Funds set up by the African Export-Import Bank (Afrexim) have more than $450 million to invest in financial services, creative industries, oil refineries and healthcare, officials said on Wednesday. The Fund For Export Development in Africa (FEDA) has raised $770 million for four funds, Marlene Ngoyi, FEDA’s CEO, said in an interview at the opening of its Kigali office. It has already invested about $300 million, Afrexim’s President Benedict Oramah also told Reuters. FEDA, unveiled by multilateral trade finance bank Afrexim in 2016 and which makes equity, debt and credit investments, as well as “greenfield” investments in new businesses, had raised $670 million by 2022. It is targeting raising $1.3 billion in total. Afrexim in a statement said “The African Export – Import Bank has officially unveiled its Fund for Export Development in Africa (FEDA) office in Kigali, Rwanda. FEDA was established to tackle Africa’s US$110 billion financing gap for intra-African trade, value-added export development, and industrialisation value chains, with Rwanda being the first among fifteen African nations to ratify its establishment agreement.
“The event was graced by the Right Honourable Dr. Edouard Ngirente, the Prime Minister of the Republic of Rwanda who was accompanied by the President and Chairman of the Board of Directors of Afreximbank, Prof. Benedict Oramah, Executive Vice Presidents of Afreximbank, members of the Board of Directors of FEDA and Marlene Ngoyi, Chief Executive Officer of FEDA. Speaking at the inauguration, the Prime Minister said: “The establishment of FEDA in Rwanda reflects our commitment to not only fostering economic development within our borders but also to playing a pivotal role in the economic transformation of our continent. This initiative is a step closer to the realisation of the goals outlined in the Agenda 2063 of the African Union which lays great emphasis on the transformation of African economies and acceleration of economic growth on the continent.” He noted that despite Africa’s significant resource endowments and contiguous markets, the continent had the lowest level of intra-regional trade in the world, adding that the continent’s share of value created remained the lowest across many products and commodities due to sub-optimal value addition.
On his part, President of Afreximbank, Prof. Benedict Oramah noted: “FEDA adds to the pool of institutions helping Africa to create its own capital base for development. With a focus on providing long-term, patient capital targeting all segments, from SMEs to corporates, and cutting across dynamic sectors of value-addition, services, and technology, FEDA is poised to drive Africa’s development under a new vision of de-commoditised, growth-oriented pathways underpinned by a dynamic private sector.” Prof. Oramah said “The strategic importance of FEDA is becoming apparent just four years after it began operations. Funds Under Management under different strategies amount to about $800 million and FEDA is using some of these funds to create and mobilise additional funds. FEDA is also a co-promoter of a $500 million Africa Credit Opportunity Fund (ACOF) and is currently creating a $100 million Venture Capital Fund to focus on start-ups and SMEs with seed funding from Afreximbank.” The inauguration, which took place at the Radisson Blu Hotel and Kigali Convention Centre, was witnessed by over 150 guests drawn from the Rwandan government, the business and diplomatic community in Rwanda and representatives of the African Union and other regional economic and political bodies among others. FEDA became the Fund Manager of the US$1 billion AfCFTA Adjustment Fund in 2023.
“Across all of our fund strategies we’re probably going to be making I would say 10 to 15 investments (this year),” Ngoyi said. “We have the private credit fund that we manage. We expect to see transactions – we had four last year, we expect more this year.” She declined to disclose the size of the planned investments, but said manufacturing and logistics were other sectors of interest. FEDA’s investments so far include $85 million in industrial zone developer ARISE IIP in 2022, as well as taking a minority stake in pan-African technology company Liquid Intelligent Technologies in 2021 and putting an undisclosed amount last year into the 60,000 barrel-per-day Cabinda Oil Refinery in Angola. “You are not going to see FEDA investing in minerals and metals. We have to go beyond that. But you will see FEDA investing in refineries as it has done with Cabinda refinery in Angola,” said Oramah, Afrexim’s head.
