JOHANNESBURG: South Africa moved closer to becoming a full sovereign member of the Africa Export-Import Bank, the continent’s leading provider of trade finance, after the cabinet gave its approval to the plan, the government said on Thursday.
Membership of Afreximbank, as the lender with a balance sheet of $35 billion is known, would give Africa’s most advanced economy access to new trade investment products when its tariff row with the United States has increased its need for new export markets.
Afreximbank has, however, in recent months been in a dispute over whether its loans to African nations should be restructured in the event of defaults.
The government said it would get a class A shareholding, meaning it would have an increased role in Afreximbank’s governance.
That would include “influence over its strategic direction, structure and leadership appointments,” it said in a statement containing cabinet decisions.
The government did not give a timeframe on when South Africa’s membership would be finalised.
South Africa was not able to fully join Afreximbank as a state member when it was created in 1993 as the country was still under apartheid rule.
It took up an unspecified amount of shareholding in 2017 without acceding to the treaty founding the bank.
Afreximbank has four shareholder categories including class A, which is made up of African governments that hold more than 50% of shares spread among 53 member states, and regional multilateral financial institutions including the African Development Bank.
The rest of the shares are held by commercial banks and private funds, overseas investors and general investors through depositary receipts listed on the Stock Exchange of Mauritius.
The Cairo-based Afreximbank did not respond immediately to a request for comment on South Africa’s cabinet approval.
-Duncan Miriri
