Malawian Bank Secures US$100mn Trade Finance Credit Line From Afreximbank

By Joseph Dumbula

The National Bank of Malawi (NBM) has signed a US$100mn trade finance facility with the African Export-Import Bank (Afreximbank) in a deal partly designed to help overcome a shortage of confirming banks.

The facility is Afreximbank’s largest trade facilitation deal in the country to date, and will be used by NBM to finance trade in the manufacturing, energy and agriculture sectors, Afreximbank says.

It is part of Afreximbank’s trade facilitation programme (Aftraf), which is “designed to counter the recurring trend of reduction or withdrawal of trade lines to African financial institutions”.

Many large international lenders have axed or curtailed trade lines to banks in Sub-Saharan African countries in recent years as they seek to trim exposure to countries perceived as having high credit risk.

The facility also allows NBM to issue letters of credit confirmed by Afreximbank, supporting the import of critical goods into the country, including fuel, fertiliser and pharmaceuticals, by “addressing the difficulty posed by a shortage of confirming bank lines”.

“Our support to NBM through the Aftraf programme will have a significant impact on Malawi’s strategic sectors including manufacturing, agriculture and energy, by empowering them to import inputs and components to generate value-added exports,” says Afreximbank executive vice-president Haytham ElMaayergi.

NBM CEO Harold Jiya says: “This partnership will allow us to provide more financing solutions, especially for businesses engaged in international trade. As a bank, we are committed to making international trade easier and more affordable for our customers.

“The Afreximbank credit line will help reduce the risks and costs associated with cross-border transactions, giving businesses of all sizes – from large corporations to small enterprises – access to the tools they need to thrive.”

Malawi has suffered from high inflation throughout the 2020s, averaging 27.9% in 2024 so far. Structural issues led Malawi to seek an IMF-led debt restructuring last year, which prevented the country from defaulting but forced a 30% devaluation of its currency against the dollar, making it one of the weakest in the world.

The Afreximbank facility is equivalent to around 1% of the country’s US$11bn GDP.

Afreximbank signed a similar agreement with a major Zimbabwean lender in June.