South Africa is getting closer to becoming a full member of Africa’s largest trade bank

The government announced Thursday that the cabinet’s approval of the plan brought South Africa one step closer to becoming a full sovereign member of the Africa Export-Import Bank, the continent’s top trade credit source.

The most developed economy in Africa would have access to new trade investment products if it joined Afreximbank, a lender with a $35 billion balance sheet, at a time when its demand for new export markets has intensified due to its tariff dispute with the United States.

But in recent months, Afreximbank has been embroiled in a controversy over whether or not its loans to African countries need to be restructured in the event that they default.

The government claimed to receive a class A ownership, which would give it more influence over Afreximbank’s management.

“Influence over its strategic direction, structure and leadership appointments,” it stated in a statement that included cabinet conclusions.

No timeline for the finalization of South Africa’s membership was provided by the government.

Since apartheid was still in effect when Afreximbank was established in 1993, South Africa was unable to fully join as a state member.

Without signing the treaty that established the bank, it acquired an undisclosed number of shares in 2017.

Class A shareholders comprise 53 member states and regional multilateral financial organizations, such as the African Development Bank, and hold over 50% of Afreximbank’s shares.

Commercial banks and private funds, foreign investors, and ordinary investors own the remaining shares through depositary receipts that are listed on the Mauritius Stock Exchange.

A request for comment on South Africa’s cabinet decision was not immediately answered by the Cairo-based Afreximbank.