A special funding arrangement to facilitate foreign direct investment flows into Africa has been established by the African Export-Import Bank, Afreximbank.
Specifically, the bank and the Republic of Rwanda have sealed an agreement to establish the Fund for Export-Development in Africa, FEDA, – development-oriented subsidiary of Afreximbank. The deal is expected to attract investment flows into Africa’s trade and export sectors and to fill the equity funding gap that amounts to $110 billion per annum in exports related sectors.
The Establishment Agreement and Memorandum of Understanding were endorsed by Ambassador of the Republic of Rwanda in Egypt, Alfred Kalisa and Afreximbank’s President, Professor Benedict Oramah and witnessed by Mahamadou Labarang, Dean of the African Ambassadors in Cairo and FEDA Chief Executive Officer, Dr. Philip Kamau. The Establishment Agreement creates FEDA while the Headquarters Agreement provides that the Republic of Rwanda will host the headquarters office.
Ambassador Kalisa is confident that the agreement will provide a fillip to attaining “the dreams of the African Continental Free Trade Area on the continent. We will work together to ensure that FEDA is successful in driving and achieving its mandate.’’
“FEDA is a new vehicle created to deal with the perennial problem of capital constraints to private sector development and industrialisation in Africa. Afreximbank has already committed over 350 million US dollars to the Fund, including commitments for operation of a Credit Fund, investments in the Bank’s strategic initiatives and those to be deployed under limited partnership frameworks.
“I would like to thank H.E. Paul Kagame, President of the Republic of Rwanda and his Government for embracing the strategic essence of this institution to both Rwanda and Africa. To have agreed to host FEDA without any equivocation is a clear and bold statement of visionary leadership and recognition of the economic value of Pan-African institutions,” said Professor Oramah.
FEDA aims to provide equity financing to companies operating in key industries and sectors to significantly increase the likelihood of success in delivering on Afreximbank’s development priorities and meeting the Bank’s strategic goals under the main pillars of the intra-African Trade Strategy and the Industrialisation and Export Development Strategy.