Estimated reading time: 4 minutes
Multilateral development bank, African Export-Import Bank (Afreximbank), announced a US$3 billion Country Programme for Kenya, aimed at supporting infrastructure, agriculture, housing and MSMEs.
The programme was announced during a meeting between Kenya’s President, His Excellency Dr William Ruto, and Professor Benedict Okey Oramah, President and Chairman of the Board of Directors of Afreximbank.
During the meeting held at State House Nairobi, Prof. Oramah said the Bank was excited by the opportunity to roll out this package of financing as part of its efforts to support Kenya as it navigates the current unprecedented global economic challenges.
“We had a very good meeting with His Excellency President Ruto and agreed that we needed to reset the relationship between Afreximbank and Kenya,’ said Prof. Oramah. “President Ruto’s vision and sense of urgency was infectious and we couldn’t help but give him the support he deserves.”
Speaking of the meeting, Dr Ruto said the engagement was fruitful and would enable Kenya to interact more with one of Africa’s leading development finance institutions.
“This will allow us to expand our engagement with Afreximbank on several investment areas such as infrastructure, agriculture, commercial irrigation, housing, the creative industry and the MSME ecosystem,” noted Dr Ruto.
A technical team drawn from the Kenyan government and Afeximbank is expected to begin working on the support structure.
A significant part of the support will involve the establishment of a Kenya Climate Change Adaptation Facility. Underpinning this, Afreximbank will put in place US$ 800 million in financing towards building 100 dams to double irrigated areas in Kenya, while paying particular attention to regions experiencing water shortages as a result of the impact of climate change.
“We are proud to be using Kenya to launch the Afreximbank Climate Change Adaptation Facility under which we plan to disburse over US$5 billion in the 5 years to 2026 under Afreximbank’s 6th Strategic Plan,” Oramah said.
Under this scheme, Kenya plans to double the land area under irrigation from the current 670,000 acres to 1.4 million acres in the next three years.
This is aimed at improving the country’s food production, while reducing its overreliance on rain-fed agriculture.
“We stand ready to kick-start this exciting programme with the Government of Kenya and promote climate-smart agriculture in the country. Our Project Preparation and technical teams will work with the Kenya government team on this project to develop a robust model and structure that will attract investors,’ added Prof. Oramah.
The Country Program will also encompass support for the development and operation of industrial parks in Kenya. This is geared particularly to help in enhancing Kenya’s manufacturing and value-addition sectors. As a result, it will provide a major boost to intra-African trade under the Africa Continental Free Trade Area (AfCFTA).
Additionally, Afreximbank has also extended the ATEX pan-African pooled procurement platform for commodities to Kenya. This is critical in supporting the East African nation’s post-COVID-19 pandemic economic stresses and the impact of the ongoing Ukraine crisis on global supply chains that have led to shortages and high prices of essential commodities.
“Afreximbank will put in place a facility that enables the timely and sustainable supply of basic commodities such as fuel, fertilizer, grains and edible oils. We also want to reorientate supply chains towards intra-African procurement,” noted Prof. Oramah. “For example, Africa produces more fertiliser than it uses and some of this gets exported, while some African countries import the same,” he added.
The Bank will also support youth empowerment through its CANEX platform for the creative sector. This will support young talented Africans who are traditionally shunned by the financial services sector due to the traditional lending models. The facility will complement the government’s efforts to develop the film and performance arts, music, fashion and textile as well as art and crafts. This will see many young Africans benefit from their creativity and intellectual capital.
During the meeting, Prof. Oramah and Dr Ruto also discussed the Pan-African Payment and Settlement System (PAPSS). They agreed that PAPSS was important in aiding regional trade within the continent, through the use of local currencies. The move, the two underscored, would be key in developing intra-African trade, particularly among MSMEs, as intended under the AfCFTA charter.