The Portfolio Committee on Trade, Industry, and Competition has formally received the news of South Africa’s entry into the status of a full sovereign member (Class A shareholder) of the African Export-Import Bank (Afreximbank). This is after the signing of the Instrument of Accession by South Africa’s President Cyril Ramaphosa and Afreximbank President Dr. George Elombi, which marks a new era in the country’s economic direction.
The accession process involved rigorous legal and constitutional requirements, such as approval by Cabinet and Parliament in terms of Section 231(2) of the Constitution. South Africa can now take advantage of the Bank’s investment-grade status and preferred creditor status following its full membership. This will give the country’s state-owned enterprises and exporters a competitive edge in terms of financing and risk protection, which is more secure than conventional commercial debt.
At the heart of this collaboration is a huge financing pledge of US$11 billion by Afreximbank, and this financing is channeled through two main sources: US$8 billion for a country program that targets energy security, mineral processing, and infrastructure, and US$3 billion for an inclusive financing program aimed at strengthening Small and Medium Enterprises (SMEs) and economic transformation.
Committee Chairperson Mr. Mzwandile Masina emphasized that this complementarity between industrial investment and inclusive growth is critical for the country, as this collaboration is a clear demonstration of international confidence in the country’s economic potential and cements its position as the best industrial and investment destination on the continent.
This membership is anticipated to serve as a catalyst for the African Continental Free Trade Agreement (AfCFTA), and the advanced industrial base of South Africa makes it an essential link between African manufacturers and the market, thereby promoting regional trade and sustainable development.
While celebrating this accession, the committee noted that it is important to have proper oversight and implementation, and the end goal remains that these multi-billion dollar investments will result in tangible outcomes for citizens, such as job creation and economic stability.
