Afreximbank’s Benedict Oramah – ‘The ratings agencies looked down on us’

By Joël Té-Léssia Assoko, special correspondent in Bridgetown, Barbados
Posted on Friday, 16 September 2022 11:32, updated on Saturday, 17 September 2022 09:46

Afreximbank President Benedict Okey Oramah
Afreximbank President Benedict Okey Oramah (photo: Afreximbank)

The head of Afreximbank Benedict Oramah has revolutionised the pan-African institution, serving up an ambitious vision of the continent's future. With the African Continental Free Trade Area (AfCFTA), the committed pan-Africanist he has found a new engine for his group.

One day earlier, Barbadian Prime Minister Mia Mottley had proclaimed him an “icon and hero” for his “vision” and leadership in organising the first Africa-Caribbean Trade and Investment Forum (#Actif2022) in Bridgetown, 1-3 September 2022.

In the garden of Ilaro Court, her official residence, Barbados’ head of government – who in November 2021 kicked Elizabeth II and the Windsors out of the island’s constitutional order by making it a republic – declared Afreximbank president Benedict Oramah  “a citizen of the Caribbean community”. He gave us this interview in a refined room at the majestic Sandy Lane Hotel, a stone’s throw from the One Sandy Lane complex, where the singer Rihanna resides when she visits Barbados.

The setting seems well suited for the executive retreat of a bank that in 2021 distributed $113m in dividends to its shareholders, a figure that represents only 30% of its profits. But the young sexagenarian who greets us in light-coloured trousers, a white shirt and a grey-brown jacket without a tie seems less interested in such mundanities than in recounting the battle he had to wage with the rating agencies to obtain a proper assessment of the African Export-Import Bank’s (Afreximbank) credit risk. “These agencies have a habit of looking down on Africans. We told them that, firstly, we don’t pay them $100,000 a year to patronise us. And secondly, that their methodology was not the right one,” he explains with a laugh.

His slightly hesitant, irregular tone and his soft voice can be deceptive: Oramah is dead serious. Through constant discussion and the implementation of a hyper-complex “Capital Protection Credit”, the bank has achieved an “investment grade” rating from four international agencies, including Moody’s and Fitch Ratings, to finance itself at reasonable cost and fuel its remarkable growth.

Between 2016 and 2021, Afreximbank disbursed more than $51bn. Since 2015, the annual dividend paid to shareholders has increased fourfold. But the disparity in Afreximbank’s ratings dismays its boss, who sees it as proof that these agencies “do not know our bank”. A weakness that cannot be blamed on Oramah, who has spent most of his career there.

The boss’ son

Benedict Okechukwu (“Okey”) Oramah was born in July 1961 into a family of elders from Nnokwa, in Igbo country, south-eastern Nigeria. His father ‘Chief’ Lazarus A. Oramah was a member of the local traditional chieftaincy.

His elder brother, Chika, after years in the Nigerian diplomatic service, holds various administrative positions in the private sector. The youngest sibling, Chief Patrick (‘Pat’) Ifeanyi, holds the traditional Igbo title of Ozo, and has activities in real estate, downstream oil and football. A sister, Chinwe, completes the quartet. In the early 1980s, Oramah continued his studies in south-western Yoruba, first at the University of Ibadan, where he obtained a bachelor’s degree in agricultural economics, before moving on to Obafemi Awolowo University, Ife-Ife – where Ade Ayeyemi (future CEO of Ecobank) and Akinwumi Adesina (president of the AfDB) were studying at the time. There he obtained a master’s degree followed by a doctorate in the same field.

The young PhD was recruited a year after his thesis by the Nigerian Export-Import Bank (NEXIM), which he joined in 1992. Two years later, his first mentor, Christopher Edordu, who had been poached from NEXIM management by the directors of the newly created Afreximbank, took him along to Cairo, where Oramah was entrusted with supervision of analyses. In late 2008, he was promoted to executive vice-president. In this position, he oversaw project finance, syndicated loans and investment banking under Ivorian Jean-Louis Ekra (president between 2005 and 2015). It would be difficult to imagine a better preparation for the presidency, which he took over in September 2015.

In the meantime, “Dr. Oramah” and his wife, Chinelo, have raised three daughters: Adaora, a communications graduate from New York University and the London School of Economics, who is now the head of the cultural platform Amaka Studio; Barbara, who holds a master’s degree in engineering from Cornell University in the US and is now a technology analyst at Accenture; and Isioma, who is studying film in the UK and US.

