South Africa this week became the 54th member of the African Export-Import Bank (Afreximbank), unlocking access to a new $8bn country programme to boost trade and industrialisation.
The move gives Afreximbank full continental coverage for the first time and entitles South Africa to a seat on the board.
The $8bn financial support package comes at a good time for South Africa, which is currently battling trade headwinds, particularly with the US, one of its top trade partners. It also offers a new funding stream close to home at a time of fragmented global co-operation.
Ramaphosa’s high hopes
The signing of the instrument of accession to Afreximbank’s establishment agreement took place in Johannesburg, and was attended by President Cyril Ramaphosa and his trade minister Parks Tau, as well as Afreximbank president and chairman George Elombi.
“Today we mark a major, major milestone in our quest to realise what I would call the economic integration of our continent,” said Ramaphosa.
“South Africa’s accession to Afreximbank affirms our commitment to African industrial development and to deepening trade, investment and development across our continent.”
But, he said, membership alone is not the objective.
“What matters is how this partnership is translated into practical instruments that expand productive capacity, diversification of our exports and integrate more South Africans into the regional and global value chains.”
Elombi said the move could not have come at a better time for South Africa “which is facing extraordinary challenges in the world.”
“South Africa’s membership of the Bank, while providing Afreximbank a full continental coverage, brings the country into the heart of Afreximbank’s vision and its aspirations to promote the change so much desired in the structure of Africa’s trade.”
Trade and industry boosted
The $8bn country programme will support a range of strategic projects across the trade and industrial cluster. Priority areas include mineral processing, the expansion of automotive manufacturing and the development and expansion of industrial parks and special economic zones.
“We also plan to invest in the development of critical infrastructure, and this should include what we consider extremely important for South Africa and for many countries on our continent – energy generation and transmission,” said Elombi.
The partnership also aims to improve regional value chains and deepen South Africa’s integration with other markets in Africa as the country seeks new markets to offset trade volatility with traditional partners.
South Africa’s government-owned trade risk mitigation agency, the Export Credit Insurance Corporation (ECIC), is to be transformed into a fully fledged export-import bank with the capacity to support industrial development and economic diversification, a process that has already begun.
The move also strengthens Afreximbank’s role in implementing the African Continental Free Trade Area (AfCFTA), particularly as South Africa is the highest regional contributor to intra-African trade, accounting for 19.1% of the continent’s total trade in 2024.
Elombi said Afreximbank will work with development institutions such as the Industrial Development Corporation (IDC) and the Development Bank of South Africa (DBSA), and one of Africa’s biggest pension funds, the Public Investment Corporation (PIC). It will also continue to engage with commercial banks including Rand Merchant Bank and Standard Bank to drive a private sector-led transformation of South Africa and other economies in Africa.
Significant funding will also be directed into a transformation fund to deepen inclusive economic participation by black businesses in the country.
Afreximbank’s prior support to South Africa has not been tied to its membership of the Bank and there is already a pipeline of projects valued at more than $6bn in sectors including healthcare, financial services, manufacturing, energy, industry and mining.
Last year, Afreximbank and South Africa signed a $20m joint project preparation facility framework agreement to unlock up to $750m of quality, bankable projects across critical sectors.