Africa-Press – Zimbabwe. South Africa’s recent accession to African Export-Import Bank (Afreximbank) Establishment Treaty as its 54th sovereign member could not have come at a more opportune moment.
The global economy, according to UNCTAD, is wobbling at 2,8%, well below the pre-pandemic average of 3,2%.
Climate shocks are no longer future risks; they’re here with us.
Trade routes are shifting amid geopolitical flux. Alliances are reshuffling, and the old certainties are fading fast.
This turbulence presents Africa the long-awaited opportunity to expeditiously deepen regional integration.
Through the African Continental Free Trade Area (AfCFTA), the continent is financing infrastructure that actually connects markets and investing in the kind of resilience that cushions its economies against global shocks.
By relying on its sizeable youthful market of 1,4 billion people, Africa is building its preferred destination as a source of raw material and for manufactured goods.
South Africa’s accession unlocks the broad continental coverage by Afreximbank, while placing one of Africa’s leading economies, responsible for nearly 19,1% of the continent’s total trade in 2024, at the strategic core of transforming Africa’s trade architecture.
South Africa’s membership influences economies beyond the Southern African region, extending into the East, West and North of Africa.
The Multilateral Bank’s headline commitment of US$11 billion not only aligns with South Africa’s National Development Plan 2030 but also reiterates the nation’s commitment to enhancing African industrial development.
This includes a US$8 billion country programme focused on energy, mineral processing, and infrastructure and a US$3 billion inclusive financing programme aimed at supporting Small and Medium Enterprises (SMEs) and economic transformation – all critical areas for South Africa’s growth.
Building on successful initiatives over the years, South Africa will invest heavily in mineral processing, automotive manufacturing expansion, and industrial parks/special economic zones to retain value, create jobs, and boost government revenue.
At a time when critical minerals demand is exploding globally, surging nearly 30% in 2024 alone, South Africa – which accounts for of mining sales, 59% of global production share and vast PGM reserves – is uniquely positioned to innovate, expand industries and order global trade and diplomacy.
Instead of exporting raw minerals like iron ore and importing finished goods like batteries at a premium, South Africa will now be in a position to process, refine and manufacture more at home, capturing greater value locally.
By processing and manufacturing locally, South Africa enhances its ability to access international trade frameworks like the African Growth and Opportunity Act (AGOA), to expand markets for its products, while maintaining Africa’s economic agency.
Additionally, South Africa will invest more in critical infrastructure, especially energy generation and transmission. This builds on existing momentum, including strategic support to backbone infrastructure including ZAR2.36 billion to Eskom to sustain power supply and US$165 million towards a US$0,5 billion Transnet facility to strengthen logistics capacity, ensuring that energy and transport constraints no longer bottleneck industrial expansion.
Afreximbank has also supported industrial value addition through initiatives such as a US$3,5 million Project Preparation Facility, which advanced feasibility studies for an US$849 million titanium dioxide (TiO2) pigment plant at Richards Bay Industrial Development Zone with a planned capacity of 80 000 metric tonnes per annum.
Together, these interventions aim is to ensure reliable power, efficient logistics, and fully operational industrial value chains capable of unlocking South Africa’s beneficiation and manufacturing potential.
Last year, Afreximbank and Government of South Africa acting through Infrastructure South Africa Programme within the National Department of Public Works and Infrastructure signed a US$20m joint project preparation facility framework agreement, expected to unlock up to US$750 million of high-quality, bankable projects across several critical sectors, including energy, transport and logistics, and digital infrastructure.
Moreover, for the private sector, which drives over 70% of all jobs in South Africa, the partnership aims to drive more private sector-led transformation by forging strategic partnerships with some of the leading existing financial institutions.
These collaborations will leverage private capital and expertise to catalyse reforms, unlock large-scale investments, and foster a resilient, inclusive economy.
In addition, there are deliberate efforts to strengthen domestic institutional capacity, particularly in transforming South Africa’s Export Credit Insurance Corporation (ECIC) into a full-fledged Eximbank.
ECIC will be capable of underwriting industrial development, economic diversification, and export growth, empowering it to lead national economic programmes. Afreximbank also launched a US$ 1billion South Africa-Africa Trade and Investment Promotion Programme (“SATIPP”) which is a joint programme launched with the ECIC with the aim of promoting and expanding trade and investment between South Africa and other African countries. This joint programme enabled the completion of the US$297 million Zimborders project as well as supported the participation of South Arican Banks in the US$24 billion Mozambique LNG project in Mozambique.
Given the success of this initiative, Afreximbank is considering increasing the program to US$3 billion.
Lastly, the US$3 billion inclusive financing package targets SMEs, who drive 19-34% of GDP and 60% of formal employment. The programme will deliver tailored trade finance for exporters, working capital for processors, and technology upgrades to scale suppliers. This amplifies Afreximbank’s track record of over 296 000 SMEs registered, more than 155 000 jobs created, and 6 500+ businesses trained since 2023, with 69% youth-led and 78% women-led enterprises prioritised. The aim is to empower marginalised economic groups, foster inclusive growth, and align with AU’s Agenda 2063 for equitable industrialisation.
South Africa strengthens Afreximbank’s footprint in one of the continent’s most sophisticated financial and industrial markets. It anchors Southern Africa more firmly within the continental trade architecture and aligns with the Bank’s core mandate of facilitating and expanding intra-African and extra-African trade while accelerating industrialisation. This partnership enhances South Africa’s ability to support exporters, industrial projects, and regional value chains, while advancing development across the continent.
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