South Africa’s recent accession to the African Export-Import Bank (Afreximbank) Establishment Treaty as its 54th sovereign member could not have come at a more opportune moment.
According to the UN Conference on Trade & Development the global economy is wobbling at an average growth rate of 2.8%, well below the pre-pandemic average of 3.2%. Climate shocks are no longer future risks, they’re here with us. Trade routes are shifting amid geopolitical flux. Alliances are reshuffling and the old certainties are fading fast.
This turbulence presents Africa the long-awaited opportunity to expeditiously deepen regional integration. Through the African Continental Free Trade Area, the continent is financing infrastructure that connects markets and investing in the kind of resilience that cushions its economies against global shocks. By relying on its sizeable youthful market of 1.4-billion people, Africa is building its preferred destination as a source of raw material and for manufactured goods.
South Africa’s accession unlocks broad continental coverage by Afreximbank while placing one of Africa’s leading economies, responsible for nearly 19.1% of the continent’s total trade in 2024, at the strategic core of transforming Africa’s trade architecture. South Africa’s membership influences economies beyond the Southern African region, extending into East, West and North Africa.
The multilateral bank’s headline commitment of $11bn not only aligns with South Africa’s National Development Plan 2030 but reiterates the nation’s commitment to enhancing African industrial development. This includes a $8bn country programme focused on energy, mineral processing and infrastructure and a $3bn inclusive financing programme aimed at supporting SMEs and economic transformation, all critical areas for South Africa’s growth.
Together these interventions aim to ensure reliable power, efficient logistics and fully operational industrial value chains capable of unlocking South Africa’s beneficiation and manufacturing potential
Building on successful initiatives over the years, South Africa will invest heavily in mineral processing, automotive manufacturing expansion and industrial parks/special economic zones to retain value, create jobs and boost government revenue. At a time when critical minerals demand is exploding globally, surging nearly 30% in 2024 alone, South Africa — which accounts for about 40% of mining sales, 59% of global production share and has vast platinum group metal reserves — is uniquely positioned to innovate, expand industries and order global trade and diplomacy.
Instead of exporting raw minerals such as iron ore and importing finished goods such as batteries at a premium, South Africa will be in a position to process, refine and manufacture more at home, capturing greater value locally. By processing and manufacturing locally, the country enhances its ability to access international trade frameworks such as America’s African Growth and Opportunity Act (Agoa) to expand markets for its products while maintaining Africa’s economic agency.
In addition, South Africa will invest more in critical infrastructure, especially energy generation and transmission. This builds on existing momentum, including strategic support to backbone infrastructure such as R2.36bn to Eskom to sustain power supply and $165m towards a $500m Transnet facility to strengthen logistics capacity, ensuring energy and transport constraints no longer bottleneck industrial expansion.
Afreximbank has also supported industrial value addition through initiatives such as a $3.5m project preparation facility, which advanced feasibility studies for an $849m titanium dioxide pigment plant at the Richards Bay Industrial Development Zone with a planned capacity of 80,000 metric tonnes per annum.
Together these interventions aim to ensure reliable power, efficient logistics and fully operational industrial value chains capable of unlocking South Africa’s beneficiation and manufacturing potential.
Last year Afreximbank and the South African government, acting through Infrastructure South Africa within the national department of public works & infrastructure, signed a $20m joint project preparation facility framework agreement which is expected to unlock up to $750m of high-quality, bankable projects across several critical sectors, including energy, transport & logistics and digital infrastructure.
The aim is to empower marginalised economic groups, foster inclusive growth and align with the AU’s Agenda 2063 for equitable industrialisation
For the private sector, which drives more than 70% of all jobs in South Africa, the partnership aims to drive more private sector-led transformation by forging strategic partnerships with some of the leading existing financial institutions. These collaborations will leverage private capital and expertise to catalyse reforms, unlock large-scale investments and foster a resilient, inclusive economy.
In addition, there are deliberate efforts to strengthen domestic institutional capacity, particularly in transforming South Africa’s Export Credit Insurance Corporation (ECIC) into a full-fledged Eximbank. The ECIC will be capable of underwriting industrial development, economic diversification and export growth, empowering it to lead national economic programmes. Afreximbank also launched a $1bn South Africa-Africa Trade & Investment Promotion Programme, a joint programme with the ECIC aimed at promoting and expanding trade and investment between South Africa and other African countries.
This joint programme enabled the completion of the $297m Zimborders project and supported the participation of South African banks in the $24bn Mozambique liquefied natural gas project in Mozambique. Given the success of this initiative, Afreximbank is considering increasing the programme to $3bn.
The $3bn inclusive financing package targets SMEs, which drive 19% to 34% of GDP and 60% of formal employment. The programme will deliver tailored trade finance for exporters, working capital for processors and technology upgrades to scale suppliers. This amplifies Afreximbank’s track record of more than 296,000 SMEs registered, more than 155,000 jobs created, and 6,500-plus businesses trained since 2023, with 69% youth-led and 78% women-led enterprises prioritised. The aim is to empower marginalised economic groups, foster inclusive growth and align with the AU’s Agenda 2063 for equitable industrialisation.
South Africa strengthens Afreximbank’s footprint in one of the continent’s most sophisticated financial and industrial markets. It anchors Southern Africa more firmly within the continental trade architecture and aligns with the bank’s core mandate of facilitating and expanding intra-African and extra-African trade while accelerating industrialisation.
This partnership enhances South Africa’s ability to support exporters, industrial projects and regional value chains while advancing development across the continent.
• Masina, an ANC MP, chairs the parliamentary portfolio committee on trade, industry & competition.
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