Nigeria’s Finance Minister, Kemi Adeosun has been elected Chairman of the board of Africa Export Import bank (Afreximbank).
Adeosun was elected chairman on Saturday in Abuja at the bank’s Annual General Meeting declared open by President Muhammadu Buhari. She will chair the bank for one year.
Speaking at the opening ceremony of the AGM, President Muhammadu Buhari noted that Africa’s journey to prosperity “can only be achieved by supporting inclusive and sustainable projects. We must therefore continue to support Afreximbank to deliver on this mandate.”
President Buhari as expected spoke on the much anticipated Nigeria’s signing of the Africa Continental Free Trade Agreement (AfCFTA) stating that, his administration will work towards a fair trade agreement with the rest of the continent.
According to President Buhari, “significant progress has been made in these consultations. The team has met key stakeholders across our six geo-political zones. The responses have been diverse as would be expected. However, one clear message has emerged which is that any trade agreement must be both “free’ and ‘fair’. This fairness is achievable and we will work towards it.”
He noted that “no nation can survive on its own. Trading is important and the terms of trade are important. Therefore, there is a need to ensure our national interests as well as our regional and international obligations are balanced.”
His administration he added “has adopted a policy of inclusive economic growth and is determined to attain this by reducing our over reliance on crude oil. To date, we have invested aggressively in infrastructure to support our growth potential in agriculture and solid minerals. We are alsoempowering many Nigerian entrepreneurs in the entertainment and digital economies to mention a few.”
Government he said will stand to enable those who can help themselves “but is equally committed to supporting those who can’t.” A decision that has forced the government to introduced “our Social Investment Program which is changing lives through, school feeding, conditional cash transfers and youth employment, among others.”
Buhari informed the international gathering that “Nigeria has a very unique and important role to play. We are a vast nation of nearly 200 million people, with diversity of language, culture, natural endowments and aspirations. However what we all have in common is that at all levels, Nigeria is a trading nation.”
The highlight of the day’s activities was the combined signing of the Memorandum of Understanding (MoU) between Afreximbank and Nigeria’s Bank of Industry (BoI) and Dangote group to finance his refinery valued at $750 million and $650 million respectively.
Addressing the gathering, Afreximbank President, Dr. Benedict Oramah disclosed that Afreximbank has created a specialized institution, a fully owned subsidiary called the ‘’Fund for Africa’s Export Development” (FUNFED)”.
The objective of the fund he said “is to contribute towards expanding the share of manufactured and service exports in Africa’s total exports by attracting appropriate FDI flows into those dynamic sectors.”
Afreximbank’s initial investment commitment in the FUND amounts to US$100 million which is expected to attract additional investments to bring funds under management to US$1 billion in the near term.
Speaking on the bank’s financial performance for the year end, 2017, Oramah stated that “revenues grew strongly by 25 percent to US$645 million, driven by healthy interest income on average assets of about US$14 billion, of which about 70% were loans and advances.”
Net income as a result rose by 34 percent to reach a new record high of US$220 million.
Oramah noted that “despite the fact that loans dropped by 18% at year- end following the repayment of about 3.2 billion in Countercyclical Trade Liquidity Facility loans, that fell due in December, Non-performing loans ratio only rose marginally from 2.4 percent to 2.5 percent.”
The strong capital injection and internal capital generation ensured that the Bank ended the financial year with Shareholders’ Funds rising by 31% to US$2.1 billion, bringing combined shareholders’ fund and contingent capital to close to US$3 billion, up by 33% from 2016; Capital Adequacy ratio was at 26%, compared to 23% in 2017.
Liquidity he told shareholders “was very strong with cash and due from banks reaching US$3.2 billion, up 153% from US$1.3 billion in 2016. Liquidity cover ratio was very strong at 185%, above our target of 105%. Access to debt markets was quite diversified with African sources of liquidity maintaining their importance in 2017 in line with our strategic goals.”
Based on the very good performance, the Board of Afreximbank recommended a dividend payment amounting to a dividend yield of 5% fully paid shares.