The African Export-Import Bank (Afreximbank) hopes to raise $8 billion to offset revenue losses some countries will face due to the free trade agreement on the continent.

"We expect to mobilize $8 billion that is in addition to the $1 billion already made available to leverage financing from other multilateral development institutions, export credit agencies, commercial banks and donors," the bank said in response to questions from the Bloomberg financial information agency.

The aim is to compensate countries that encourage intra-regional trade by lowering tariffs, which will have an impact on budget revenue, which becomes particularly important in a pandemic context, where public finances in most African countries are overstretched.

The largest free trade agreement aims to increase trade in the region by lowering or eliminating customs tariffs on 90% goods, facilitating the movement of people and capital, promoting investment, and laying the foundation for a customs union.

Trade on the continent is worth $350 billion annually, and is expected to grow 50% over the next decade, according to forecasts by the African Trade Policy Centre, which operates at the United Nations Economic Commission for Africa. The African Continental Free Trade Area came into force on January 1, and the relevant agreement was signed in 2018 by 54 of the 55 African Union (AU) nations.