Tuesday, January 17, 2023
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BusinessEthiopia eligible for Afrexim bank’s USD four billion credit

Ethiopia eligible for Afrexim bank’s USD four billion credit

Central bank says it is yet decided to receive the credit

Ethiopia is among the beneficiaries of the USD four billion Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA), launched last week by African Export-Import Bank (Afreximbank).

With an aim to manage the impacts of the Ukraine crisis on African economies, the African Export-Import Bank (Afreximbank) launched the credit program dubbed “Crisis Adjustment Trade Financing Program for Africa (UKAFPA).”

The Ukraine-Russia war has brought with it huge impacts on African economies and businesses, as countries are reliant on imports from the two countries. Ukraine and Russia contribute more than 30 percent of Wheat to the world, which will have a huge impact on African countries, including Ethiopia.

Ethiopia is also highly dependent on the import of crude edible oil from Ukraine. Local refineries, which import 100 percent of the raw materials, are suffering as a result of the crisis.

To mitigate its impacts, the board of directors of Afreximbank approved a credit program on March 31, 2022 to help countries meet immediate import price increases.

The bank expressed its interest to work with partner banks and institutions to urgently meet the need of African countries in terms of ensuring static and dynamic food security, adequate fuel supplies and averting fertilizer and agricultural input shortages.

The new program is a response to an urgent call for emergency intervention by member states of the Bank.

Ethiopia is eligible for the program as the National Bank of Ethiopia (NBE) and Afrexim bank signed a Memorandum of Understanding (MoU) to collaborate to promote trade and investment in February 2022.

Benedict Oramah (Prof.), president and chairman of the board of directors at Afreximbank said “I am delighted that our Board has approved the introduction of the UKAFPA, once again demonstrating their responsiveness to the needs of African member states and their citizens.”

Speaking to The Reporter, Fikadu Digafie, Vice governor and chief economist at the NBE, said there are no discussions held yet to decide on the interest to receive the credit.

“I have heard that Afrexim bank has approved the credit program but we haven’t taken any discussion on it,” Fikadu said.

The shortage of forex and the lack of raw materials are causing importers and manufacturers from Ethiopia feel the pinch with some companies closed as a result. The local price of edible oil also saw a significant price increase since the Ukraine Russia war broke out.

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