By Aduragbemi Omiyale
The United Kingdom’s Development Finance Institution and impact investor, CDC Group, has approved a $50 million trade finance facility for Ecobank International (EBI SA), the Paris based member of the Ecobank Group.
The loan would enable the lender to provide further support for African trade, especially at a time the businesses need funds to be able to unlock the several opportunities in the African Continental Free Trade Area (AfCFTA).
But the facility was given to Ecobank to support businesses across the continent, which have been affected by the COVID-19 pandemic.
The global health crisis has had a significant adverse effect on trade flows, business operations and jobs in Africa’s markets. This CDC facility will support the continent’s economic recovery and is expected to generate between $70 million to $140 million in additional trade annually.
The investment will enhance the import of essential goods, commodities and capital equipment, while also helping to expand access to goods and services in general.
“Our partnership with Ecobank presents an opportunity for CDC to provide trade support where it is most needed.
“Keeping trade flowing across the continent is a key objective in CDC’s COVID-19 response, and we are thrilled that our patient capital can support businesses that are at the centre of economic activities in our markets.
“We remain committed to playing our part in closing the trade finance gap in Africa, by helping to facilitate business and job growth, and building resilience for the long term,” the Director, Head of Trade & Supply Chain Finance, CDC Group, Admir Imami, said.
Also speaking, the Ecobank Group Executive Corporate and Investment Banking, Akin Dada, disclosed that, “Our partnership with CDC to enhance finance and capacity comes at a crucial time in Africa’s history with much-needed recovery from the challenges of COVID-19 and the immense trade and investment opportunities being created by the AfCFTA.
“We welcome the opportunity to work with development finance institutions such as CDC to help realise Africa’s potentials and sustainably drive its economic development.”
Also, the acting Managing Director at EBI SA, Jean Erwin NIZET, said, “This partnership with CDC will allow EBI SA to provide further support for African trade.
“In this challenging COVID-19 environment, this represents an important step in increasing Ecobank’s trade capacity and better serve its clients in Africa. This will ensure that Ecobank continues to contribute to the creation of value and sustainable growth across the continent.”
EBI SA, the international subsidiary of Togo-based Ecobank Group, is regarded as an ideal partner to boost CDC’s impact across Africa and help strengthen financial support for local banks and the businesses that they serve.
With the Ecobank Group’s extensive footprint and operations across 33 countries on the continent, the facility will broaden economic opportunities and inclusive growth, particularly in markets such as Togo, Burkina Faso and Chad.
The trade finance risk-sharing facility will meet the liquidity needs of local African banks at a crucial time especially with the economic impact of the pandemic.
By committing capital to address these shortfalls, CDC is taking on additional risk and providing further credit support and trade finance lines to local banks, thus protecting commerce across the continent.
The facility contributes to the UN Sustainable Development Goals Zero Hunger (SDG 2) and Decent Work and Economic Growth (SDG 8).
