Latest news with #AfricanExportImportBank
South China Morning Post
a day ago
- Business
- South China Morning Post
China's payment system spreads across Africa and Asia amid US trade war
China's cross-border yuan payment system has signed up more financial entities from Africa, Central Asia and the Middle East, as Beijing accelerates efforts to promote the global use of its currency amid rising tensions with the United States. A group of six financial institutions officially joined the yuan-based Cross-border Interbank Payment System (CIPS) as direct participants during a ceremony in Shanghai on Wednesday, becoming the latest entities to sign up to China's alternative to the Society for Worldwide Interbank Financial Telecommunication (Swift) system. The newcomers include the African Export-Import Bank, First Abu Dhabi Bank, South Africa's Standard Bank, Singapore's United Overseas Bank, the Kyrgyzstan-based Eldik Bank, and Chongwa (Macau) Financial Asset Exchange, a state-owned asset trading platform from the special administrative region, according to state broadcaster CCTV. Beijing has been promoting the CIPS – which was first launched in 2015 – as it strives to expand the use of the yuan in global trade and hedge against any potential moves by the United States to impose financial sanctions on Chinese entities. The system had 174 direct participants as of the end of May, though most of them were made up of domestic and overseas branches of Chinese banks, as well as Chinese branches of global financial giants such as HSBC, JP Morgan and Citibank. A direct participant refers to an entity that owns a CIPS account and can directly remit through the system, while indirect participants have to rely on others to complete transactions on their behalf.
Zawya
2 days ago
- Business
- Zawya
Why is Afreximbank in focus over Africa debt restructuring deals?
NAIROBI - The African Export-Import Bank has been thrust into the spotlight due to a dispute over whether its loans to African countries now in default should be subject to writedowns in debt restructuring deals. Here are more details about the Cairo-based lender: WHAT IS AFREXIMBANK'S ROLE? Afreximbank was set up by African governments in 1993 to provide trade finance when their economies were reeling from a debt crisis resulting from a crash in commodities prices. Its balance sheet has since grown to $35 billion. Though mandated to promote trade, it has also helped economies weather shocks like West Africa's 2014 Ebola outbreak and the COVID-19 pandemic through a $3 billion stabilisation facility. Crisis lending has turned Afreximbank into an important source of hard currency for cash-strapped governments. It launched a central bank deposit programme in 2014 modelled on a Banco Latinoamericano de Comercio Exterior initiative to raise capital from regional central banks to fund development. From just $75 million in initial deposits, this has now mobilised $37 billion cumulatively, or 40% of Afreximbank's sources of financing. WHO OWNS AFREXIMBANK? Afreximbank has four shareholder categories. Class A is made up of African governments, which hold more than 50% of shares spread among 53 member states. The African Development Bank, Africa's biggest development lender, and other sub-regional financial institutions are also category A shareholders. African financial institutions and private funds hold Class B shares - about a quarter of the total. Class C shares are reserved for overseas investors. Afreximbank created Class D shares for general investors in 2017, listing them on the Mauritius Stock Exchange, and is considering a secondary listing. WHAT IS AFREXIMBANK'S STATUS? The current debate focuses on whether Afreximbank enjoys Preferred Creditor Status - a widely accepted principle giving multilateral development banks priority if a borrower faces distress. Though accepted by convention rather than awarded by an entity, the status would insulate Afreximbank's lending from painful haircuts during the kinds of sovereign restructurings recently carried out by Ghana and Zambia. Afreximbank says its founding treaty confers it with Preferred Creditor Status, precluding it from engaging in debt restructuring talks with its member states. Critics, however, point out that some of Afreximbank's lending is done on commercial terms - or market rates - rather than the concessional terms the International Monetary Fund or World Bank employ to extend loans and grants. Its ownership structure also includes commercial investors. WHAT DISPUTES IS AFREXIMBANK FACING? Afreximbank is in a dispute in English courts with South Sudan over a claim of around $650 million across three facilities from 2019 and 2020. Ghana, struggling to conclude its debt overhaul, said it has invited the lender for talks on how to restructure its Afreximbank debt. Zambia has stated that its Afreximbank loan, estimated by think tank ODI Global to be $45 million, will be restructured due to its commercial nature. Malawian officials quoted in domestic media outlets say they want to engage Afreximbank to restructure and lighten the country's debt service burden. Afreximbank has repeatedly said it is not in restructuring talks with any of its member states. WHAT ARE THE IMPLICATIONS OF THE STATUS DEBATE? Afreximbank's two main dollar bonds suffered their worst daily drop in over a year this month after Fitch downgraded it to BBB-, from BBB, citing emerging credit risks. Afreximbank blamed the downgrade on an "erroneous" interpretation of its founding treaty. Given the negative outlook from Fitch, Afreximbank is at risk of further downgrades, which could raise its borrowing costs and trigger some forced selling of its bonds. Some investors think the outcome of the standoff could have a bearing on the successful conclusion of current and future debt restructurings. For Afreximbank, this is a sensitive time. It is expected to pick a new president during its annual meeting later this month, replacing Nigerian economist Benedict Oramah, who is set to step down after a decade in charge.
Bloomberg
10-06-2025
- Business
- Bloomberg
Afreximbank Says Fitch Rating Cut Based on ‘Erroneous View'
African Export-Import Bank lashed out at Fitch Ratings saying its decision to cut its assessment to one step above junk with a negative outlook was based on a false premise. Fitch last week downgraded Afreximbank to BBB- from BBB, one step above the speculative level that would limit the pool of funds allowed to invest in its debt, flagging concerns that the Cairo-based bank's loans to Zambia and Ghana may need to take losses in ongoing debt restructuring exercises.
Bloomberg
06-06-2025
- Business
- Bloomberg
African Panel Challenges Fitch's Afreximbank Ratings Downgrade
An African Union-backed panel challenged Fitch Ratings to review its downgrade of the African Export-Import Bank's rating, questioning the company's classification of loans to three countries. Fitch cut its assessment of Afreximbank's debt closer to junk earlier this week, citing the risk that money owed to the lender by sovereign borrowers might be included in those nations' debt restructurings. The downgrade reduced the bank's rating to BBB- — one step above the speculative level that would limit the pool of funds allowed to invest in its debt.
Bloomberg
19-05-2025
- Business
- Bloomberg
Ghana at Loggerheads With Afreximbank Over $768 Million Debt
Ghana, emerging from a bruising debt restructuring process, faces a dispute with African Export-Import Bank, one of its biggest commercial creditors, over whether it should take losses on a $768.4 million liability. The finance ministry says the debt must be treated comparably to others it's restructured, from bilateral loans with China to $13 billion in eurobonds. But Afreximbank — which was set up by African countries and private investors more than three decades ago — insists it has preferred creditor status, meaning member states can't force it to take losses.
