The Role of African Export–Import Bank in Trade Financing

This chapter examines the role of African Export–Import Bank (Afreximbank) in promoting international trade through trade finance. It covers the challenges of trade financing in Africa, the origin and mandate of the Afreximbank, its ownership and membership, its funding and operations. It also discusses the contributions of the bank to trade financing in Africa. Notwithstanding the gains associated with trade, Africa continues to perform abysmally on this front. Among the myriads of challenges, trade finance is identified as a key constraint. Since African Export–Import Bank was established as a trade finance bank, the chapter shows how its unique set-up, including shareholding and funding structure, has supported its operations in contributing to filling the continent’s perennial trade finance gap. It calls for a holistic review of the regulatory regime across the continent, including introduction of tailor-made AML/KYC structures, establishment of well-functioning credit referencing bureaus, and incentivizing the bank to move into trade finance with a view to capacitating financial institutions and banks to expand their trade finance operations.