22 November 2017

Africa: South Africa, Eritrea Take Up Afreximbank's Shareholding

South Africa and Eritrea have taken up shareholding in the African Export-Import Bank (Afreximbank)- the continent's multilateral trade finance institution, in demonstration of their commitments to promoting intra-trade and economic integration.With the shareholding, South Africa becomes the 47th African country to join Afreximbank as a participating state and/or shareholder, while Eritrea is now the 48th.

South Africa is being represented by its Export Credit Insurance Corporation (ECIC) as the designated investor in line with the terms of the provisions of the Charter of the Bank.

"It is a significant vote of confidence to have South Africa join Afreximbank as a shareholder. South Africa accounts for about 30 to 35 per cent of total intra-African trade, making its membership critical for the attainment of the bank's strategic goal of moving intra-African trade share of Africa's total trade from about 15 per cent currently to 22 per cent by 2021 and raising its annual value to more than $250 billion by that year.

"We are confident that its membership of Afreximbank will enable it to play a significant role in driving trade across the continent," Afreximbank President, Dr. Benedict Oramah, said.

But the Chief Executive Officer of ECIC, Kutoane Kutoane, added: "We are humbled, while also motivated by the trust and confidence that the South African government has placed on ECIC to assume the role of designated institution for membership of the Bank."We are certain that South African exporters, especially our small and medium-sized exporters, will now have access to the expanded pool of structured trade finance facilities offered by the Bank."

Meanwhile, the instrument of accession, signed by Eritrean Minister of Finance, Berhane Habtemariam, and delivered to Afreximbank, declared the country's acceptance and accession to the "Agreement for the Establishment of the Bank" and committed to taking all necessary steps for the ratification of that agreement.

Eritrea's membership of Afreximbank came in the wake of a recent visit to Asmara by a delegation of the bank, led Oramah, during which Eritrean President Isaias Afwerki expressed the country's willingness to as member state.Afwerki said that Eritrea would aim to be an effective contributor in Afreximbank in order to encourage and ensure the creation of the environment for the delivery of the services for which the bank was created.

Under the terms of the agreement for the Establishment of the Bank, which was signed by Participating States in Abidjan on 8 May 1993, countries that did not sign on before it entered into force are required to first issue an instrument of acceptance and accession and then proceed to formally ratify the agreement in order to fully activate their membership of the bank.

The membership now gives Eritrea automatic access to the full range of products and facilities offered by Afreximbank.Afreximbank shareholders are a mix of public and private entities divided into four classes and consist of African governments, central banks, regional and sub-regional institutions, private investors and financial institutions, as well as non-African financial institutions, export credit agencies and private investors.

Class "A" shareholders are African states, African central banks and African public institutions, including the African Development Bank, while Class "B" is made up of African financial institutions and African private investors.

Class "C" shares are held by non-African investors, mostly international banks and export credit agencies, including Standard Chartered Bank, HSBC, Citibank, China Exim Bank and Exim India.Class "D" shares, a tier approved in December 2012, are fully paid value shares that can be held by any investor. SBM Securities, Mauritius, is currently the only investor in this class on behalf of holders of its depository receipts, which are listed on the Stock Exchange of Mauritius.

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