The African Export–Import Bank (Afreximbank) is ready to support Guyanese with innovative financing solutions, thereby enabling them to capitalize on the country’s oil boom. By leveraging supply chain finance and other tailored financial products, Afreximbank’s Regional Chief Operating Officer (COO), Okechukwu Ihejirika, said Guyanese businesses can enhance their cash flow and gain a competitive edge in the market.
In a recent interview on the Energy Perspectives Podcast – powered by the Guyana Energy Conference and Supply Chain Expo – Ihejirika underscored the bank’s approach to being a solutions provider, a strategy that has propelled Afreximbank’s balance sheet from US$5 billion in 2015 to nearly US$40 billion today.
This approach involves tailoring financial products to meet the specific needs of the market. In Guyana, which is experiencing unprecedented growth due to massive oil discoveries offshore, he said Afreximbank sees immense opportunities for collaboration and investment.
“We understand that Guyana is the fastest growing country in the world by all indicators. This is interesting and boils down to the huge oil discovery in Guyana and to the ease of doing business that the president (Dr. Irfaan Ali) recently spoke of,” said Ihejirika. He was keen to note that Guyana presents a fertile ground for investment, and Afreximbank aims to foster interest in this dynamic market.
One of the key innovative financing solutions Afreximbank offers is supply chain finance. This involves providing financing to companies based on their receivables, allowing them to get paid early for their invoices and thus improve their cash flow.
“Typical financiers may not be happy to say ‘let’s finance local producers’ because they will want to bring in people from our side,” Ihejirika noted.
“But because we have seen it happen elsewhere and it is a successful model, we realize that it is important that even those locals who now want to take advantage of this boom are encouraged to do so.”
Ihejirika also elaborated on Afreximbank’s broader mission to strengthen trade relationships between Africa and the Caribbean. He pointed out the historical connection between the two regions, which dates to the slave trade. Today, the bank aims to create a new “middle passage” where people voluntarily engage in business, moving beyond the shackles of the past.
Afreximbank’s efforts also stem from engagements between the African Union and the Caribbean Community (CARICOM), recognizing the historical ties and the need to create robust trade relationships. Current trade between the two regions is minimal, hindered by logistical challenges such as the lack of direct shipping or air routes. Ihejirika highlighted the success of unified efforts during the COVID-19 pandemic, where both regions collaborated on a vaccine acquisition model facilitated by a US$2 billion guarantee from Afreximbank. This collaboration, the COO said, demonstrated the potential benefits of fostering closer economic ties.
Discussing the financial resources available for the region, Ihejirika noted that Afreximbank has been at the forefront of making significant financing available to the Caribbean. The bank’s board initially approved US$1.5 billion for qualifying projects in the region, with plans to double this amount to $3 billion.
“The entire conversation of boosting trade between the two regions would be worthless if we don’t talk about financing,” Ihejirika emphasized. He further noted that the establishment of a branch in Barbados in August 2023 was a strategic move to facilitate this goal. With 11 out of the 15 CARICOM members as partner members, the potential for borrowing and investment is substantial.
The COO explained that this financial commitment is directed towards projects that can enhance trade and economic growth in the Caribbean. By providing the necessary funding, he said the aim of Afreximbank is to bridge the gap between Africa and the Caribbean, fostering resilience and shared prosperity.
