The African Export-Import Bank has signed a deal with Uganda, which will see the pan-continental investment lender open its East African branch office in Kampala.
The deal was signed by President Yoweri Museveni and Benedict Oramah, Afrexim’s president. The branch in Kampala will be the bank’s fifth after Cairo, Abuja, Abidjan and Harare.The
The agreement also guarantees Afrexim and its senior officials diplomatic immunity in dealings in Uganda.
Prof Oramah said the establishment of an East Africa branch would deepen the bank’s involvement with the region’s institutions.
The Kampala branch will be open for business at the end of October and will serve 11 countries: Kenya, Uganda, Sudan, Eritrea, Djibouti, Ethiopia, South Sudan, Tanzania, Rwanda, Burundi and Comoros.
Afrexim is in talks to get Uganda’s National Social Security Fund. The plan, according to Kudakwashe Matereke Afrexim East Africa chief operating officer, is to have NSSF join others in the region like Rwanda’s social security board to become one of the lender’s institutional investors.
The Pan African lender, which has different classes of shareholders—including African ministries of finance and central banks—is looking to expand both its portfolio and relations with the region by recruiting more institutions.
“Among the things we are considering is due diligence on whether we can invest money in this institution,” said Richard Byarugaba, the NSSF managing director.
If such an investment is approved by the Uganda Retirement Benefits Regulatory Authority (URBRA), it would provide a window for NSSF to invest some of its $3 billion asset base in ventures outside East Africa.
Currently, Ugandan laws do not allow NSSF to invest money in institutions domiciled outside of East Africa. While this has sometimes created challenges that make it hard for NSSF to diversify its investment portfolio, URBRA chief executive officer Martin Nsubuga said the law protects savers’ money.
Mr Nsubuga said that for URBRA to allow such an investment, the Pan African lender would have to register its Uganda branch.
Afrexim seems to be an attractive venture for the bond markets. Former Nigerian President Olusegun Obasanjo, who is a common speaker at the bank’s events, reported that a recent foray into international bond markets raised $3.9 billion instead of the $500 million that had been sought.
In East Africa, Afrexim’s investment portfolio includes a $2 billion loan to Kenya Airways, an undisclosed amount loaned to Tanzania for the construction of the standard gauge railway and $155 million to Rwanda for the construction of the Kigali Convention Centre and the Radisson Blu Hotel.