FDH Bank Plc seals landmark trade deal with Afreximbank of US$10m for agricultural procurement
FDH Bank Plc has signed a landmark trade deal of US$10 million with African Export–Import Bank (Afreximbank) under Africa Trade Exchange (ATEX) facility agreement — which has been reported as set “to reshape the landscape of agricultural procurement in the Southern African region”.
The agreement was signed on Saturday, November 11 at the Pan-African Intra African Trade Fair (IATF) in Cairo, Egypt by FDH Bank Deputy Managing Director, George Chitera and Afreximbank’s Director for Trade Finance, Gwen Mwaba.
FDH Bank is also one of the sponsors of the all-important IATF — the only Malawian company to support the continental event and was also part of the partners in last year’s edition held in Durban, South Africa.
On its website, Afreximbank explains that ATEX is an online platform developed by the Economic Commission for Africa (ECA) and Afreximbank “which stands as beacon for transparency and competitive access to critical supplies such as food, fertilizers and agricultural chemicals”.
“This facility agreement will empower FDH Bank to efficiently pool procurement for the upcoming 2023/2024 growing season, aligning with Malawi Government’s strategy to bolster agricultural activities.”
The statement further described the deal as a “milestone [that] not only reinforces the bond between Afreximbank and FDH Bank but also positions FDH as the first bank in Southern Africa to access a facility under ATEX”.
The Southern Africa’s first ATEX deal is aimed to support importation of strategic and enabling commodities like fertilizer and fuel in Malawi and in his statement, FDH Bank Deputy Managing Director, Chitera says the deal is very essential since Malawi is an agro-based economy, whose staple food is maize cultivated between December and June.
“For a good harvest, there is need for fertilizer which is not locally produced,” he said, adding: “The facility will assist the bank in supporting its clients in timely importation of this fertilizer for the 2023/2024 growing season.
“Besides this, the facility will also allow the bank to increase its support to the government of Malawi by increasing its credit facilities to importers of petroleum products.
“Of late, Malawi has been facing fuel shortages due to lack of foreign exchange and this being a forex-lean season, banks are limited in their offering towards the fuel importation.
“Through the ATEX facility, the Bank will be able to support fuel importation as the facility will allow the bank to bridge the gap between the ordering and delivery of the fuel and the actual settlement of the payments to the suppliers.”
Above all this, Chitera said, “the facility comes in at a time when most of the foreign banks are de-risking from African markets — thereby reducing their exposure to African economies which limits the level of financial support to trade within and outside the continent”.
“The provision of the facility, therefore, asserts Afreximbank’s commitment in facilitating and promoting trade in Africa. With the increasing impact on global supply chain disruptions emanating from the challenging macroeconomic environment at the back of the CoVID-19, the Russia/Ukraine war and locally, the impact of Cyclone Freddy, such financing products from Afreximbank go a long way in cushioning the supply chain disruptions that may exists due to limited resources.”
On the role played by FDH Bank at the Fair, Chitera said they are “broadening outwork to become a leading financial services provider in Malawi and in the region and be able to facilitate trade in the country and between Malawi and other countries for the development of the country”.
“FDH Bank is engaging businesses and demonstrating its financial solutions that help importers and exporters to effectively do their business as well as assisting importers and exporters with solutions to mitigate international trade risks and provide financing to enable growth.
“FDH Bank Plc’s strategy is informed and aligned to Malawi Government national vision, MW2063 and to promote Malawi and turn it into an industrialized middle income country and develop its people,” Chitera said.
Afreximbank is a pan-African supranational multilateral financial institution created in 1993 under the auspices of the African Development Bank.
In June this year, Afreximbank supported Malawi Government with a grant of US$2.6 million (approximately K2.6 trillion) for the financing of mega farms, establishment of an industrial park in Blantyre and the special economic zone, among other projects.
And in New York, on the sidelines of the 78th United Nations General Assembly in September, President Lazarus Chakwera hailed Afreximbank for being a key partner to Malawi in strengthening sustainable development.
Chakwera made the remarks during an interface meeting with Afreximbank president, Bennedict Oramah and his delegation where he expressed his gratitude to Oramah for the critical role they are playing in achieving the staff level agreement between the Malawi Government and the International Monetary Fund (IMF).
He told Malawi News Agency (MANA) in New York that the recent signing of the historical agreements between Malawi and Afreximbank for the financing of developmental projects, is a clear indication of the bank’s commitment to develop the country.
On his part, Oramah reaffirmed Afreximbank’s commitment to continue helping Malawi’s quest for national rebuilding in the aftermath of the devastating Cyclone Freddy.
He emphasised that Afreximbank will support Malawi through mega farms as one way of improving food security as the country is recovering from the effects of climate change and pandemics.
Thus Chitera said FDH Bank Plc is pleased with this Afreximbank Africa Trade Exchange facility which has come in very timely.
At last year’s Intra African Trade Fair (IATF) — where FDH Bank Plc solidified its mark across Africa — Chitera said then that they were optimistic of the trade and investment opportunities the fair was expected to bring — which has come to pass through the Africa Trade Exchange.
He had said they were looking at facilitating trade across Africa and took the opportunity to partner with IATF in order to increase their visibility to potential clients, engage new trade partners and cement existing relationships with its global counterparts.
“The vision of FDH Bank Plc is to be the leading provider of first class financial solutions in Malawi and the Southern African region and platforms like these are the doors to facilitating the success and implementation of that vision,” he had said.
Founded in 2008, FDH Bank Plc celebrated its 15th anniversary in September and under the slogan, ‘Grow With Us’, it prides itself in the quality of its services, which have created a formidable reputation in all its business brands.
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