Board of Directors of African Development Bank Group has approved a dual-currency Line of Credit Trade Finance for the ECOWAS Bank for Investment and Development (EBID) amounting to $50 million and EUR 50 million. Additional funding of $30 million for the credit line will be provided through the Africa Growing Together Fund (AGTF) of the People’s Bank of China (PBOC).
EBID will use the three-and-a-half-year facility to provide direct financing to local companies. Part of the facility will also be channeled through selected local banks to lend to key sectors such as agriculture, infrastructure, and transportation. The main beneficiaries are Small and Medium Enterprises (SMEs), cooperatives of local companies and farmers in the West African region.
Speaking shortly after the approval of the Council, the Deputy Director General of the West Africa Region, Joseph Ribeiro, noted that regional development financial institutions like EBID are the main partners of the African Development Bank and serve markets and client segments that are critical for the development of the entire continent. .
“They play an important role in promoting trade and regional integration. This is the Bank’s first financing support for EBID, and we look forward to a stronger partnership in the 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 agricultural 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 channel to channel much-needed funds to underserved countries and sectors,” he said.
The African Development Bank estimates the annual trade finance gap for Africa at $81 billion. Compared to multinationals and large local companies, SMEs and other domestic companies find it more difficult to access trade finance.
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