Prime Minister Edouard Ngirente, on Wednesday, March 20, said the Fund for Export Development in Africa (FEDA) is poised as a key financing instrument to boost intra-African trade which currently remains low. He made the remarks at the official launch of FEDA’s permanent offices in Kigali, another step in establishing Rwanda as a financial hub on the continent. “This will not only empower businesses to thrive and create jobs but also to drive sustainable economic progress for our people,” Ngirente remarked during the launch. “I also note with satisfaction FEDA’s commitment to support African entrepreneurs and companies in developing the vast potential of export markets on the continent,” he added. The Premier called upon the fund to invest in upskilling Rwandans in the financial services sector, and contribute to positioning Rwanda as a financial hub in Africa. ALSO READ: Pan African Export fund starts operations in Rwanda As the impact investment subsidiary of Afreximbank, FEDA seeks to fill the $110 billion gap in equity financing on the continent. The Fund will act as a bridge to bring investment partners and financial institutions together. Currently, intra-African trade exports account for about 17 per cent of Africa’s total exports. This reality, Ngirente said, indicates that goods and services flow more rapidly to other continents, leaving untapped opportunities within Africa’s backyards. With obstacles including low trade complementarity due to economic diversification and limited productive capacities, lack of adequate infrastructure, he commended the fund’s efforts in changing this narrative by providing vital financial and technical assistance on activities that aim to promote and facilitate intra-Africa trade. ALSO READ: AfCFTA $10 billion Adjustment fund to roll out mid-2024 Benedict Oramah, President and Chairman of the Boards of Afreximbank and FEDA, said that the Fund represents an additional vehicle that will help catalyze and accelerate shared economic transformation and continental integration agenda. “With a focus on providing long-term, patient capital targeting all segments, from SMEs to corporates, and cutting across dynamic sectors of value-addition, services, and technology, FEDA is poised to drive Africa’s development,” he said. FEDA has been raising needed funding since it was launched. Funds Under Management now amount to about $800 million some of which the Fund is using to create and mobilise additional funds, according Afreximbank. FEDA is also a co-promoter of a $500 million Africa Credit Opportunity Fund (ACOF) and is currently creating a $100 million Venture Capital Fund to focus on start-ups and SMEs with seed funding from Afreximbank. According to Marlene Ngoyi, FEDA’s Chief Executive Officer, the Fund has already deployed $300 million in strategic investment across Africa and seeks to further accelerate fund deployment in the near future. “At FEDA, we offer equity-like instruments tailored to finance businesses and all stages of development from startup to mature enterprises as well as make investments in critical sectors such as telecommunication, energy, agro, processing, and refactoring industrial parks,” she said. However, Ngoyi highlighted that the fund’s vision extends beyond traditional sectors, to nurturing Africa’s creative industry through establishing funds to harness Africa's rich cultural heritage and creative talents. FEDA became the fund manager of the $1 billion African Continental Free Trade Area (AfCFTA) Adjustment Fund in 2023. Francis Gatare, CEO of Rwanda Development Board, reiterated that FEDA’s objectives are aligned with Rwanda’s ambition to address constraints that hinder intra-African trade and exports growth. “FEDA is poised to play a very active role in bringing about African economic integration. We have already witnessed its impact here in Rwanda with investments in Arise IIP which is building the Bugesera Special Economic Zone,” he said. He added: “We want to continue to welcome these investments in our country and by extension across the continent.”
