By Business AM
The board of directors of the African Development Bank Group (AfDB) have approved a dual-currency trade finance line of credit for ECOWAS Bank for Investment and Development (EBID) comprising $50 million and 50 million euros.
The fundings, according to the African Development Bank, is expected to reduce the annual trade finance gap for Africa, estimated to be around $81 billion.
The EBID,on its part, said the three-and-a-half-year facility would be utilised to provide direct financing to local corporates. Part of the facility will also be channelled through select local banks for on-lending to key sectors such as agriculture, infrastructure, and transport.
It added that the ultimate beneficiaries will be Small and Medium-sized Enterprises (SMEs), local enterprises, cooperatives and farmers in the West Africa region who have greater difficulty in accessing trade finance compared to multinational corporates and large local corporates.
Commenting on the approval, Joseph Ribeiro, the deputy director general for the West Africa region, noted that regional development finance institutions like EBID are key partners of the African Development Bank and serve markets and client segments critical to the overall development of the continent.
“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,” Ribeiro said.
On his part, Lamin Drammeh, the Bank’s head of trade finance,emphasised 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.
He added that regional institutions like EBID complement the AfDB’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.
The African Development Bank further noted that an additional co-financing of $30 million for the credit line is also expected to come through the Africa Growing Together Fund (AGTF) from the People’s Bank of China (PBOC).
