The African Export-Import Bank (Afreximbank) and the Republic of Rwanda, in Cairo, recently signed key documents related to the establishment of the Fund for Export-Development in Africa (FEDA), a development-oriented subsidiary of Afreximbank.
The Establishment Agreement and Memorandum of Understanding were signed by Alfred Kalisa, Ambassador of the Republic of Rwanda in Egypt, and Afreximbank’s President, Prof.Benedict Oramah in the presence of 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.
FEDA has been established by Afreximbank to facilitate foreign direct 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.
Kalisa said: “The Government of Rwanda is happy to have signed these key agreements with Afreximbank. Rwanda is glad to host FEDA as we work together to achieve the dreams of the African Continental Free Trade Area (ACfTA) on the continent. We will work together to ensure that FEDA is successful in driving and achieving its mandate.’’
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.
On his part, Oramah said: “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 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.”
FEDA is tasked to provide capital to companies in the financial services, technology consumer and retail goods, tourism, manufacturing, transport, logistics and warehousing, trade enabling infrastructure e.g. industrial parks, agribusiness and education sectors in Afreximbank’s member states. FEDA will invest across all market segments but with greater focus on SMEs which has substantial funding shortages and represent about 90% of businesses in Africa. It will also invest in mature companies and start-up businesses where there is a gap in the marketplace and where investments have a high level of value additionality and development impact in Africa.