The African Export-Import Bank (Afreximbank) and the Central Bank of Egypt (CBE) signed in Cairo signed Friday a $500-million facility to help Egyptian importers through a foreign currency crisis.
Egypt has been facing a dollar crisis since losing about half of its $36 billion international reserves in the wake of 2011 uprising that toppled president Hosni Mubarak, which was followed by a security vacuum that has scared away tourists and investors.
Under the terms of the agreement, Afreximbank will provide the Revolving Global Central Bank of Egypt-sponsored Countercyclical Trade Liquidity Facility to eligible Egyptian importers that are supporting the productive sector and who receive the approval of the Central Bank. The facility will focus on imports considered strategic to the Egyptian economy.
Speaking during the signing of the agreement at the Afreximbank Headquarters, Benedict Oramah, President of Afreximbank, said that the Bank planned to move quickly on the implementation of the facility in order to ensure the quick delivery of the expected benefits.
According to him, Afreximbank is determined to support the effort of the Egyptian authorities to address the foreign currency liquidity challenges confronting the country in order to reciprocate the strong support it has enjoyed from Egypt.
Tarek Amer, Governor of the CBE, commended Afreximbank for standing by Egypt and promised that the continental trade finance institution would be satisfied with the performance of the relationship it was getting into through the new facility.
The CBE was striving to improve and to bring discipline into the Egyptian market through the substantive policy measures it was implementing, he said, adding that those measures had started bringing results, as some exchange rate improvements had been observed and liquidity was coming back.
The objective of the CBE was to make sure that the economy was functioning, he said, noting that the business sector was doing well.
The new facility is part of a $3.5-billion financing programme, approved by the Afreximbank Board of Directors at its last meeting in Seychelles in December, aimed at enabling the Bank’s member countries adjust to current adverse economic shocks, especially commodity price and terrorism-induced ones.
It comes in addition to a $500-million Egypt-Africa Trade Promotion Programme initiated by Afreximbank to foster trade and economic cooperation between Egypt and the rest of the continent and a $1-billion Countercyclical Medium-Term Trade Liquidity Facility which the Bank announced in November that it was arranging for Egypt to support imports of essential goods towards.
