BY EMEKA EJERE
The implementation of the African Continental Free Trade Area (AfCFTA) would spur Africa’s industrialisation and long-term supply chain resilience.
Executive Vice President in charge of Business Development and Corporate Banking at Afreximbank, Mr. Amr Kamel, stated this on Tuesday at the opening of the bank’s annual Trade Finance Seminar (ATFS) and workshop.
The Afreximbank Trade Finance Seminar and Workshop which is now in its 21st edition, attracted over 500 participants, including senior executives from African banks, financial institutions, regulatory institutions, hedge funds, Africa country funds, venture capital institutions, corporate entities engaged in trade, manufacturing and privatised infrastructure projects, Afreximbank’s trade finance intermediaries, African law firms, and insurance firms.
Welcoming participants to the two-day seminar and workshop held virtually this year, Mr. Kamel said by addressing the fragmentation of African economies, the AfCFTA had the potential to foster regional integration and intra-African trade which could help spur industrialisation and build long-term supply chain resilience.
He noted that the export sector inherited from Africa’s former colonial powers effectively forced the demise of African industry and created a reliance on imported manufactured goods.
According to Kamel, the establishment of the AfCFTA marked a strategic shift from small and fragmented markets across Africa towards regional markets that offered greater opportunities for economies of scale and for the deployment of regional integration to drive trade and development.
“The continent’s leaders and its people recognized that working collectively is the best way to reverse trends that have seen Africa stuck on a 3% share in global trade, 15% in intra-African trade, and one of the world’s least diversified export baskets,” said Kamel.
He, however, warned, “A major challenge to the AfCFTA is the high trade finance gap, estimated at US$82 billion, according to a recent Trade Finance Survey jointly conducted by Afreximbank and the AfDB,” saying, “this lack of adequate trade finance is a significant non-tariff barrier to trade and can limit the full trade potential of the AfCFTA.”
Mr. Kamel announced that Afreximbank had taken a series of steps to support African trade and the implementation of the AfCFTA, including helping to fill both financing and knowledge gaps in Africa’s trade finance market.
He said that this year’s ATFS would be “a competitive, industry-focused educational programme that will provide African bankers, businesses and professionals with an understanding of all aspects of international trade including the financing of international trade.
Being held under the theme ‘Power to Trade: Financing African Trade in the AfCFTA Era’, the event featured presentations and panel debates by experts on a wide range of trade finance topics, including how the COVID-19 pandemic and the discontinuation of LIBOR are affecting trade finance. Discussions also covered factoring, innovations in structured trade and commodity finance, digitisation in trade, and trade information’s role in reducing risk.
Attendees were also acquainted with the benefits they can gain from Afreximbank’s Pan-African Payment and Settlement System and the Bank’s MANSA repository for Client Due Diligence.
Delegates attended a series of virtual Syndications & Agency workshop, specially designed for bankers, traders and financiers to increase their knowledge, covering such topics as: the syndication process, Loan Market Association and associated finance documents; Loans Agency and Security Trustee Functions; syndications and agency functions as products within the overall organisational set-up of financial institutions.