Afreximbank’s Evolving Strategy: From Trade Finance to Value‑Chain Integration
For more than three decades, the African Export‑Import Bank (Afreximbank) has acted as a financier of last resort for intra‑African trade. Speaking at a mid‑year media roundtable held at the bank’s African Trade Center in Abuja, President George Elombi outlined a broader vision: leverage the institution’s balance sheet to move Africa up the mineral‑processing value chain, strengthen a continental payments system, and develop home‑grown medical research capacity.
Bet on batteries and bytes
Elombi traced recent investments in the electric‑mobility startup Spiro and the telecom‑infrastructure group Liquid Telecom to a delegation trip to Shanghai, where Afreximbank officials toured China’s battery and electric‑vehicle supply chains.
What stood out, he said, was not the sheer scale of Chinese manufacturing but the architecture of the batteries themselves—hundreds of small cylindrical cells rather than a single monolithic block. This observation reinforced his concern that Africa could repeat a familiar pattern: exporting raw lithium while importing finished batteries.
“We are no longer interested in anyone who wants to mine raw lithium and export it,” Elombi told African Business. “We just want people to mine and process at home.”
Consequently, the bank now reserves minerals‑sector financing for projects that secure local processing concessions, not pure extraction activities. The Spiro investment, he explained, serves a dual purpose: it builds technical expertise in a fast‑growing but underserved mobility sector while also positioning Afreximbank to capture commercial returns as the market matures.
The same logic applies to data‑center infrastructure. Elombi described data centers as essential national assets that Africa cannot continue to source exclusively from abroad, arguing that local capacity will reduce latency, improve data sovereignty, and spur innovation across fintech, e‑health, and agritech.
PAPSS: slow build, big ambition
The Pan‑African Payment and Settlement System (PAPSS) was a focal point of the discussion. Launched in 2022 with Afreximbank’s backing, PAPSS aims to create a real‑time, cross‑border payments rail that settles transactions in African currencies.
Elombi, who helped shape the platform during his tenure overseeing the bank’s legal and governance functions, admitted that the rollout proceeded more slowly than anticipated. Initial hesitation from central banks stemmed from fears that PAPSS might encroach on their regulatory authority.
As of mid‑2024, PAPSS connects more than 190 commercial banks and fintechs across 28 African countries (PAPSS website). Afreximbank maintains correspondent relationships with roughly
The bank deliberately chose to pilot PAPSS in West Africa, citing the region’s existing currency integration through the West African Monetary Union (WAMU) and a relatively homogenous currency mix. Elombi acknowledged that this decision sparked suspicions elsewhere on the continent that the initiative was being “hijacked” by West African interests. To address the perception, Afreximbank invited governors from other regions to join PAPSS’s oversight committee, a move that gradually improved adoption in East, Southern, and Central Africa. One of the most cited use‑cases for PAPSS is its currency‑swap functionality, which allows businesses to offset local‑currency holdings without routing through third‑party currencies. For example, an airline can settle a Nigerian‑Naira obligation using Ethiopian Birr via a PAPSS‑mediated swap, reducing pressure on Nigeria’s foreign‑exchange market. A PAPSS‑branded multi‑currency card—designed to let users spend across the network in their preferred currency without holding foreign cash—is currently in development; the issuing entity has only recently begun recruiting staff. When questioned about competition from cryptocurrencies and stablecoins—particularly in Nigeria, which Chainalysis identified as having one of the world’s highest rates of stablecoin adoption for cross‑border payments—Elombi adopted a measured stance. He noted that stablecoins backed by verifiable, real‑world assets can engender genuine trust, whereas those lacking such collateral risk a loss of confidence once regulators scrutinize their reserves. Nonetheless, his broader bet rests on the belief that African currencies will not remain fragmented indefinitely. “If we can deepen intra‑African trade and improve the efficiency of our payments infrastructure, the need for alternative settlement mechanisms will diminish,” Elombi said. He pointed to ongoing efforts to harmonize regulatory frameworks, expand the PAPSS network, and promote the use of local currencies in trade invoicing as pathways to reduce reliance on external digital assets. Afreximbank’s current agenda reflects a shift from pure trade finance to active participation in Africa’s industrial and digital transformation. By tying financing to local processing, nurturing home‑grown payments rails like PAPSS, and supporting strategic sectors such as electric mobility and data infrastructure, the bank aims to help the continent capture more value from its natural resources and technological talent. Success will depend on sustained collaboration with governments, central banks, and private‑sector partners, as well as transparent communication to alleviate concerns about regional bias or regulatory overreach. If these elements align, Afreximbank’s balance sheet could become a catalyst for a more integrated, self‑sufficient African economy.Can PAPSS overtake stablecoins?
Looking Ahead
