Guyana negotiating US$500M loan from African bank

Oct 31, 2023 News

---

AfriCaribbean Trade and Investment Forum 2023…

– funding to go towards infrastructure projects

By Kiana Wilburg

Kaieteur News – President Dr. Irfaan Ali on Monday revealed that Guyana is currently engaged in discussions with the African Export-Import Bank (Afreximbank) for a substantial US$500 million loan.

This potential influx of funds is earmarked for the nation’s ambitious line-up of transformative infrastructure initiatives. The announcement was a focal point during Dr. Ali’s keynote speech at the AfriCaribbean Trade and Investment Forum, hosted at the Marriott Hotel, which concludes today. Emphasizing the challenges faced by African and Caribbean nations to tackle key issues—ranging from food to energy insecurity—he spotlighted the crucial role of institutions like Afreximbank. Such organizations he said provide essential financing that can enable nations to tackle and surmount their various challenges. It was here that Dr. Ali confirmed the ongoing negotiations between Guyanese officials and the bank for the sizable bridge financing.

Furthermore, President Ali highlighted other significant collaborations with African financial entities that are opening doors for development in Guyana. A notable mention was made about Guyanese businessman and accountant, Floyd Haynes, the founder of New Hayven Merchant Bank which launched just last year.The Head of State said Haynes has been a bridge between Africa and Guyana, undertaking multiple trips to foster discussions that bolster financial opportunities for the Guyanese market.

“Floyd has held many discussions with the Africa Exim Bank to do a number of things. Just like the government, they (his Merchant Bank) are in final stages of negotiating a US$15 million facility to support local businesses, that is, small and medium-scale enterprises here in Guyana. His bank is also working with the Exim Bank, I am advised, in support of one of the first local group of women (Sispro Inc.), who would have won two of the oil blocks here in Guyana,” the President said.

In a call to action, President Ali also urged the regional private sector to seize the moment. He emphasised the importance of engaging with Afreximbank officials present at the forum. His challenge to them was clear – to put forth proposals that could definitively address the region’s recurring transport issues. The Head of State said, “I would be furious… I will even consider it a severe missed opportunity by the regional private sector if they cannot form a consortium and use this opportunity that the Exim Bank is offering to end our regional transport system failure and I speak specifically about our maritime transport infrastructure.”

He added, “We can plant and grow as much as we want. We can do agro-processing, manufacturing, and industrial development. We can reengineer the supply chain, but we have to move things. We have to move things throughout the region.” He said therefore that the matter of maritime and logistical trade woes must be top of mind. The President said he has received assurances from the African Exim bank that it is ready to examine a proposal from the regional private sector that offers a pragmatic solution.

“Every single state in CARICOM has made it clear that we will give all the incentives necessary to facilitate the building of a regional transport infrastructure system to solve the problem of regional transport. It is in your hands now. And we will champion it…We are too small to think and act in silos,” the President said.

Ali was also keen to highlight that the African Exim Bank has an asset base totalling US$35B. He then urged the private sector to bear in mind that financial services sector account for more than 50% of the bank’s loan portfolio, adding that oil and gas only accounts for 15 percent. He also noted that manufacturing accounted for 4.5%, power generation accounted for 4.2%, and construction 3.5%. “This tells you that the bank has a diversified portfolio of opportunities you can tackle,” Ali said.

The president then charged the regional private sector to be proactive and embark on a new chapter of development for the African-Caribbean relations.

ABOUT THE FORUM AND BANK

The idea for ACTIF2022 resulted from an official Afreximbank visit to Barbados in September 2021, which followed that month’s inaugural Africa/CARICOM Summit. During the visit, the Government of Barbados and Afreximbank identified the AfriCaribbean Trade and Investment Forum as a key strategic activity towards institutionalising the engagement between both regions’ private sectors to advance trade and investment relations. The inaugural edition of the AfriCaribbean Trade and Investment Forum was held in Bridgetown, Barbados from September 1-3, 2022, and the second edition is being held in Georgetown, Guyana, from October 30-31, 2023.

As for the African Export-Import Bank (Afreximbank), it is a Pan-African multilateral financial institution, mandated to finance and promote intra-and extra-African trade. For 30 years, the bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa.

A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries to effectively participate in the AfCFTA. At the end of 2022, Afreximbank’s total assets and guarantees stood at over US$31 billion, and its shareholder funds amounted to US$5.2 billion.

---

• African Export-Import Bank (Afreximbank), AfriCaribbean Trade and Investment Forum, Kiana Wilburg, New Hayven Merchant Bank, President Dr. Irfaan Ali

---