Afreximbank deepens South Africa push with $8bn industrial finance deal

Afreximbank and South Africa’s Industrial Development Corporation (IDC) have signed a three-year partnership to jointly deploy up to $8 billion into industrial and trade projects, marking a major step in the lender’s expanding investment push in Africa’s largest economy.

The Memorandum of Understanding (MoU), signed in Cairo, will see the two institutions jointly originate, finance, and monitor projects aimed at strengthening the country’s industrial base, deepening regional value chains and accelerating trade under the African Continental Free Trade Area (AfCFTA).

The agreement combines Afreximbank’s continental trade finance expertise with the IDC’s local project development and underwriting capabilities to build a pipeline of bankable investments across strategic sectors.

Under the renewable framework, the institutions will establish a preferred financing partnership, prioritising one another on eligible transactions while collaborating on trade finance, project finance, co-financing, advisory services, research, capacity building and staff exchanges.

“This strategic partnership with IDC reinforces the bank’s commitment to advancing Africa’s industrialisation and trade agenda,” said George Elombi, president and chairman of the board of directors of Afreximbank.

“By combining our expertise, resources and networks, Afreximbank and the IDC will unlock new opportunities for financing, investment and capacity building across the continent.”

The financing will target more than 13 priority sectors, including manufacturing, agriculture and agro-processing, mining, renewable energy and infrastructure, aligning closely with South Africa’s industrialisation and mineral beneficiation strategy.

Part of a broader $14bn South Africa investment programme

The latest agreement builds on a rapidly expanding relationship between Afreximbank and South Africa following Pretoria’s accession to the bank’s Establishment Agreement earlier this year as its 54th member state.

That move was initially accompanied by an $8 billion country programme to support industrial development.

The commitment was later expanded. In June, Afreximbank and South Africa’s Department of Trade, Industry and Competition signed a $14 billion Country Programme covering industrial infrastructure, electricity generation and transmission, mineral beneficiation and agro-processing.

The new partnership with the IDC is expected to serve as a key implementation vehicle, translating those broader commitments into commercially viable projects.

Mmakgoshi Lekhethe, CEO of the IDC, said the partnership combines complementary strengths.

“The IDC brings extensive local market knowledge and experience in supporting South African businesses, while Afreximbank provides significant trade finance capabilities, continental reach and access to innovative trade-enabling platforms,” Lekhethe said.

Digital trade platforms to support cross-border commerce

Beyond financing, Afreximbank will deploy several of its digital trade platforms to facilitate cross-border transactions under the partnership.

These include the Pan-African Payment and Settlement System (PAPSS), the MANSA customer due diligence repository and the Africa Trade Gateway, which are designed to reduce the cost and complexity of cross-border payments, compliance and trade documentation.

PAPSS has been adopted by the African Union as the payment and settlement infrastructure supporting the implementation of the AfCFTA. Afreximbank has also established a $10 billion Adjustment Fund to help member states manage the costs of implementing the continental trade agreement.

The partnership comes as South Africa remains the continent’s largest contributor to intra-African trade, accounting for 19.1 percent of Africa’s total trade in 2024. Strengthening industrial production and regional supply chains in the country is expected to have significant spillover effects for trade across the continent.

Founded in 1940, the IDC is South Africa’s state-owned development finance institution focused on industrial growth. The corporation has been under increasing pressure to expand financing for manufacturing and beneficiation projects as weak domestic investment and constrained public finances weigh on economic growth.