Afreximbank commit $500million to support Ethiopian Commercial Banks.

November 30, 2021

The African Export-Import Bank (Afreximbank) has pledged US$500 million to support Ethiopian commercial banks through the Afreximbank Trade Facilitation (AfTRAF) Program, which includes a variety of products aimed at increasing intra-extra African trade volumes, diversifying the nature of this trade, and ensuring trade partners’ confidence in the settlement of international trade transactions for critical imports into Africa. The program is designed to enable and escalate trade activities and investments by providing bank-to-bank Reimbursement Undertaking facilities, issuances of Promissory Notes and Bills of Exchange Aval facilities, issuances of Bonds, Guarantees & Indemnities (BGI) facilities, and issuances of Trade Confirmation Guarantee facilities, among other things. As part of a larger plan to strengthen its connections with and assistance for Ethiopia’s commercial banks, the Bank today sponsored a discussion bringing together key players and decision-makers from the country’s banking sector. The AfTRAF Program for commercial banks in Ethiopia, which aims to unleash funds to assist trade finance in Africa, is at the heart of this initiative and the topic of the event. Though the Bank’s Ethiopian interventions have traditionally been carried out through its relationship with the country’s largest financial institution, the Commercial Bank of Ethiopia (‘CBE’), with whom it has existing facilities and an active AfTRAF program, Afreximbank aims to develop strong partnerships with all commercial banks in Ethiopia and is actively pursuing its goal of signing up and providing the AfTRAF Program to 10 other commercial banks. The Governor of Ethiopia’s National Bank, Dr. Yinager Dessie, as well as the Chairman of the Ethiopia Bankers Association and the CEOs of Ethiopia’s 17 major commercial banks, were in attendance at today’s Business Forum. The whole spectrum of Afreximbank’s programs and facilities were presented to participants, as well as the Bank’s overarching purpose to encourage trade-in and between member nations. Afreximbank will also provide in-depth trade finance training to representatives from commercial banks as part of its ambitious capacity-building initiative in the nation. “Commercial banks play an important role in facilitating and promoting trade – a core ingredient of economic growth,” said Rene Awambeng, Global Head, Client Relations, Afreximbank. The Bank’s commitment to supporting Ethiopia’s efforts to increase its trade capacity and establish the expertise, infrastructure, and resources necessary to do so is demonstrated by today’s forum.” The meeting took place in the context of Ethiopia’s government’s far-reaching reforms to open up the country’s economy to private sector engagement. The work of the Ethiopian National Bank to reform the country’s banking system is at the heart of this economic liberalization. These improvements are expected to improve Ethiopian institutions’ ability to accelerate the development of the Ethiopian economy through trade and investments, notably commercial banks. Ethiopian trade with Africa and the rest of the world is expected to rise as a result of the reforms.

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