- Afreximbank’s additional financing of US$4bn for the Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA), consist of several types of credit facilities.
The recent intervention of the African Export-Import Bank (Afreximbank) with a multi-billion-dollar support to help member countries face the economic blow from the Russia-Ukraine war has come as a big relief to the members. The countries are struggling to cope up with the soaring import bill and foreign currency challenges caused by the Ukraine conflict. If left unattended, these issues could snowball into catastrophic social conditions and political crisis across Africa, noted the Bank.
Afreximbank’s additional financing of US$4bn for the Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA), consist of several types of credit facilities. The Bank reported that financing requests have already exceeded US$15bn.The initiative includes support to members to deal with high import bills for commodities such as oil, gas and wheat. The UN has already warned that the crisis could lead to food scarcity in many developing countries. The African Development Bank (AfDB) is also planning to raise $1 billion (Sh115 billion) to beef up agricultural production in Africa and stave off a potential food crisis.
UKAFPA funding for an oil and metals buy-back facility, allows African entities to refinance over-collateralised loans and free up cash for food, fertiliser and the servicing of debt. It also offers a facility to enable governments and companies to structure and enter derivative contracts at the current commodity prices and stabilise future export earnings. In addition, Afreximbank support will also help export-oriented projects to procure equipment and technology from abroad.
For tourism-dependent economies to cover foreign exchange revenue shortfalls arising from a fall in tourism arrivals from Russia and Ukraine, the tourism revenue deficit financing will be extended to Central Banks .
Afreximbank’s Pandemic Trade Impact Mitigation Facility (PATIMFA) that disbursed US$7bn in funding was launched in 2020 to support countries to battle the Pandemic. It was closed only last month.
