the “4th Investing in Africa Forum” which took place in Changsha.

“This facility strengthens our capacity to realize our mandate and makes it possible for Afreximbank and CDB to achieve important development outcomes in Africa,” said President Oramah. “We are actively seeking to drive Africa’s development by working with partners to support employment creation, increased economic activities, and increased tax earnings for governments arising from increased commercial activities resulting in increased earnings and profitability”.

Prof. Oramah said that the facility would contribute to the promotion of South-South trade, particularly between China and Africa, while providing long-term funding which Afreximbank would transfer to its clients.

Also speaking, Mr. Zheng Zhijie said that, as a development finance institution of the Chinese government, CDB had always promoted China-Africa cooperation as the focus of its international business.

Since 2006, the bank had provided more than $50 billion for nearly 500 projects in 43 countries, he said. Those funds had been used to support a large number of key projects in infrastructure, energy and minerals, telecommunications, agriculture, etc.

Several other agreements involving other institutions were also signed during the ceremony.


The Fourth Investing in Africa Forum: Deepening Investment Cooperation and Harnessing Innovation for Sustainable Development and Shared Prosperity

Turning constraints into opportunities to attract and mobilize private sector investments, both domestic and foreign, is the guiding spirit of the fourth IAF. Forum participants reflected on what it would take to mobilize adequate private investment needed to transform African economies and generate much-needed jobs, through a focus on five central themes:

  • Agriculture and agro-processing

  • Education and skills development

  • Energy and climate change

  • Health, and

  • Digital economy and innovation

As Africa’s top trading partner and one of its largest investors, China-Africa engagement has expanded rapidly in recent years, reflecting China’s support for African development. Previous IAFs demonstrated that deepened China-Africa cooperation is mutually beneficial, and supports development strategies based on the comparative advantages of Africa countries.

During the first two Forums – held in Addis Ababa, Ethiopia and Guangzhou, China, respectively – participants addressed a set of topics grounded in Africa’s development priorities. The third IAF, held in Dakar, Senegal, addressed six thematic pillars and set the stage to catalyze a new generation of investment opportunities by leveraging technology and innovation to unlock Africa’s potential for accelerated and inclusive growth.

The Investing in Africa Think Tank Alliance also launched its first publication, Leapfrogging: The Key to Africa’s Development?, which identifies knowledge gaps and proposes practical guidance on how to spur leapfrogging in African countries.