African Export-Import Bank (Afreximbank) has embarked on a $6.5 billion General Capital Increase (GCI) to expand its capacity to deliver on its core mandate and diversify its range of services.

According to a statement from the bank on Thursday, the GCI will enhance the bank’s capacity to support the procurement of COVID-19 vaccines for the continent.

It would also bolster post-pandemic recovery efforts for the economies of African nations and drive the implementation of the African Continental Free Trade Agreement (AfCFTA), among others.

Prof. Benedict Oramah, President of Afreximbank expressed gratitude to the bank’s shareholders for their support.

“The General Capital Increase will enable Afreximbank to significantly increase its efforts to promote intra-African trade, drive export development and accelerate the continent’s recovery from the economic difficulties caused by COVID-19.

“This is a historic moment for the Bank; it presents a great opportunity to deepen the Bank’s capacity to deliver transformative growth across this continent.”

Recognising Afreximbank’s mandate and pivotal role on the continent, the African Union (AU) Ministers of Finance, the AU Executive Council, and the 34th ordinary session of the AU Assembly of Heads of State endorsed the additional capitalisation of Afreximbank.

African member states are expected to contribute up to $1.5 billion as paid-in capital ($3.9 billion in callable capital) to meet their total contribution under the GCI.

The bank’s Board of Directors opened the GCI to other shareholders of the bank to contribute up to 1.1 billion dollars to enable them to participate pro-rata to their shareholding in Afreximbank.

This brought the total size of the GCI to $6.5 billion (of which $2.6 billion would be paid-in).

The GCI was approved by Afreximbank Shareholders during their 28th annual meeting in July 2021.

Afreximbank expects to double its annual lending capacity and balance sheet size during the next five years, thereby further contributing to the reduction of the existing annual trade finance gap in Africa.