Statement by African Export-Import Bank (Afreximbank) on recent Fitch Ratings Report
It is important to note that Fitch acknowledges Afreximbank's financial resilience, highlighting that ' the bank operates with a high level of collateral and credit risk mitigants and has already taken relatively large provisions on some sovereign exposures, which would reduce any potential further negative financial impact for the bank'.
Fitch also acknowledges the Bank's strong capitalization including its ' strong equity to assets and guarantees ratio' and 'excellent internal capital generation'. Concentration risk is also reported as 'low' and its liquidity assessment of 'a' reflects the Bank's ' strong quality of treasury assets '. The Bank believes that these factors reinforce the overall soundness of the Bank's risk management framework.
Fitch's 'negative outlook' decision, which it says reflects ' the risk that the debt owed to Afreximbank by some of its sovereign borrowers may be restructured ', is hinged on the erroneous view, in some quarters, that the treaty establishing Afreximbank, executed by its 53 participating African states, can be violated by the Bank without consequences. For clarity, the Bank establishment agreement is a treaty entered into by, and among, all participating states and between the participating states and the Bank. Accordingly, Afreximbank would like to reaffirm that it is not participating in debt restructuring negotiations related to any of its member countries. To do so would be inconsistent with the Bank establishment treaty. The treatment of its loans and other activities is governed by the treaty and not by classifications created outside its framework.
Afreximbank's financial resilience, robust governance and unwavering commitment to excellence, and to Africa, are critical to the delivery of its mandate. The Bank remains committed to supporting its member countries in navigating their economic challenges while promoting trade-led growth, economic development and general macroeconomic stability.
Distributed by APO Group on behalf of Afreximbank.
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