The ‘African’ generation’s dismay

The questions that Oramah is obsessed with these days are those belonging to a certain age group, the “African generation” as he calls them, who came into the world between 1957 and 1965 “with great hope but have been unable to meet the aspirations of their fathers”. Oramah formulates his questions with a touch of irritation and absent of defeatism: why is it, he wonders, that African trade “which represented nearly 120% of Asia’s in the 1970s, now represents only 9%”?

Why are Africans so full of “drive, ambition, energy, entrepreneurship and a rich history of achievements and contributions to humanity” now described as “miserable people” or “hopeless cases”?

Low levels of intra-African trade are holding back the continent’s emergence as a significant and sustainable global economic power

The man asking these questions is, by his own admission, a globetrotter who dreams of learning French and visiting the Persian Gulf. Despite three decades in Egypt, his predilections are for the food of his childhood and sky blue is his favourite colour, while his role models remain St. Lucian Nobel Prize-winning economist W. Arthur Lewis and the Senegalese-Guinean financier Babacar Ndiaye, fifth president of the AfDB (1985-1995) and founder of Afreximbank. His only trace of vanity appears to be his attachment to the title of professor awarded in July 2018 by Adeleke University in Nigeria.

Few of Oramah’s peers quote with such regularity and obvious familiarity the tutelary figures of pan-Africanism: Jamaican theorist Marcus Garvey, Martinican essayist Frantz Fanon, the father of Ghanaian independence Kwame Nkrumah.

And few personalities in the African economic world denounce with such vehemence – and the appropriate expertise – the depredations of the European powers and their consequences on the deepest structures of the continent’s economies. “The genesis of Africa’s decline can be traced back to the 1500s, when Africa started trading very actively with Europe,” the Afreximbank boss reminds us. According to him, the post-independence process of unravelling this centuries-old pattern was abruptly interrupted in the 1970s and 80s by the commodity price crisis. “I have come to the conclusion that very low levels of intra-African trade are holding back Africa’s emergence as a significant and sustainable global economic power,” says the man who is still surprised that “South Africa imports leather from India at twice the price at which Ethiopia exports this input to the world”.

Amazing inventiveness

Fixing this mistake is the main task he has been working on, with energy and inventiveness, for the past seven years. For analysts at Fitch Ratings, Afreximbank is now “the leading multilateral development bank supporting the public and private sectors on the African continent”.

By late 2021, it had provided 228 trade finance lines totalling $5.3 billion. Under Oramah’s leadership, the bank stepped up to the plate during the Covid-19 crisis, creating a procurement platform for health equipment and vaccines, as well as a dedicated line of financing. In response to the conflict in Ukraine, it provided credit for the procurement of fertilisers. Its biennial Intra-African Trade Fair (ITF) has seen $36 billion worth of trade transactions signed in 2021. Afreximbank also launched the Pan African Payment and Settlement System (PAPSS) in January 2022, enabling instant cross-border payments in local currencies, which is expected to reduce the cost of transactions on the continent by “$5 billion a year”.

Africans everywhere are a rich reservoir of resources and wealth

In total, Afreximbank is currently leading no less than ten initiatives and structures related to the operationalisation of the African Continental Free Trade Area, promoted in partnership with the AfCFTA Secretariat and the African Union. The latter plans to grant Afreximbank the status of an African Union trade agency in February 2023. “Afreximbank will contribute to the establishment of African financial institutions, including an African Central Bank, a continental stock exchange, the African Investment Bank and the African Monetary Fund,” Albert Muchanga, AU Commissioner for Trade, told us.

For Oramah, all these activities stem from the bank’s mandate, which is to facilitate trade between Africans, whether they are on the continent or in the diaspora. Hence his proposal in Bridgetown to welcome the Caribbean countries into the bank’s capital and eventually to open a Caribbean Export-Import Bank, a subsidiary dedicated to promoting and financing trade between both sides of the Atlantic.

“We sincerely believe that Africans everywhere constitute a rich reservoir of resources and wealth. It is by promoting increased trade and investment between us that we can hope to leverage this asset for our collective prosperity. It has been tried and tested by [diaspora communities among] Jews, Indians and Irish; it will work for Africans too,” Oramah said during the Barbados forum, prompting a round of applause.

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