A new Covid-19 recovery fund worth $1.5 billion has been set up to assist African countries in their recovery journey from Covid-19 effects.

Dubbed Collaborative Covid-19 Pandemic Response Facility (COPREFA), the fund was launched on Wednesday, November 4 by Afreximbank, the International Islamic Trade Finance Corporation (ITFC), and the Arab Bank for Economic Development in Africa (BADEA).

It aims at supporting African economies to overcome challenges, including commodity price shocks, a significant drop in tourism, and disruption to supply chains and export manufacturing.

In addition, it will also address the sudden decline in financial flows, including a drop-off in trade and project finance, migrant remittances, portfolio investment, and foreign direct investments.

The fund will be accessed by eligible central banks, commercial banks, and businesses to finance the import of medical supplies, as well as agricultural equipment and fertilizers essential for addressing the pressing food production deficit.

"The Covid-19 pandemic has devastated many economies. Africa has not been spared. Afreximbank’s priority has always been to step-up when markets fall. That is why we are supporting African economies forcefully at the time of great difficulties.

"COPREFA, a product of a unique international partnership, is a major contribution to the global fight against the pandemic and will work alongside our other programs to ensure Africa’s future remains bright beyond this economic shock. We thank our partners for the confidence,” said Professor Benedict Oramah, the President of Afreximbank.

The facility is expected to deliver financial assistance speedily, and support will be available through direct funding, lines of credit, confirmation and refinancing of documentary credits; guarantees, cross-currency swaps, and other similar instruments.

Hani Salem Sonbol, the CEO of ITFC, one of the co-financers of the facility, said that providing fiscal bandwidth and practical support to SMEs and medical communities in African countries will deliver immediate relief from the supply side restraints on personal protective equipment caused by the pandemic.

"ITFC has worked extensively since the very start of the COVID-19 outbreak to provide comprehensive support to some of the most vulnerable countries. The multilateral arrangement that ITFC is embarking upon with our strategic partners will boost economic activity when and where it is needed most and help many countries maintain food security at a time when global commodity supply chains are being challenged and import activity sharply reduce,” he said.