The African Export-Import Bank (Afreximbank) has urged the government and other African countries to prioritize the establishment of public and private export trading firms (ETCs) in order to position the continent’s SMEs to participate successfully in global trade.
Afreximbank’s Executive Vice President, Intra-African Trade Bank, Kanayo Awani, speaking on behalf of the bank’s President, Prof. Benedict Oramah, said in an address at the Africa International Exhibition, which opened yesterday on the sidelines of the United Nations General Assembly in New York, that SMEs participating directly in global trade faced stiff competition from multinational and significantly large corporates, making their chances of success or survival slim.
Awani observed that Asia had handled this difficulty by establishing ETCs to serve as conduits for SMEs to reach global markets, noting that ETCs acted as aggregators and generated a substantial volume of commerce that attracted greater value and withstood competition.
She stated that Africa’s SMEs’ limited participation in global value chains reflected institutional policy failure and called for strong policy support systems that would provide capacity development, incipient protections from unfair competition, improved access to regional markets, and access to finance, adding that these support systems are especially important as Africa begins to implement the African Continental Free Trade Agreement (AfCFTA).
According to her, SMEs have been a central focus of Afreximbank’s continental interventions over the years, with unique funding instruments to bridge the financing constraints faced by African SMEs, including products such as factoring, supply chain finance, and intermediated financing.
She stated that Afreximbank was the primary proponent of factoring in Africa, and that the factoring law it sponsored had been implemented in the Republic of Congo, Burkina Faso, Niger, Togo, Mali, and Cote d’Ivoire, and that regulatory authorities in numerous additional African nations were considering it.
Awani also announced that Afreximbank had launched a $1 billion Creative Africa Nexus (CANEX) programme to provide access to finance, capacity building, digital solutions, and other support to the African creative industry, noting that the industry had become one of the continent’s fastest-growing areas and that creatives had surpassed traditional export goods in Nigeria, South Africa, and a few other countries. The bank had disbursed approximately $120 million to help the industry.
She added that the bank was also assisting African SMEs with market access through the African Trade Gateway, a digital ecosystem comprised of assets designed to address non-tariff barriers, such as the MANSA customer due diligence repository platform, which collects KYC information from SMEs and corporates and has already onboarded over 11,000 entities.
She noted that the Intra-African Trade Fair was a great platform for fostering the integration of SMEs into continental value chains by boosting linkages and networking, saying that the fair’s third edition will be held in Cairo in November.
President Bola Tinubu of Nigeria, who was represented by the Minister of Industry, Trade, and Investment; Dr. Doris Uzoka-Anite, Nigerian Minister of Aviation and Aerospace Development; Festus Keyamo, Chief Executive Officer of First Bank Group Dr Adesola Adeduntan, and Ireti Kingibe of the Nigerian National Assembly were among those who spoke at the event.
