The African Export-Import Bank (Afreximbank) has signed a $3 billion country programme with the Government of Kenya to support viable trade and trade-related investments in Kenya in both the private and public sectors. The financing package will be implemented using several instruments, including loans, guarantee facilities, trade services, investment banking and advisory services.
This article will delve into the details of the agreement, including the programme’s objectives, the financial instruments to be used, and the areas of intervention of the country programme.
Objectives of the Country Programme
Afreximbank’s country programme for Kenya aims to support the country’s industrialisation and export-led development agenda. The bank aims to finance the development and operationalisation of Special Industrial Zones to strengthen Kenya’s export manufacturing. It will also support the Kenya National Trading Corporation (KNTC) to become a fully-fledged Export Trading Company (ETC). This move will facilitate the emergence of an integrated national value chain and foster the growth of SMEs through improved access to finance and national and regional markets.
Furthermore, Afreximbank will direct funds committed under the Country Programme towards the development of modern infrastructure and facilities and the upgrading of existing infrastructure. The bank will support a further deepening and expansion of the Kenyan banking industry by expanding its lines of credit and other product offerings to Kenyan banks to equip them with the muscle to support the local economy.
Financial Instruments to be Used
Afreximbank’s country programme for Kenya will utilise several instruments, including loans, guarantee facilities, trade services, investment banking and advisory services.
The loans and guarantee facilities provided by the bank will help Kenyan businesses gain access to financing, which will enable them to invest in trade-related activities. The bank’s trade services will facilitate trade between Kenya and the rest of Africa, which will help boost economic growth and job creation.
The investment banking and advisory services offered by Afreximbank will help Kenyan businesses access the skills and expertise needed to grow their businesses. This will help build a strong infrastructure base, catalyse agriculture and industrial growth, and create a well-diversified, integrated, and resilient national economy that benefits all segments of society.
Areas of Intervention of the Country Programme
Afreximbank’s country programme for Kenya will support several areas of intervention, including:
Industrialisation and Export-led Development
The bank aims to finance the development and operationalisation of Special Industrial Zones to strengthen Kenya’s export manufacturing. The programme will also support the Kenya National Trading Corporation (KNTC) to become a fully-fledged Export Trading Company (ETC), which will facilitate the emergence of an integrated national value chain and foster the growth of SMEs through improved access to finance and national and regional markets.
Infrastructure Development
Funds committed by Afreximbank under the Country Programme will be directed towards the development of modern infrastructure and facilities and to upgrading existing infrastructure. This will help to create jobs, reduce the cost of doing business and boost economic growth.
Banking Industry Development
Afreximbank will support a further deepening and expansion of the Kenyan banking industry by expanding its lines of credit and other product offerings to Kenyan banks to equip them with the muscle to support the local economy.
Post-COVID-19 Pandemic Economic Recovery
The bank will support Kenya’s post-COVID-19 pandemic economic recovery and its ability to cope with shortages and high commodity prices due to the impact of the ongoing Ukraine Crisis.
Creative Arts Sector
The country programme will support the creative arts sector through the Kenyan government’s youth empowerment programme.
Regional and Intra-African Trade
Afreximbank will support and stimulate regional and intra-African trade through capacity building of Kenyan enterprises to improve their ability to compete under the African Continental Free Trade Agreement (AfCFTA) framework. This will involve providing access to finance, trade facilitation, and trade information services to enable Kenyan businesses to take full advantage of the AfCFTA.
