The African Export-Import Bank, Afrximbank has unveiled a $1.5 billion collaborative COVID-19 Pandemic Response Facility (COPREFA) to back African economies with rapid financial assistance to reduce the impact of COVID-19.
Afreximbank and its collaborators in Cairo, Egypt made this known in a joint statement on Wednesday.
The collaborators are the pan-African multilateral EXIM bank, International Islamic Trade Finance Corporation (ITFC), the Trade Finance Arm of the Islamic Development Bank (IsDB) Group and the Arab Bank for Economic Development in Africa (BADEA).
The bank said COPREFA would be accessed by eligible central banks, commercial banks and businesses to finance the import of medical supplies.
It said it would also be used to finance agricultural equipment and fertilisers, essential for addressing the pressing food production deficit.
“COPREFA is designed to support African economies to overcome myriads of challenges including commodity price shocks, a significant drop in tourism and disruption to supply chains and export manufacturing.
“It will also address the sudden declines in financial flows, including a drop-off in trade and project finance, migrant remittances, portfolio investment and Foreign Direct Investments.”
The bank said that a key attribute of the COPREFA facility was the speed at which financial assistance could be provided through all partners involved.
It said that the impact of the COVID-19 pandemic had proven to be fast-paced, requiring support that could be deployed quickly and flexibly to prevent sharp declines in national economies.
Afreximbank said that standard eligibility criteria and credit appraisal process had been developed by COPREFA partners to facilitate implementation of the facility.
“Support will be available through direct funding, lines of credit, confirmation and refinancing of documentary credits; guarantees, cross-currency swaps and other similar instruments, it said
“The co-financed facility led by Afreximbank leverages strategic partnerships with other Multilateral Financial Institutions and other international financial institutions in co-financing, risk sharing of transactions and promoting integrated trade solutions to support African economies on navigating the impact of COVID-19.”
Itemising some of its achievements in Africa, the bank said it had a strong track record of supporting African economies during financial crises.
“In 2015, the bank disbursed more than 10 billion dollars through a Counter-Cyclical Trade Liquidity Facility (COTRALF) to help member countries manage the adverse economic fallout of commodity price shocks.
“In March 2020, a financial package called the Pandemic Trade Impact Mitigation Facility (PATIMFA) was launched solely by Afreximbank to support economies through the pandemic – a facility of which over five billion dollars has been disbursed, will be implemented alongside COPREFA.”
The President of the bank, Prof. Benedict Oramah, said Afreximbank’s priority had always been to step-up when markets fell.
“That is why we are supporting African economies forcefully at the time of great difficulties.
“COPREFA, a product of a unique international partnership, is a major contribution to the global fight against the pandemic and will work alongside our other programmes to ensure Africa’s future remains bright beyond this economic shock.”
Mr Hani Salem Sonbol, the Chief Executive Officer of ITFC said that providing fiscal bandwidth and practical support to Small and Medium Enterprises and medical communities in African countries would deliver immediate relief from the supply side restraints on personal protective equipment caused by the pandemic.
“ITFC has worked extensively since the very start of the COVID-19 outbreak to provide comprehensive support to some of the most vulnerable countries.
“The multilateral arrangement that ITFC is embarking upon with our strategic partners will boost economic activity when and where it is needed most.
“It will also help many countries maintain food security at a time when global commodity supply chains are being challenged and import activity sharply reduced.”
Dr Sidi Tah, the Director-General of BADEA said BADEA with its partners had supported and would always support the continent through tough and good times as a reliable, strong and resourceful financial institution.
“Since the COVID-19 pandemic posed drastic challenges that are reshaping the scene of the global economy; we sought that it will require unprecedented cooperation and measures to tackle these challenges.
“BADEA has joined the fight against the pandemic by allocating a gross amount of more than 500 million dollars in COPREFA and other initiatives.”
Tah said that the allocations would be utilised to ease the negative impacts of the pandemic on African economies and ensure the flow of essential strategic commodities to the continent.