BII AND CITI PARTNER FOR $100 MILLION TRADE FINANCE BOOST IN AFRICA
British International Investment (BII), the UK’s development finance institution, and Citi announced a new initiative to support trade finance for businesses in Africa. The partnership will provide a $100 million risk-sharing facility to address the critical shortage of foreign currency in frontier and emerging African economies.
Goals of the Initiative:
- Increase access to finance: Support SMEs and corporates with limited access to traditional financing.
- Improve trade flows: Provide liquidity for imports of key commodities (wheat, fertilizer, rice, sugar) and essential goods for manufacturing (equipment, machinery).
- Boost economic growth: Empower businesses in underserved markets (Benin, Cameroon, Cote d’Ivoire, Rwanda, Tanzania, Uganda, Zambia) to participate in trade and strengthen supply chains.
- Address food security challenges: Facilitate imports of agricultural inputs and machinery.
Why is this important?
- The COVID-19 pandemic and the Russia-Ukraine war have exacerbated trade finance gaps in Africa, hindering imports and economic development.
- The trade finance gap has grown from $81 billion in 2019 to $120 billion in 2023.
How will it work?
- BII’s investment will be used to provide trade finance liquidity to Citi’s network of commercial banks in Africa.
- These banks can then offer financing to local businesses for importing essential goods.
- The initiative leverages BII’s expertise in development finance and Citi’s extensive presence in Africa (since 1920) to reach underserved markets.
Quotes:
- Andrew Mitchell, UK Minister for Development and Africa: Emphasized BII’s commitment to supporting food security efforts.
- Nick O’Donohoe, CEO of BII: Highlighted the importance of the facility in tackling food security and supporting local businesses.
- Stephanie von Friedeburg, Head of DFI Strategic Partnerships at Citi: Underscored the importance of trade finance in driving economic growth in Africa.
Alignment with UN SDGs:
This initiative contributes to achieving the UN Sustainable Development Goals (SDGs) 1 (No Poverty), 2 (Zero Hunger), and 8 (Decent Work and Economic Growth).
Sorce: Techeconomy
