Kenyan to head Afrexim new fund

The African Export Import Bank (Afreximbank) has tapped Kenyan banker Philip Kamau to head its newly created Fund for Export Development in Africa (Feda).

The fund set up with an initial $100-million (about Sh10 billion) will seek “to leverage the role the Cairo-based Afreximbank has played in mobilising trade finance into Africa” to mobilise foreign direct investment (FDI) into the continent. Feda will be headquartered in Mauritius.

The fund will invest across all market segments in Africa, including Kenya but will have its greatest focus on small and medium-sized enterprises.

Feda, the wholly-owned development-oriented subsidiary of Afreximbank, will provide seed capital to companies in Afreximbank’s key focus sectors, including agri-business, manufacturing, consumer and retail, financial services, technology, travel and tourism, transport and logistics and industrial parks.

“The long-term objective of Feda is the provision of equity capital and related financial, non-financial and support services to operators in Africa’s tradable and support sectors, with emphasis on activities that support intra-African trade and value-added exports,” said Benedict Oramah, President of Afreximbank and Feda chairman.

Dr Kamau, who has been a senior director in charge of finance at the Afrexim, said a feasibility study conducted for Afreximbank had identified a funding gap which was inhibiting intra-African trade adding that Feda would provide equity and to leverage FDI to help close that gap.

“Feda would start investment activities in 2019, with a target to invest $10 million (about Sh1 billion) during the year. It is also targeting to raise $450 million (about Sh45 billion) in FDI during the period,” he said.

Afreximbank, which finances and promotes African trade, has in the past decade become a significant player in Kenya’s economy, having financed big-ticket deals, including national carrier Kenya Airways.