A $50 million and EUR 50 million dual-currency trade finance line of credit for the ECOWAS Bank for Investment and Development (EBID) has been approved by the Board of Directors of the African Development Bank Group.
The People’s Bank of China (PBOC) will provide an extra $30 million in co-financing for the credit line via the Africa Growing Together Fund (AGTF).
The three-and-a-half-year facility will be used by EBID to offer direct finance to regional corporations. A portion of the facility will also be distributed through a chosen group of local banks for further lending to vital industries like transportation, infrastructure, and agriculture. Small and medium-sized businesses (SMEs), local enterprise cooperatives, and farmers in the West African region will ultimately benefit.
In a press release issued following the Board’s approval, Joseph Ribeiro, the Deputy Director General for the West Africa Region, noted that regional development finance organisations like EBID are important allies of the African Development Bank and target markets and clientele crucial to the continent’s overall development.
Mr. Joseph says the Bank is crucial in encouraging trade and regional integration and that, the Bank is providing EBID with its first funding support, which they expect an even greater partnership in the coming future.
“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.
Lamin Drammeh, the Bank’s Head of Trade Finance, emphasised the urgent need for such assistance in the area.
He says the ECOWAS region is eager to cooperate with EBID to enhance access to trade finance with a special focus on the agriculture value chain, SMEs, and women-owned firms.
“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 said.
The African Development Bank estimates 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.
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