The African Export-Import Bank (Afreximbank), the pan-African multilateral EXIM bank, partners with the International Islamic Trade Finance Corporation (ITFC), the Trade Finance Arm of the Islamic Development Bank (IsDB) Group; and the Arab Bank For Economic Development in Africa (BADEA), to launch a $1.5 billion Collaborative COVID-19 Pandemic Response Facility (COPREFA) to support African economies with rapid financial assistance to reduce the impact of COVID-19.
COPREFA will be accessed by eligible central banks, commercial banks and businesses to finance the import of medical supplies, as well as agricultural equipment and fertilizers essential for addressing the pressing food production deficit.
COPREFA is also designed to support African economies to overcome a myriad of challenges, including commodity price shocks, a significant drop in tourism, and disruption to supply chains and export manufacturing. It will also addresse the sudden declines in financial flows, including a drop off in trade and project finance, migrant remittances, portfolio investment and Foreign Direct Investments.
A key attribute of the COPREFA facility is the speed at which financial assistance can be provided through all partners involved. The impact of the COVID-19 pandemic has proven to be fast-paced, requiring support that can be deployed quickly and flexibly to prevent sharp declines in national economies.
Standard eligibility criteria and credit appraisal process have been developed by COPREFA partners in order to facilitate implementation of the facility. Support will be available through direct funding, lines of credit, confirmation and refinancing of documentary credits; guarantees, cross-currency swaps and other similar instruments.
The co-financed facility, led by Afreximbank leverages strategic partnerships with other Multilateral Financial Institutions and other international financial institutions in co-financing, risk sharing of transactions and promoting integrated trade solutions, to support African economies on navigating the impact of COVID-19.
Afreximbank has a strong track record of supporting African economies during financial crises. In 2015, the Bank disbursed more than US$10 billion through a Counter-Cyclical Trade Liquidity Facility (COTRALF) to help member countries manage the adverse economic fallout of commodity price shocks.
In March 2020, a financial package called the Pandemic Trade Impact Mitigation Facility (PATIMFA) was launched solely by Afreximbank to support economies through the pandemic – a facility of which over $5 billion has been disbursed, will be implemented alongside COPREFA.
Forty four years had elapsed, since the establishment of BADEA as international development finance institutions (DFIs) with objective of supporting economic, financial and technical cooperation between Arab and African countries through a wide spectra of financing instruments that have been enhanced and diversified to meet the economic needs of beneficiary countries.
Prof. Benedict Oramah, President of Afreximbank, said:
Eng. Hani Salem Sonbol, CEO of ITFC, also noted;