- Development of the Misurata Free Zone, road to Chad and Niger, and support for the Sahel-Saharan Bank for Investment and Trade are some of the key projects targeted in new era of cooperation.
- The partnership is poised to facilitate the development of vital infrastructure, bolster trade, and support Libyaโs efforts in economic diversification and reconstruction.
- With a GDP of $50.49Bn in 2023, Libya is ranked as Africaโs 12th largest economy. However, less than 10% of its trade occurs with other African nations.
Libya has formally acceded to the Afreximbank Establishment Agreement, becoming the 53rd member nation of the pan-African financial institution. The entry of oil-rich Libya marks a crucial step in advancing continental integration through trade and investment.
Signed by Libyaโs Minister of Finance, Dr. Khaled Al-Mabrouk Abdullah, the accession document sets the foundation for a new era of cooperation between Libya and African Export-Import Bank (Afreximbank). The partnership is poised to facilitate the development of vital infrastructure, bolster trade, and support Libyaโs efforts in economic diversification and reconstruction.
Key development projects to drive intra-African trade
Libyaโs collaboration with Afreximbank focuses on transformative projects aimed at boosting regional connectivity and trade. Among the initiatives:
Development of the Misurata Free Zone: This project aims to establish Misurata as a thriving trade and logistics hub, driving economic growth and attracting foreign investment.
Road Connectivity to Chad and Niger: The construction of a road linking Libya with Chad and Niger is expected to enhance cross-border trade, fostering stronger economic ties within North and West Africa.
Support for the Sahel-Saharan Bank for Investment and Trade (BSIC): Afreximbank will provide financial and technical assistance to expand BSICโs operations across East Africa, enabling broader access to financing for regional trade.
Training for Libyan Exporters: To capitalize on Africaโs growing markets, Libyan exporters will receive technical training and support in trade finance structuring, ensuring they can effectively access and benefit from intra-African trade opportunities.
These initiatives not only enhance Libyaโs economic prospects but also align with Afreximbankโs mission to foster industrialization and trade integration across the continent.
Deal a catalyst for Libyaโs economic reconstruction
Libyaโs accession to Afreximbank comes at a pivotal time as the nation seeks to rebuild its economy following years of instability. With a GDP of $50.49 billion in 2023, Libya is ranked as Africaโs 12th largest economy. However, less than 10 percent of its trade occurs with other African nations, highlighting significant untapped potential.
Dr. Khaled Al-Mabrouk Abdullah highlighted the importance of this partnership in supporting Libyaโs reconstruction and economic diversification goals. โThis partnership will not only provide vital financial and technical support to Libya but will also enhance the countryโs role in intra-African trade,โ he remarked. By leveraging Afreximbankโs resources and expertise, Libya aims to re-establish itself as a regional trading hub and a vital player in Africaโs economic landscape.
Afreximbankโs role in transforming African trade
Since its inception, Afreximbank has played a pivotal role in financing and promoting trade across Africa. The institutionโs innovative solutions have supported the transformation of Africaโs trade structure, accelerating industrialization and fostering intra-regional commerce.
Pan-African Payment and Settlement System (PAPSS)
Afreximbankโs commitment to the African Continental Free Trade Agreement (AfCFTA) is evident through its launch of PAPSS, a revolutionary platform adopted by the African Union. This system enables seamless cross-border payments in local currencies, reducing transaction costs and promoting trade efficiency.
To support countries participating in the AfCFTA, Afreximbank is establishing a $10 billion Adjustment Fund. This initiative aims to cushion member states as they adapt to the new trade dynamics under the free trade agreement.
With total assets and contingencies exceeding $37.3 billion as of December 2023, Afreximbank continues to drive economic transformation across Africa. Its subsidiary entities, including the Fund for Export Development in Africa (FEDA) and AfrexInsure, further extend its impact by supporting export-oriented businesses and managing trade-related risks.
Afreximbank in unlocking Libyaโs trade potential
By joining Afreximbank, Libya gains access to a suite of financial and technical resources tailored to deepen trade and investment relations with other African nations. This partnership is expected to catalyze Libyaโs efforts in transitioning from an oil-dependent economy to a diversified one, leveraging its geographical position as a gateway between North Africa and the rest of the continent.
Professor Benedict Oramah, President and Chairman of the Board of Directors at Afreximbank, expressed enthusiasm about Libyaโs accession. โLibyaโs historical connections with the rest of the continent position it as a crucial player in advancing continental trade and economic integration,โ he stated. This strategic collaboration will enable Libya to tap into Afreximbankโs extensive portfolio of products and services, fostering trade-enabling infrastructure and strengthening its economic foundation.
While Libyaโs membership is a significant achievement, the ratification of the Afreximbank Establishment Agreement remains a crucial step to complete the accession process. Once ratified, Libya will unlock the full benefits of its membership, ensuring its public and private sectors can access Afreximbankโs comprehensive financial solutions.
The countryโs integration into Afreximbank underscores a broader vision of an interconnected Africa, where trade and development cooperation transcend borders, driving collective prosperity.
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