South Africa is now one step closer to becoming a full sovereign member of the African Export-Import Bank (Afreximbank), the continent’s leading trade finance institution, after its cabinet approved the plan, the government announced on Thursday.
Full membership in Afreximbank, which has a $35 billion balance sheet, would give Africa’s most industrialised economy greater access to trade and investment products, according to Reuters.
The development comes as South Africa looks for alternative export markets amid rising tariff tensions with the United States.
Afreximbank has recently been the focus of debate over whether its loans to African countries should be restructured in cases of sovereign defaults.
Still, Pretoria’s decision to pursue full membership marks a strategic step toward deeper continental financial integration.
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The government stated that it plans to secure a Class A shareholding, which would give South Africa a stronger voice in the bank’s governance, including influence over its strategic direction, organisational structure, and leadership appointments.
No date has yet been set for when the membership process will be completed.
South Africa was unable to join Afreximbank as a founding sovereign member when the institution was created in 1993 due to its international isolation under apartheid.
It later acquired an unspecified stake in 2017 but did not formally accede to the treaty that established the bank. Afreximbank’s shareholding structure has four categories.
Class A includes African governments and regional financial institutions such as the African Development Bank, collectively holding over 50% of shares across 53 member states.
The remaining shares are split between Class B shareholders, including commercial banks and private equity funds, and Class C investors, made up of foreign entities and individuals holding depositary receipts listed on the Stock Exchange of Mauritius.
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Image Credit: Business Insider Africa
