Regional finance institution, the African Export-Import Bank (Afreximbank) is opening its fifth continental branch in Uganda following an agreement between the bank and the government of the eastern African nation.
Across the continent, the bank has branches in Cairo, Abuja, Abidjan, and Harare. The initial plan was to open an East African branch in Kenya but Nairobi’s reluctance to grant the bank diplomatic status forced the agency to move its $30 million regional headquarters to Uganda.
The President of Afreximbank, Prof. Benedict Oramah in 2018 revealed that the pan-African lender was relocating to the Ugandan capital, Kampala after Nairobi kept it waiting for more than three years for the necessary approvals.
Oramah added that the lender was set to sign a deal with Uganda to establish its regional branch in Kampala, with Nairobi missing out on the benefits that come with hosting such prominent international organizations.
The deal with Uganda, which was signed by Prof. Oramah and President Yoweri Museveni, is considered to be mutually beneficial to both parties, as well as for the whole region.
For Uganda, hosting the bank’s branch could help expand its exports of value-added goods and services, facilitate investments in critical infrastructure as well as enhance the growth of local SMEs by offering credit facilities and other risk mitigation instruments.
Under the agreement, Afreximbank and its senior officials get guaranteed diplomatic immunity in their dealings in Uganda. While Prof. Oramah noted that the establishment of an East Africa branch would deepen the bank’s engagement with the region’s institutions.
From the Kampala branch, set to be open for business at the end of October, the bank will be serving 11 countries across the eastern region including Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, South Sudan, Sudan, Tanzania, and Uganda.
In the region, the bank has an investment portfolio that includes a $2 billion loan to Kenya Airways, an undisclosed amount loaned to Tanzania for the construction of the standard gauge railway, and $155 million to Rwanda for the construction of the Kigali Convention Centre and the Radisson Blu Hotel.
Afreximbank is also looking to expand both its portfolio and relations with the region by recruiting more institutions. The bank is in talks to get Uganda’s National Social Security Fund (NSSF) on board as a shareholder.
The bank has different classes of shareholders that include African ministries of finance and central banks. And according to its Chief Operating Officer for the East African region, Kudakwashe Matereke, the plan is to have NSSF join others in the region such as Rwanda’s Social Security Board, to become one of the lender’s institutional investors.
Afreximbank was created in 1993 under the auspices of the African Development Bank (AfDB). The Bank’s shareholders comprise public and private entities divided into four classes including African governments, central banks, regional and sub-regional institutions, private investors and financial institutions, as well as non-African financial institutions, export credit agencies, and private investors.