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The Board of Directors of the African Development Bank Group (AfDB) has approved a dual-currency Trade Finance Line of Credit for ECOWAS Bank for Investment and Development (EBID) comprising $50 million and €50 million.
In a statement yesterday, the AfBD stated that an additional co-financing of $30 million for the credit line would come through the Africa Growing Together Fund (AGTF) from the People’s Bank of China (PBOC).
EBID would use the three-and-a-half-year facility to provide direct financing to local corporates, it stated.
According to the AfDB, part of the facility would also be channelled through select local banks for on-lending to key sectors such as agriculture, infrastructure, and transport.
They play an important role in promoting trade and regional integration. This is the Bank’s first financing support to EBID, and we look forward to an even stronger partnership in the near future,” he said.
The Bank’s Head of Trade Finance, Lamin Drammeh, stressed the critical need for such support in the region.
“We are excited to work with EBID to increase access to trade finance in the ECOWAS region with a special focus on the agriculture value chain, SMEs and women-owned businesses”, he said.
“Regional institutions like EBID complement the Bank’s efforts to bridge the trade finance gap in Africa and serve as an effective conduit for channeling much-needed funds to underserved countries and sectors”, he added.
The AfDB estimated the annual trade finance gap for Africa to be around $81 billion.
“Compared to multinational corporates and large local corporates, SMEs and other domestic firms have greater difficulty in accessing trade finance,” it added.
Meanwhile, the AfDB and the Government of Canada have established a new special fund to support Africa’s small and medium-sized enterprises (SMEs) in the agriculture sector.
The Agri-food SME Catalytic Financing Mechanism aims to catalyse and de-risk investment for agriculture SMEs, as well as strengthen agricultural value chains and improve food security across the continent.
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