Abu Dhabi, UAEWednesday 1 April 2020

Afreximbank launches $3bn facility to help African nations deal with virus fallout

Financing will be available through direct funding, lines of credit, guarantees, cross-currency swaps and other similar instruments

An empty street in Dakar, Senegal during curfew in an effort to to fight the coronavirus outbreak. AP Photo
An empty street in Dakar, Senegal during curfew in an effort to to fight the coronavirus outbreak. AP Photo

The African Export-Import Bank (Afreximbank) announced a US$3 billion (Dh11bn) facility to help African countries deal with the economic fallout from the coronavirus pandemic.

Afreximbank will use the Pandemic Trade Impact Mitigation Facility (PATIMFA) to disburse financing to its 51 member central banks and other financial institutions, it announced on Wednesday. These funds will also be used for emergency imports of key medical supplies and hospital equipment into these countries.

The facility – available through direct funding, lines of credit, guarantees, cross-currency swaps and other, similar instruments – will help financial institutions to meet trade debt payments that fall due and to avert trade payment defaults.

It will also be available to support and stabilise the foreign exchange resources of central banks of member countries, enabling them to support critical imports under emergency conditions, according to Afreximbank.

“The Covid-19 pandemic brought with it considerable suffering and major economic disruptions,” Benedict Oramah, president of Afreximbank, said.

“A rapid and impactful financial response is required to avert a major crisis in Africa,” he said, adding that the continent is exposed on many fronts, including “significant declines in tourism earnings, migrant remittances, commodity prices and disruption of manufacturing supply chains”.

The Afreximbank initiative follows the International Monetary Fund and World Bank’s calls to support nations that are struggling to deal with the impact of the global pandemic. Covid19 has infected more than 435,000 people worldwide and fatalities have crossed 19,000, according to Johns Hopkins University, which is tracking global data on the outbreak. More than 111,000 people have also recovered so far.

The IMF and World Bank have pledged $50bn and $14bn, respectively to help some of the poorest nations to deal with the virus breakout. They have also called on other multilateral banks to financially support the countries in need across the globe.

Africa has so far not been hit very hard with the virus outbreak but the number of confirmed cases has risen over the past few days. South Africa, which has more than 709 confirmed cases of Covid-19, is enforcing a 21-day lockdown in an effort to contain the virus spread.

Updated: March 25, 2020 06:39 PM

SHARE

SHARE

Most Popular