A Pan-African financing package, scripted to bail out governments and financial institutions from the pangs of the global meltdown, was initiated yesterday in Abuja by African Finance Corporation (AFC) and African Export-Import Bank (AFRIEXIM Bank).

Specifically, the scheme would focus on trade and infrastructrual development financing, which would involve mobilisation of hundred of million dollars resources, for on-lending to banks in the region, for the targeted economic agenda.

The initiative is coming on the heels of assessed fund paucity, which has led to re-scheduling of off-shore credit lines to African money deposit banks, sequel to the global financial crisis.

Only last month, Union Bank of Nigeria Plc got a lifeline worth $20 million from the AFC for the financing of the acquisition of a new aircraft by Arik Nigeria Airlines. Last year, the Nigerian government withdrew its entire equity worth $480 million in the AFC, following due process controversy trailing the investment by the Central Bank of Nigeria (CBN) governor, Prof. Chukwuma Soludo, shortly after President Umaru Musa Yar'Adua assumed office. The withdrawn fund is reportedly being kept in an escrow account.

Mr. Andrew Ali, the chief executive officer of AFC and Mr. Jean Louis Ekra, the president of AFRIEXIM Bank, yesterday declined comments on the AFC issue.

However, desk officers of the two institutions told reporters that Soludo remained the chairman of the AFC despite Nigeria's action.

According to him, the bailout plan was being initiated because of the interest of local banks which still have equity in the AFC. They declined to shed more light on the details of the resources to be pooled by the two bodies and the terms under which they would be drawn by the banks.

The event witnessed by the African Development Bank (ADB) Resident Representative in Nigeria, Dr. Avre Assah, " provides a framework for collaboration between the two institutions by harmonising their resources for the promotion of trade and economic development in Africa."

It also " among other things, sets out the basis for joint origination and financing of trade and projects in Africa by the two institutions. The agreement will contribute to significantly boosting African trade by several hundreds of millions of dollars,'' according to a statement after the brief signing ceremony by Ekra and Ali.

The statement also said the agreement underscored the two institutions' strategic focus on leveraging pan - African partnerships for addressing the challenges before the African continent, especially in the context of the prevailing global financial crisis.

They pointed out that member states could only begin to appreciate the value of the institutions they created through creative, result-oriented partnerships. "By combining the collective resources and capacities of our two institutions, we will creatively offer appropriate solutions to assist African businesses to weather the current turbulence in the international financial markets, while laying the foundation for a sustained expansion of trade finance activities in Africa.

"It is in this spirit that AFC and AFREXIMBANK have already collaborated on a major trade finance transaction and the signing of this agreement would facilitate the deepening of our collaborative efforts," the statement added.

AFREXIMBANK was established in October 1993 by African governments, African private investors and non-African investors for purposes of financing and promoting intra- and extra-African trade.

The AFC on the other hand, is a hybrid investment bank and development finance institution established in 2007 to help mobilise and channel resources for Africa's development. The corporation focuses on the enhancement of infrastructure in Africa, especially in the areas of power, transport, heavy industries, oil and gas, mining and telecommunications sectors.

Source: Guardian