Ecobank Transnational Incorporated (ETI), on Tuesday said it has signed a Memorandum of Understanding (MoU) with the African Export-Import Bank (Afreximbank) to facilitate trade and investment in the 36 member-countries where Ecobank also has presence.
In a statement by ETI to the Nigerian Stock Exchange (NSE), both parties, while promoting joint corporate objectives through financing of private sector projects and trade finance transactions, “will support efforts at promoting intra-African trade, facilitating industrial development and export development, and strengthening African trade finance leadership, with the ultimate goal of transforming the African continent.”
The deal would see the parties designing joint innovative and tailor-made financial instruments and solutions to support private sector corporates and select strategic public sector institutions.
Afreximbank and Ecobank also plan to support small and medium scale enterprises enabling them engage in production of value-added goods and services in national, regional and continental value chains.
The various initiatives is expected to create a US$500m programme dedicated to financing trade among Afreximbank member nations where Ecobank has subsidiaries, besides offering both partners opportunities to explore other cooperation in financing trade operations by way of exports and imports on the continent.
The interventions will be through co-financing, loan syndication, risk sharing or other appropriate cooperation modes between Afreximbank, established in October 1993 by African governments and private institutional investors with $9.4 billion total assets, over $51 billion in credit facilities, including $10.3 billion in 2016; and 29-year old ETI with a network of 1,200 branches across 36 African countries.
Commenting on the deal, Group Chief Executive Officer of Ecobank Group, Ade Ayeyemi, described the deal as a win-win collaboration and cooperation “that will lead to a more efficient way of channeling trade finance towards supporting growth of intra-African trade and industrialization.”
For Dr. Benedict Oramah, Chairman and President of Afreximbank since September 2015, “inadequate access to trade finance remains one of the greatest obstacles to Africa’s economic development.
“This collaboration with Ecobank opens up more opportunities for African businesses to access much-needed financing for their trading activities,” he added, expressing pride at the opportunity to work with a pan-African financial institution like Ecobank to deliver on its shared goal of enhancing access to trade finance in Africa.