In a significant move to empower African small and medium-sized enterprises (SMEs), the China Development Bank (CDB) and the African Export-Import Bank (Afreximbank) have sealed a transformative agreement. The accord, inked in Cairo, entails a US$400-million term loan facility provided by CDB to Afreximbank, with the primary aim of bolstering financing opportunities for SMEs across the African continent.
The agreement was formally signed by Mr Tan Jiong, President of CDB, and Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, at Afreximbank’s headquarters in Cairo. This strategic alliance seeks to invigorate African SMEs engaged in both intra- and extra-African trade, as well as those operating within productive sectors within Afreximbank Member States.
The seven-year tenor facility is poised to be directed towards eligible African SMEs that align with Afreximbank’s stipulated criteria. Alternatively, it may be channelled indirectly through local financial intermediaries, thereby expanding its reach and effectiveness.
Addressing the press after the signing ceremony, Prof. Oramah highlighted the ongoing challenges faced by African SMEs in accessing affordable financing. He expressed optimism in the CDB facility’s potential to provide a significant boost to SMEs by expanding the financial avenues available to them. Given that Afreximbank is securing the facility at favourable pricing and tenor terms, Prof. Oramah emphasised the institution’s commitment to transferring these financial benefits to the ultimate beneficiaries – the African SMEs.
The strategic partnership between Afreximbank and the China Development Bank has evolved over the past six years, marked by multiple interventions by CDB to support Afreximbank’s initiatives. Prof. Oramah lauded the strengthened collaboration, highlighting its potential to align with their shared developmental goals. The envisioned outcomes include job creation, economic growth, and an increase in extra-African trade, particularly with China.
The collaborative initiative’s significance extends beyond financial transactions; it underscores the potential to transform the business landscape for African SMEs. As the two financial giants align their resources, their joint commitment to boosting Africa’s economic activity and fostering a more resilient entrepreneurial ecosystem stands poised to deliver long-lasting and far-reaching benefits.
