Africa Surveyors May-June issue 2023 digital

MARITIME
Afreximbank and UTM Offshore to
develop Floating LNG project in Nigeria
The global rating agency, Fitch Ratings,
on 20 June 2023 affirmed the African
Export-Import Bank’s (Afreximbank)
Long-Term Issuer Default Rating (IDR) at ‘BBB’,
with a Stable Outlook. Fitch also affirmed
Afreximbank’s Short-Term Issuer Default
Rating at ‘F2’ and the Long-Term ratings
on the Bank’s Global Medium Term Note
Programme and Debt Issuances at ‘BBB’.
The rating affirmation is a strong testament
of the Bank’s systemic relevance to Africa and
captures the increasing number of the key
mandates given to the Bank by the African
Union (AU), such as the implementation of the
health response to the COVID-19 pandemic
and the support for access to grains and
fertilizers in the context of the Russia-Ukraine
conflict.
Fitch acknowledged Afreximbank’s strong
capital and liquidity position. In addition to
the ‘excellent’ internal capital generation, the
Bank had raised US$1.4 billion paid-in capital,
as of 2022, out of the planned raise of US$2.6
billion by 2026. The agency noted that
Afreximbank had a strong liquidity profile, as
its share of treasury assets rated ‘AA’ to ‘AAA’
remained above the ‘strong’ threshold of 40
per cent. It added that the Bank’s liquidity
profile was further enhanced by its access to
capital markets and other alternative liquidity
sources even during challenging times.
The Bank has continuously demonstrated its
ability to de-risk its lending portfolio, noted
Fitch. With a low concentration risk, coupled
with a high collateralisation of the loan book,
where 25 per cent of the loan book was cash
collateralised and eight per cent was credit
insured from ‘A’ to ‘AA’ rated insurers, “the
‘moderate’ risk management policies primarily
reflect the use of credit risk mitigants that
have helped maintain a relatively low nonperforming
loan ratio, despite the high-risk
environment that the bank operates in.”
Commenting on the development, Prof.
Benedict Oramah, President and Chairman
of the Board of Directors of Afreximbank,
said that Fitch’s affirmation is a strong
testament to the Bank’s strong developmental
mandate and its increasing countercyclical
role in helping its member countries during
challenging times. The Bank has continued
to contribute and define the path for Africa’s
economic future through the creation of
programmes and initiatives that support the
emergence of integrated and well diversified
African economy that adapts and responds to
global shocks.
“The Bank’s consistent and prudent
response to member countries’ needs
during challenging times and its ability
to manage exposures prudently have led
to its recognition by member countries as
a systemic institution as evidenced by its
accreditation by the AU and its selection
by the AU as a preferred partner in
implementing some AU strategic initiatives,”
noted the President.
Afreximbank and UTM Offshore to develop Floating LNG project in Nigeria
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