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Afreximbank Seeks Improved Intra-Africa Trade

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President, AfreximBank, Dr. Benedict Oramah
  • Afreximbank Seeks Improved Intra-Africa Trade

For the umpteenth time, African Export-Import Bank (Afreximbank) has reiterated that active participation in intra-African trade will foster resilience in the region’s economies.

Already, the region’s biggest trade bank said the initial response to the call trade has made it possible for a number of African countries to record strong trade figures, amid persistent fall in commodity prices.

Afreximbank President, Dr. Benedict Oramah, in Addis Ababa, at the Africa Trade Facilitation Forum, organized by the African Union and the United Nations Economic Commission for Africa, said that a distinguishing feature of countries like Cote d’Ivoire, Ethiopia, Senegal, Rwanda, Morocco and Kenya, with economies growing at blistering paces, was their greater participation in intra-African trade.

Meanwhile, the bank has sealed a Dual Tenor-Dual Currency Syndicated Term Loan Facility, cumulatively worth $872 million, with strong support from its core relationship banks, for trade finance and general corporate purposes.

The deal, which involved 14 banks and 12 Initial Mandated Lead Arrangers and Bookrunners, saw the bank seal a $761 million and €105 million facilities.The 14 lenders that joined in the general syndication have been described as a balanced mixture of institutions from the Middle East, Europe and the Asia-Pacific region.

The Facility comprises a $316 million Tranche A1 and €105 million Tranche B, each with a tenor of two years, and a $445 million Tranche A2 with a tenor of three years.

Already, the margins of both the two and three-year tranches, at 130bp and 150bp respectively, represent the lowest levels that Afreximbank has paid for a syndicated loan.

“Kenya and Cote d’Ivoire’s intra-regional trade share of their respective total trade is 40 per cent and 32 per cent respectively. Intra-African trade has enabled the Kenyan shilling to remain reasonably stable when many others have been badly battered,” Oramah said.

For Nigeria, while the trade record made impressive rise in the third quarter, the directions of the transactions were dominated by Asia, Europe and United States, while Intra-African trade showed that imports were 3.6 per cent of the total.

Oramah said that intra-African trade had proven to be a buffer to external shocks and an instrument for structural transformation of commodity dependent African economies.

According to him, while Africa’s total trade in 2016 is expected to remain subdued, intra-African trade is expected to bounce back strongly to reach an estimated $180 billion, the same level attained in 2013, pushing its share of African trade to a new high of 19 per cent.

To this end, he said Afreximbank had introduced an Intra-African Trade Initiative under which it had committed to working with others to achieve more than 50 per cent growth in intra-African trade by raising the value from $170 billion in 2013 to $240 billion by 2021, a target of 22 per cent rise.

The bank was also aiming at formalising no less than 40 per cent of Africa’s informal cross-border trade.Noting that this is the time for trade facilitation and advocacy in accelerating intra-African trade, he warned that there is the need resolve issues of free movement and multiplicity of standards across the continent.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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