The African Export-Import Bank (Afreximbank) has announced the launch of a significant financial initiative aimed at bolstering trade in refined petroleum products within Africa. The bank has introduced a US $3 billion Revolving Intra-African Oil Trade Financing Program designed to finance the purchase of refined petroleum by buyers across the African continent and the Caribbean.
The program directly addresses Africa's substantial reliance on imported refined petroleum products, a dependency that currently results in an estimated annual expenditure of $30 billion on imports due to insufficient domestic refining capabilities.
Structured as a revolving facility, the program is projected to facilitate between $10 billion and $14 billion in intra-African petroleum imports over time.
According to Afreximbank, the initiative seeks to capitalize on the increasing refining capacity that the bank has actively supported in establishing across Africa. Furthermore, the program is aligned with the core objectives of the African Continental Free Trade Area (AfCFTA) agreement, including facilitating trade among African nations, promoting industrial growth, and creating employment opportunities across the continent.
By deploying tailored trade finance and supply chain solutions, which consider specific needs such as tenure, price formats, and logistics, Afreximbank aims to support its strategic priorities of enhancing energy security, strengthening regional value chains, and fostering economic resilience within Africa and the Caribbean region.
The program will cover trade in key refined petroleum products. These include, but are not limited to, Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Heavy Fuel Oil (HFO), Jet Fuel, and Kerosene. Eligible exporters under the program are refineries currently operating within Africa.
Afreximbank is recognized as the leading pan-African multilateral financial institution dedicated to financing and promoting trade both within and outside the African continent. The bank was established in October 1993 through the collaboration of African governments, African private and institutional investors, and non-African investors.