The European Investment Bank (EIB), an arm of the European Union, and multilateral trade finance institution, the African Export-Import Bank (Afreximbank), are directing €300-million of financing to support the resilience and recovery of African nations from the Covid-19 pandemic.
The funds will ensure businesses across the continent have the working capital to sustain jobs and maintain vital imports.
At least a quarter of the capital has also been earmarked for climate change mitigation and adaptation, helping Africa increase the opportunities of a green recovery.
The support package is the first accelerated Covid-19 response for the entire sub-Saharan region under the EIB’s Team Europe initiative – a €6.7-billion package to help the most vulnerable and exposed countries respond to the immediate health crisis, mitigate social and economic impacts and build resilience for the future.
The support for sub-Saharan Africa delivered with Afreximbank is structured in two parts, with the package redeploying €200-million of funds previously allocated to trade-related investments, and directing them specifically to sectors most impacted by the pandemic.
In recognising the pressing need for support, Afreximbank and the EIB are also injecting a further €100-million to the package. This combination of existing and new funds, in addition to Afreximbank’s position on the ground, means support can be activated immediately – a degree of agility that would not have been possible under a new agreement.
Further, Afreximbank says its deep knowledge and broad presence across African markets will ensure capital reaches businesses and communities in all areas of the continent.
A portion of the Afreximbank and EIB support package will be targeted at enabling cross-border trade in medical supplies and equipment essential for slowing the spread of Covid-19.
In addition, the support package will provide financing to long-term investments in trade expansion, helping both the availability of goods and growth in economic prosperity.
The package will support participating member States of Afreximbank, 46 of which are part of the Contonou Agreement in sub-Saharan Africa.
Two key focus areas in Africa are on women in business and the green revolution. As a result, a portion of the package will target businesses owned or managed by women.
In addition, at least 25% of the funds allocated under the partnership will be earmarked for green projects, such as renewable power, energy efficiency and climate change adaptation measures.
Afreximbank is currently appraising renewable energy projects in excess of about €100-million.
In addition, part of the funds will support the repurposing of factories to manufacture personal protective equipment and other Covid-19 materials, through the African Medical Supplies Platform – a digital platform promoted by Africa Centres for Disease Control and Prevention, Afreximbank, and the United Nation Economic Commission for Africa and African Union Envoy Strive Masiyiwa.
Afreximbank president Professor Benedict Oramah says that, as continental neighbours, Europe and Africa must stand together against the global pandemic. “The funding announced today is welcome not only because it answers an urgent need, but because it is deployed with urgency.”