Afrexim Bank partners with Arik to promote intra-African trade

President, African Export-Import Bank (Afreximbank), Benedict Oramah said the firm is collaborating with Nigerian flag carrier airline, Arik to promote intra-Africa trade, saying its partnership with the airline has been mutually rewarding.

Oramah made the disclosure when he led his team to hold a business strategic meeting with the management of the carrier at its headquarters at the Murtala Muhammed Airport, Lagos at the weekend.

Although the Afrexim Bank chief did not disclosed how much it has injected into Arik and how much funding it would give the carrier, there are indications that Arik could be part of some airlines in Africa that would benefit from a substantial funding by the Bank.

Manager, Syndicated and Special Finance Department, Afreximbank, Samuel Mugoya had disclosed in a paper he presented at the 25th Annual Air Finance in Africa summit in Johannesburg, South Africa said over $20 billion has been earmarked as part of syndicated loans to assist the carriers get out of the woods.

Although, Mugoya did not disclose the actual amount his firm intends to bailout Arik, a source said it could be up to $200 million, adding that the Nigerian carrier was in dire need of expanding its operations.

 

His words: “We are working to finance Arik Air’s operations by preparing loans for the airline. Aviation in Africa is still lagging behind. For instance, Arik generates 90 per cent of its revenue in naira, but makes expenses in dollars like buying of aircraft spare parts and maintenance of its fleet. That is a real problem not only for Arik, but other airlines.

Deputy Managing Director, Arik Air, Capt. Ado Sanusi, (left) explaining some point to President & Chairman, Afrexim Bank, Cairo, Egypt, Dr. Okey Oramah, (3^rd left)and Head, Specialized Markets & Capital Market Origination, Corporate Banking Group, Union Bank Nig. Plc, Mr. Olusola Olubi behind them is Chairman, Arik Air, Sir. Joseph Arumemi-Johnson (2^nd left) during a working visit to Arik Air by Board of Directors of AfiximBank at the company’s Headquarters, Murtala Mohammed, Airport, Ikeja, Lagos at the weekend.

 

“On aviation infrastructure, Africa needs to improve in order to compete with big airlines. From my interactions with airline operators in Nigeria, they complain of the quality of runway of most of the airports.”

 

He further disclosed that out of the 54 countries in Africa, only three, South Africa, Botswana and Mauritius, are investment rated, describing others, including Nigeria, Egypt and others as “junk rated.”

 

Speaking to New Telegraph, the Afrexim Bank President said Arik is a long standing client of Afrexim Bank, adding that they were in Lagos to see their client.

 

He explained that they have been working with Arik for many years, describing the relation as mutually rewarding partnership.

 

“We have helped the company to acquire some of the aircraft they have and Arik have lived up to our expectations. We are here to see what they are doing and listen to them about their future plans because we are promoting intra-African trade.”

 

“We see Arik as strategic partner in promoting intra-African trade because of the role they are playing in connecting people across Africa and making sure goods are delivered across Africa.”

Chairman of Arik Air, Sir Joseph Arumemi-Ikhide said the team visited them, reviewed their operations vis a vis the plans that they gave them.

He stated that the airlines has many major financial support from reputable institutions, adding that his management gave the Afrexim Bank team summary of the progress the carrier has made in the past seven years.