Aiden K 
- Afreximbank:Championing Africa’s Economic Rise and Fueling Continents Future;
Afreximbank, was established in 1993 and known as the African Export–Import Bank, is a driving force behind the economic development of African nations.
Its diverse projects span numerous sectors, solidifying its position as a crucial linchpin in Africa’s economic progress.
Notably, it has been pivotal in supporting and promoting intra-African trade and economic integration, boasting a range of significant accomplishments in 2024.
The pan-African financial institution sees assets reach $33.5 billion, a reflection of the bank’s strong financial position demonstrating the confidence of investors and stakeholders in its commitment to long-term sustainability.
The Pan-African multilateral financial institution plays a pivotal role in promoting intra-African trade and economic integration.
This year alone, 2024 has witnessed significant accomplishments, with the bank securing over $5 billion in trade financing, a testament to its robust financial health and strategic vision.
The most recent is the June deal between the lender and the Africa Centers for Diseases Control and Prevention (Africa CDC) where a $2 billion facility in support of Africa Health and Pharmaceutical Products Manufacturing was pledged.
Through the collaboration,Afreximbank committed the facility to the “Africa Health Security Investment Plan” to support the health product manufacturing ambition of the continent.
The initiative seeks to focus on the African Pooled Procurement Mechanism (APPM) and the Platform for Harmonized African Health Products Manufacturing (PHAHM).
Further, the facility is keen to address Africa’s health investment challenges, promoting economic development, and strengthening health security across the continent.
It also intends to complement GAVI’s innovative financing mechanism, the African Vaccine Manufacturing Accelerator (AVMA) which is set to provide up to $1 billion financing to African manufacturers of health and pharmaceutical products over the next ten years.
Besides this, other initiatives by the bank have over the years empowered numerous African businesses by facilitating access to capital and fostering trade relationships across the continent.
Notably, also, the lender played a crucial role in supporting the implementation of the African Continental Free Trade Area (AfCFTA), furthering its mission to enhance economic collaboration and self-reliance within Africa.
AfCFTA, according to a joint report by the World Bank and the AfCFTA Secretariat, is poised to deliver far greater benefits in terms of jobs, growth, and poverty reduction than previously estimated, making it a potential game changer for Africa’s economic development if its ambitious goals are fully realized.
The deal creates a continent-wide market embracing 54 countries with 1.3 billion people and a combined GDP of $3.4 trillion.
Its first phase, which took effect in January 2021, would gradually eliminate tariffs on 90 percent of goods and reduce barriers to trade in services.
That could raise income by seven percent, or $450 billion, by 2035, reducing the number of people living in extreme poverty by 40 million, to 277 million.
The report also accounts for the additional benefits that would accrue from an increase in foreign direct investment (FDI), both from within and outside of Africa.
Additionally, the report also models what would happen if the agreement is expanded, as planned, to harmonize policies on investment, competition, e-commerce, and intellectual property rights.
It notes that deeper integration in Africa would help build fair and efficient markets, improve competitiveness, and attract even more FDI by reducing the risks of shifting regulations and policies.
This scenario would arguably bring income gains of 9 percent by 2035 and reduce extreme poverty by 50 million.
In line with the AfCFTA initiative, Afreximbank has also launched the “Afreximbank Trade Facilitation Program,” which aims to streamline cross-border trade by reducing transaction costs and improving logistics.
The programme provides trade confirmation services, trade confirmation guarantees and irrevocable reimbursement undertakings.
It is also designed to counter the recurring trend of reduction or withdrawal of trade lines to African banks by the international banks following the de-risking process.
The initiative is expected to significantly boost trade volumes between African nations, contributing to the continent’s economic resilience and growth.
Additionally, Afreximbank’s focus on sustainable development is underscored by its recent commitment of $1 billion to green and climate-resilient projects.
This investment aligns with the bank’s strategy to support environmentally friendly initiatives and sustainable economic practices.
Afreximbank’s President, Benedict Oramah on his highlight of the bank’s ongoing dedication to strengthening Africa’s economic framework says the lender’s core mission is to drive trade and investment across the continent.
Financial Performance
Afreximbank delivered exceptional financial results in FY2023.Largely propelled by the Bank’s and its subsidiaries’ growth, the Group’s results for the financial year ended 31 December 2023 demonstrate a strong and resilient performance, surpassing prior year results and well ahead of expectations.
The Bank remained steadfast in implementing its 6th Strategic Plan and delivering value to stakeholders, and this resulted in the Group ending the year, once again, achieving a solid performance and attaining an exceptional financial position.
The performance was largely enhanced by the Group’s ability to successfully execute its four strategic pillars focused on promoting intra-african trade; facilitating industrialization and export development; strengthening trade finance leadership and improving financial performance and soundness.
Net interest income reached $1.4 billion during the period, compared to $910.3 million in 2022.
The 58.67 percent increase was driven by the growth in interest income, which in turn was driven primarily by the growth in the Bank’s portfolio of loans and advances.
Net interest margin grew to 4.96 percent compared to the prior year’s level of 3.83%.
The Bank’s commitment to expanding its operations and supporting economic growth in Africa is reflected in its financial performance. The bank strategically invested in human capital and capacity building, leading to a 34.93% increase in operating expenses, reaching $304.5 million. This growth, however, was planned as part of the bank’s ongoing strategic plan, aiming to enhance its capabilities and deliver on its ambitious objectives.
This strategic approach translated into a substantial increase in total assets, reaching $33.5 billion, a 20.12% increase from the previous year. This growth was driven by increased lending activities and robust liquidity management. This growth further reinforces the bank’s commitment to providing vital financial services to its clients and supporting economic development across the continent.
The bank’s strong financial performance also resulted in a significant increase in shareholders’ funds, demonstrating the confidence of its investors in its growth strategy and commitment to a sustainable future. Shareholders’ funds saw a solid 17.55% growth, reaching $6.1 billion.
