The African Export-Import Bank (Afeximbank) has approved and disbursed many credit facilities in support of Egyptian corporations and financial institutions, as it has approved credit facilities in excess of $17.5bn since 1993, according to Managing Director of the Intra-African Trade Initiative at Afreximbank Kanayo Awani.
During the “Facilitating Trade between Egypt and the Rest of Africa” workshop held Monday, Awani said that the bank provides support for a number of initiatives such as Counter-Cyclical Trade Liquidity Facility (COTRALF) to address financial liquidity gaps arising as a result of adverse economic shocks, especially commodity prices and terrorism-induced ones, and the Egypt-Africa Trade Promotion Programme (EATPP) launched in January 2015 to help Egyptian entities tap into the rapidly expanding trade and investment opportunities in the rest of Africa.
Awani added that a number of Egyptian companies (such as Giza Cables, Elsewedy and Arab Contractors) have also taken advantage of the bank’s financing to access guarantees to facilitate their business in Africa and see remarkable growth in their business.
At the recently concluded Africa 2017 summit in Sharm El-Sheikh, Afreximbank signed a new loan agreement with the Export Development Bank of Egypt, worth $500m as additional export credit finance support to Egyptian business seeking to expand their trade in Africa.
“However, intra-African trade remains the arrowhead of this Strategy and it is in this context that in 2016, the bank launched a dedicated Intra-African Trade Strategy and created a new division—the Intra-Africa Trade Initiative (IATI)—which reports directly to the bank’s president with ambitions to see the volume of intra-African trade grow from current levels of $170bn in 2014 to $250bn by 2021,” she noted. “The division has two units dealing with trade finance and trade facilitation.”
The share of merchandise trade for Egypt and China in Africa, as a percentage of GDP, was between 30% and 40%, whilst the manufacturing added value was around 17% for Egypt and 31% for China, according to Awani.
She pointed out that Egypt’s exports matched the total imports of most African economies, sometimes better than China. In addition, Egypt has other advantages over many Asian economies that could have accelerated their trade with Africa.
She said that the share of Asia (and China) in African trade grew exponentially over the last decade whilst the share of Egypt’s trade in Africa stagnated and even reduced. For instance, unlike China, which grew its share of African trade from less than 3% in 1990 to over 17% by 2013, Egypt’s share of the continent’s trade averaged about 0.5% over the last three decades.
“In 2015, Egypt’s exports were $29bn and its imports were valued at $72bn. Of this, Egypt’s exports to Africa accounted for only $3.2bn and its imports from Africa accounted for $1.3bn,” said Awani. “Egypt’s main exports are mineral products (30%), textiles (12%), chemicals and related industrial products (11%), and vegetable products (10%). Its main export partners are Saudi Arabia, Germany, Italy, and the US. No single African country exports more than 1% to Egypt.”