July 20, 2008
Afreximbank has been Zimbabwe's single largest foreign financier over the years especially in the energy and mining sectors. The bank has financed the country’s importation of grain and oil, as well as through availing of pre and post shipping financing facilities to exporters.
The bank released a 13-point plan, which is its strategic vision that targets the expansion of intra- and extra-African trade through various initiatives that also strive to make Africa the Bank’s first market.
Zimbabwe’s mining sector has benefited immensely from funds from the bank as they have kept the sector afloat allowing it to reach export markets.
Although African trade with the European Union is estimated at around 65-70 percent and around 60 percent with Asia, intra-African trade is only about 16 percent. So far Afreximbank, the continent’s largest trade finance institution has launched two export development instruments, namely the Export Development Finance Programme and the Project-related Financing Programme, which aims to promote export manufacturing.
The two instruments aim to promote the diversification of Africa’s exports away from primary commodities. This goal is also linked to the bank’s objective of diversifying Africa’s markets both in terms of origin and destination of exports. Many analysts believe that boosting intra-African trade is the key to Africa’s integration into the global economy.
Since its inception in 1996, Afreximbank has financed trade in Africa but without a special focus on intra-African trade. More recently, specialized trade finance packages have been launched to address specific challenges, among them, syndications or club deals, forfaiting, direct financing programmes, country programme and special risk programmes and investment banking programmes.
Syndicated finance has or club deals to leverage international banks into financing deals they would not ordinarily support due to credit risk. Recent global macroeconomic developments such as rising oil prices, which have hit a majority of non-oil producing countries in Africa, have also seen an increase in the number of financing applications.
In 2006, the value of financing applications received by the Bank increased 39 percent compared to the previous year.
July 16, 2008
The United States signed a pair of agreements on July 16 to boost trade and investment ties with countries in southern and eastern Africa, the U.S. Trade Representative's office said.
The United States launched negotiations on a free trade agreement with the Southern Africa Customs Union (SACU) -- Botswana, Lesotho, Namibia, South Africa and Swaziland -- in 2003. When talks were suspended in 2006 because of differences over how much to lower trade barriers and other provisions of the proposed agreement, the two sides agreed to pursue a new type of pact, USTR said. The result was the Trade, Investment and Development Cooperation Agreement signed on July 16.
"This important agreement will provide a framework for the United States and SACU to work together to create the building blocks that strengthen and deepen our trade ties and that could lead to a free trade agreement in the long term," U.S. Trade Representative Susan Schwab said.
The United States also signed a Trade Investment and Framework Agreement (TIFA) with the East African Community, which includes Burundi, Kenya, Rwanda, Tanzania and Uganda.
"The EAC is one of the leading regional economic organizations in sub-Saharan Africa," Schwab said. "We see the TIFA as a major step toward deepening the U.S.-EAC trade and investment relationship, expanding and diversifying bilateral trade, and improving the climate for business between U.S. and east African firms," she said.
The signings came during an annual forum for talks between the United States and sub-Saharan African countries created by the 2000 African Growth and Opportunity Act.
They precede a high-stakes meeting next week in Geneva where the United States hopes African countries will support its position in talks aimed at reaching a breakthrough in long-running world trade talks.