African businesses engaged in agriculture, manufacturing, financial sector, and tourism, among other sectors, could soon start to access finance from the African Export-Import Bank (Afreximbank) as the institution edges closer to operationalisation of its newly created export fund. The operationalisation of the Fund for Export Development in Africa (FEDA) moved into high gear on Sunday with the holding of the pre-incorporation meeting of the Board of Directors in Cairo, Egypt. FEDA, a wholly-owned development-oriented subsidiary of the Afreximbank, has been set up to implement the bank’s Equity Investment Programme by providing seed capital to companies in agri-business, manufacturing, consumer and retail, and financial services. The fund will also seek to support businesses within the technology space, travel and tourism, transport and logistics, and industrial parks. The bank says the fund will invest across all market segments but will have its greatest focus on small and medium-sized enterprises. “The long-term objective of FEDA is the provision of equity capital and related financial, non-financial and support services to operators in Africa’s tradable and support sectors, with emphasis on activities that support intra-African trade and value-added exports,” reads part of the statement from Afreximbank. The Fund, which has been set up with an initial $100-million commitment, will also seek to leverage on the role Afreximbank has played in mobilising trade finance into Africa to also mobilize foreign direct investment (FDI) into the continent. Addressing the pre-incorporation meeting, Benedict Oramah, Chairman of the Board of Directors of FEDA and President of Afreximbank, said that the fund would expand Afreximbank’s offerings to include vital equity investments that would boost intra-African trade. On the other hand, Philip Kamau, Chief Executive Officer (CEO) of FEDA, said that a feasibility study conducted for Afreximbank had identified a funding gap which was inhibiting intra-African trade. “FEDA had, therefore, been set up to provide equity and to leverage FDI to help close that gap,” he said. He announced that FEDA would start investment activities in 2019, with a target to invest $10 million during the year. It was also target to raise $450 million in FDI during the same period. In addition to Oramah and Kamau, the other members of the Board of Directors are; Jean-Louis Ekra, the former President of Afreximbank, Vishwanathan Shanker, the Partner and CEO of the private equity fund Gateway Partners and former Board Member and CEO of Standard Chartered Bank for Europe, Middle East, Africa and America. Others include Sidi Ould Tah, Director- General of Arab Bank for Economic Development in Africa and Deji Ali, Non-Executive Director for Asset and Resource Management Company Ltd. FEDA will be headquartered in Mauritius editorial@newtimes.co.rw
