KEY POINTS
• Afreximbank and the Africa Trading and Distribution Company have signed a $500 million Global Credit Facility to support trade and commodity distribution across African and international markets.
• The financing will cover commodity purchases, aggregation, logistics, transportation, warehousing and distribution.
• The facility is expected to strengthen trade corridors, expand market access and support greater processing and movement of African goods.
MAIN STORY
The African Export Import Bank, Afreximbank, has signed a $500 million Global Credit Facility with the Africa Trading and Distribution Company, ATDC, to strengthen commodity trade and distribution across African and global markets.
The facility will provide ATDC with trade financing for eligible transactions involving the purchase and aggregation of African goods, as well as the logistics required to move them through different stages of the supply chain.
According to a statement issued by Vincent Musumba, Communications and Events Manager, Afreximbank, in Abuja on Monday, the financing will cover transportation, warehousing and distribution costs alongside commodity purchases.
The arrangement is also expected to enable ATDC to develop repeatable trade corridors and establish more dependable sourcing and distribution networks across African markets.
Beyond individual transactions, the facility is expected to support commercially sustainable trade flows, increase the processing of African commodities and improve regional access to raw materials, inputs and value added products.
Mrs Kanayo Awani, Executive Vice President, Intra African Trade and Export Development, Afreximbank, said the agreement reflected the bank’s focus on strengthening the trade, logistics and distribution systems needed to support the African Continental Free Trade Area, AfCFTA.
Awani said improved distribution would help “Made in Africa” goods reach markets across the continent, while strengthening regional value chains and expanding opportunities for African producers.
She added that the financing would support manufactured exports and improve the ability of African products to compete in international markets.
According to her, stronger trade infrastructure and market access were important to expanding Africa’s export footprint and supporting economic transformation.
Mr Stewart Makura, Chief Executive Officer of ATDC, said effective links between producers, processors, manufacturers and markets were essential to unlocking Africa’s trade potential.
He said the facility would increase ATDC’s ability to aggregate supply, mobilise working capital and move goods more efficiently through regional value chains.
“Together with Afreximbank, we will support stronger supply chains, value addition, import substitution and intra African trade,” Makura said.
ATDC is a pan African platform established to expand African trade, support industrialisation through greater local value addition and promote economic integration.
The company currently has local operations in Egypt, Nigeria, Malawi and Zimbabwe, where it focuses on addressing gaps in trade and market intelligence, improving market access and supporting implementation of AfCFTA.
THE ISSUES
- Financing is a major part of moving commodities from producers to final markets, particularly where transactions require working capital across purchasing, storage, transportation and distribution. The facility is structured to cover several stages of this process rather than individual commodity purchases alone.
- The agreement also targets the infrastructure connecting African producers with regional markets. More dependable trade corridors and distribution networks could make it easier for businesses to source and move goods across borders.
- Greater local processing is another expected outcome of the facility. Supporting the movement of value added products, alongside raw materials and inputs, could strengthen regional value chains and create more opportunities for African manufacturers.
- The arrangement is linked to the wider objective of implementing AfCFTA by improving the systems required for goods produced in one African market to reach consumers and businesses in another.
WHAT’S BEING SAID
“Together with Afreximbank, we will support stronger supply chains, value addition, import substitution and intra African trade.” – Stewart Makura, ATDC
WHAT’S NEXT
The facility will support ATDC’s eligible trading and distribution transactions, including commodity aggregation, logistics, transportation, warehousing and distribution across its operating markets.
BOTTOM LINE
The $500 million facility gives ATDC additional financing to move African commodities and products through regional supply chains. The broader aim is to strengthen distribution, local value addition and intra African trade.
