Minister of Finance, Mrs. Kemi Adeosun (left); President of Dangote Group, Alhaji Aliko Dangote and President of African Development Bank (AFDB), Dr. Akinwunmi Adesina,
African Export-Import Bank (AFREXIMBANK) on Saturday facilitated a $1.4 billion syndicated loan to two Nigerian entities to promote industrialisation and development of small and medium enterprises (SMEs) in the country. The agreement for a $750 million loan was signed by the managing director/CEO, Bank of Industry (BOI), Olukayode Pitan, while President of Dangote Group, Aliko Dangote, signed the $650 million facility for Dangote Group. The BOI, facility solely arranged by AFREXIMBANK and fully subscribed to by a syndicate of international banks, is to support the development impact of BOI in promoting its activities with SMEs.
For Dangote Group, the $650 million loan was in favour of the ongoing 600,000 barrels per day capacity Dangote Refinery being built in Lagos. AFREXIMBANK President, Benedict Oramah, said the structure of the BOI facility is for three year term with a one-year moratorium period, and a repayment period in equal quarterly instalment after the moratorium period. The interest on the loan would be paid quarterly through the lifespan of the loan.
The Dangote loan is structured as a seven year term facility, inclusive of a five year moratorium, with interest to be paid quarterly on the outstanding principal throughout the moratorium period. The principal facility would be repaid over two years in four equal parts on a yearly instalment after the moratorium period. The refinery scheduled to commence operation next year is expected to refine Nigerian crude blends into petroleum products for domestic and export markets.
The signing of the two agreements was witnessed by President Muhammadu Buhari at the opening of the annual general meeting (AGM) of the Bank held in Abuja. The AGM came as a climax of a four–day schedule of meetings to mark the 25th anniversary celebrations of the Bank. In his speech to declare the AGM open, President Buhari described the Bank as the celebration of true Pan African success story.
He said the 25th anniversary of the Bank clearly demonstrates to the world that Africa can create and maintain a world class organization. “Since inception, AFREXIM Bank has grown to become a global powerhouse for the development, facilitation, promotion and financing of African trade. “Africa’s journey to prosperity can only be achieved by supporting inclusive and sustainable projects. We must therefore congratulate and continue to support AFREXIM Bank to deliver on this mandate,” he said. President Buhari said his administration adopted a policy of inclusive economic growth and was determined to attain this goal by reducing the country’s over reliance on crude oil.
So far, he said the country has invested aggressively in infrastructure to support the country’s growth potential in agriculture and solid minerals. He said the country has also empowered many Nigerian entrepreneurs in the entertainment and digital economies.
The President noted the unique and important role Nigeria has to play in Africa, pointing out that apart from its 200 million people, diversity of language, culture, natural endowments and aspirations, the country is a trading nation. “No nation can survive on its own. Trading is important and the terms of trade are important too. Therefore, there is a need to ensure our national interests as well as our regional and international obligations are balanced. He said he has directed relevant agencies to conduct intensive and extensive consultations across the nation on the Continental Free Trade Agreement (AfCFTA), which Nigeria is among the few countries yet to sign.
In his report on the activities of the Bank in 2017, Mr Oramah said AFREXIMBANK in collaboration with the African Union, has begun the push to tackle the challenges of access to trade information in Africa by launching an initiative to host intra Africa Trade Fairs to hold once every two years. The first of such trade fairs would be held in Cairo, Egypt in December. He described 2017 as a good year, as part of its goals is to be the agent of positive change in the life of Africa.
Despite the difficult operating environment, he said the Bank made good progress through good vision, innovation, prudent resource management and determination to deliver positive results to our shareholders. Apart from revenues growing by 25 per cent to $645million, he said net income rose by 34 per cent to a new record of $220 million.