The African Export-Import Bank (Afreximbank) said it has voted an initial $100 million for full operationalization of the newly-created Fund for Export Development in Africa (FEDA).
The fund is to Increase efforts to boost import, export and trade related businesses across the African continent.
FEDA is a wholly-owned development-oriented subsidiary of Afreximbank 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. It will invest across all market segments but will have its greatest focus on small and medium-sized enterprises.
At a pre-incorporation meeting of the Board of Directors of FEDA in Cairo during the weekend, Afreximbank President, Prof Benedict Oramah said the long-term objective of the fund was 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.
Oramah, who doubles as Chairman of the Board of Directors of FEDA, added that the $100 million fund would expand Afreximbank’s offerings to include vital equity investments that would boost intra-African trade.
In his remarks at the meeting, Dr. Philip Kamau, Chief Executive Officer (CEO) of FEDA, 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”, Kamau added.
He further announced that FEDA would start investment activities in 2019, with a target to invest $100 million during the year. It was also targeting to raise $450 million in FDI during the period.
In addition to Prof. Oramah and Dr. Kamau, the other members of the Board of Directors are: Jean-Louis Ekra, former President of Afreximbank; Vishwanathan Shanker, Partner and CEO of the private equity fund Gateway Partners and former Board Member and CEO for Europe, Middle East, Africa and America at Standard Chartered Bank; Dr. Sidi Ould Tah, Director- General, Arab Bank for Economic Development in Africa; and Dr. Deji Ali, Non-Executive Director, Asset and Resource Management Company Ltd., Nigeria, which was named the Best Fund Manager in Nigeria in 2018.
FEDA will be headquartered in Mauritius.
