As part of efforts aimed at addressing economic shocks arising from commodity price instability in Africa, the African Export-Import Bank (Afreximbank) has signed a $150 million framework agreement with the Development Bank of Belarus, to promote trade financing between Belarus and African countries.
The agreement was a continuation of the dialogue, which started in 2016 between the two banks, during the visit of the Chairman of Afreximbank, Benedict Oramah, to Belarus, where they agreed to embark on the collaboration.
Oramah, who did the signing on Wednesday, at the maiden edition of the Belarus-Africa Trade and Investment Forum, in Minsk, Belarus, said the signing of the framework agreement is the first step towards achieving the total potential of $800 million.
While assuring that the agreement will help step up mutual trade between Belarus and African countries, Oramah said if the country with limited natural resources and population of 10 million people could reach this level of industrialization, Africa has a chance to partner with them for the supply of investment goods, especially in the area of agriculture, mining and manufacturing.
“The document will be a so-called corridor for Belarusian goods to the African continent. In general, we are setting an ambitious task of increasing trade between Belarus and African countries to $3 billion by 2020.
“During last year’s visit to Belarus, Afreximbank and the Development Bank agreed to reserve certain limits of funds. These will be some $400 million from us and the same amount from Belarus. They are needed to boost mutual trade between our countries. This first $150 million will be mainly used to purchase Belarusian equipment for the developing African market.
The event, which was part of the Belarusian agro- industrial week (Belagro 2017), is aimed at promoting cooperation in the agricultural and industrial sectors.
In his presentation titled:Belarus-Africa-Untapped Opportunities: An African Perspective, Chief Economist, Afreximbank, Dr. Hippolyte Fofack, said to achieve the goal, the parties need to strive to ensure that the partnership is not driven by “opportunistic trade and beggar-thy-neighbor policy,” but must respond to a more ambition-strategic relevance.
“In other words, the development impact of such a partnership will be much greater if it supports the implementation of emerging African development strategy and integration of the region into the global economy.
“The commitment to transform Africa’s agriculture and move towards large-scale production and value addition could fundamentally change and sustain the dynamic of trade between Africa and Belarus-shifting it towards imports of capital goods and irrigation equipment,” he said.
Fofack noted that Potassic fertilizer is another industry where a more strategic partnership driven by relevance and development impact could be a game changer for both parties, adding that the need for fertilizer are expected to rise, especially in the light of rate of population growth in Africa.
“Africa has a large trade deficit as nearly 95 per cent of fertilizers consumption is being met by global imports. In 2016, Africa imported an estimated $54 billion worth of fertilizer, mainly from Russia, China, Saudi Arabia, Spain, Germany and Belarus. Agriculture is another area where potential for trade, investment and growth are significant”, he added.