Nigeria to benefit from $4 billion UKAFPA for fuel import, food sufficiency

The African Export-Import Bank (Afreximbank) has concluded strategies to aid Nigeria in fuel importation and food sufficiency as there are ongoing dialogues to assist the country from the $4 billion Ukraine Crisis Adjustment Trade Financing Programme for Africa (UKAFPA) launched last month.

The move by the financial institution is expected to help mitigate the impact of the food and fuel crises in Nigeria due to the Russia-Ukraine war.

This disclosure was made by the President/Chairman of Afrexinbank, Professor Benedict Oramah, at a virtual news conference on the US$4 billion UKAFPA, which was launched on April 6, 2022.

The UKAFPA is a programme of credit facilities that the bank had developed to manage the impacts of the Ukraine crisis on African economies and businesses. It was launched as a programmed response to an urgent call for emergency intervention by member states of the bank.

UKAFPA-compliant financing requests received from across Africa already exceed US$15 billion.

What the President/Chairman of Afreximbank is asserting

Oramah said, the bank was also expanding its support to Nigeria in the areas of fuel importation, in addition to other provisions made earlier by the bank.

He said: “Nigeria is an African Union and Afreximbank member and should be able to access the facility as a member country.

“We supported fuel import and we are expanding that because there are urgent needs. There are discussions currently going on with regards to food also. We are supporting Nigeria.

“We are living in an unprecedented time. For two years, the world has been going through major challenges. The Covid-19 pandemic, which became a global challenge and crisis in the first quarter of 2020, is still raging.

“Again, early this year, the Ukraine crisis set in. The crisis was magnified by sanctions that had been placed and the fact that the war affects Ukraine in many other ways.”

Africa is dependent on wheat, fertilizer import from Russia, Ukraine

Oramah pointed out that Russia and Ukraine were the breadbaskets of the world, producing most of the world’s wheat, corn, cornflour, and several food items.

The Afreximbank boss said, ”The same thing applies to agro-chemical items, especially fertiliser. Africa is very dependent on all these. Many countries in Africa import most of their wheat and fertiliser from Russia and Ukraine.

“Tourism arrivals from Russia and Ukraine support economies of many African countries. So, with the war and the sanctions that followed, all of a sudden, all these became threatened.

“So, the effect has been rising food prices and challenging economic situation. And there is an indication that if this continues, the continent might run back into recession.”

He pointed out that the UKAFPA-compliant financing requests received from across Africa could reduce the risk of political crises and other social upheavals.

He noted that with the $4 billion already earmarked for the programme, the bank expects to generate up to 16 billion dollars, leveraging partnerships and other intervention structures.

What you need to know

●         The African continent, including Nigeria, has been vulnerable to food and energy crises since the outbreak of the war between Russia and Ukraine.

●         The International Monetary Fund (IMF) had in March, said Nigeria and other African countries are vulnerable to higher food and fuel prices, low tourism revenues, and difficulty accessing the international capital market as a result of the war going on in Ukraine.