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The African Export-Import Bank (Afreximbank), through its development-oriented subsidiary, Fund for Export Development in Africa (FEDA), has committed $100 million to the growth of Small and Medium-sized Enterprises (SMEs) across Africa.
Addressing the pre-incorporation meeting, held recently in Cairo, Egypt, Chairman of the Board of Directors of FEDA and President of Afreximbank, Benedict Oramah, revealed that “the fund would expand Afreximbank’s offerings to include vital equity investments that would boost intra-African trade.”
The operations of FEDA has moved into high gear with the holding of the pre-incorporation meeting of the Board of Directors in Cairo. FEDA has been set up to implement the bank’s Equity Investment Programme by providing seed capital to companies in Afreximbank’s key focus sectors, including agri-business; manufacturing; consumer and retail; financial services; technology; travel and tourism; transport and logistics; and industrial parks. FEDA will invest across all market segments but will have its greatest focus on small and medium-sized enterprises.
Chief Executive Officer (CEO) of FEDA, Philip Kamau, 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 announced that FEDA would start investment activities in 2019, with a target to invest $10 million during the year. It was also targeting to raise $450 million in FDI during the period.
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.
The $100million fund will also seek to leverage on the role Afreximbank has played in mobilising trade finance into Africa to also mobilise foreign direct investment (FDI) into the continent.
