The program is a credit facility that the Bank has developed to manage the impacts of the Ukraine crisis on African economies and businesses.
The Russia-Ukraine crisis which escalated on 24 February 2022 has had a significant effect on the global economy.
The two European nations provide crude oil and gas, raw materials, and grains, and the outbreak of conflict has wider repercussions on a global scale, including adversely affecting African economies, especially those that rely heavily on grain, fertilizer, and fuel imports.
“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,” said Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank.
The UKAFPA program will finance import re-order cost adjustment to help countries to meet immediate import price increases pending domestic demand adjustments.
It entails, oil and metals buy-back financing to refinance over-collateralized loans in the context of the current high oil and metal prices, releasing more cash flow for use in meeting other urgent needs.
In addition, commodity export revenue stabilization will help countries and companies to structure and enter derivative contracts at today’s high commodity prices and stabilize future export earnings.
The program also includes tourism revenue deficit financing to be extended to Central Banks of tourism-dependent economies to cover foreign exchange revenue shortfalls.
Another objective is for the national export revenue acceleration facility to be used to accelerate the completion of impactful export-oriented projects by expediting access to foreign currency for use in importing critical equipment, technology, and expertise, for project completion.
Since its establishment, Afreximbank has built a track record and earned a reputation for introducing and implementing various emergency intervention programs.
Previously, in 2015, the Bank introduced its Countercyclical Trade Liquidity Facility (COTRALF) which provided a platform for the disbursement of over US$10 billion to African commercial and central banks.
The facility’s aim was to avert large-scale trade debt payment defaults at the height of the commodity crisis.
Afreximbank looks forward to working 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.