CDC Group, United Kingdom’s development finance institution and impact investor, has announced a US$50 million trade finance facility for Ecobank International (EBI SA), the international subsidiary of Ecobank Group.
This marks CDC’s first partnership with EBISA with the commitment aimed at providing systemic liquidity to underserved markets and crucial trade finance support to local banks and businesses across Africa.
The facility will provide systemic liquidity and support vital supply chains across Africa’s markets, sustains and increase access to goods and services during the COVID-19 pandemic and bolster economic opportunities and inclusive growth in markets such as Togo, Burkina Faso and Chad.
The CDC facility will also support the continent’s economic recovery following the pandemic crisis and is expected to generate between $70 and $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.
CDC said in a statement that EBI SA, which is based in Paris, France, is an ideal partner to boost its impact across Africa and help strengthen financial support for local banks and the businesses that they serve, adding that 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 COVID-19 which has had a significant adverse effect on trade flows, business operations and jobs in Africa’s markets.
CDC said that by committing capital to address these shortfalls, the group is taking on additional risk and providing further credit support and trade finance lines to local banks, thus protecting commerce across the continent.
The Director and Head of Trade & Supply Chain Finance, of CDC Group, Admir Imami said that the partnership with Ecobank presents an opportunity for his organisation to provide trade support where it is most needed, stating that, “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.”
In his remarks, Ecobank Group Executive Corporate and Investment Banking, Akin Dada said that the bank’s partnership with CDC to enhance finance and capacity was coming 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 African Continental Free Trade Area.
He stressed that Ecobank welcomes the opportunity to work with development finance institutions such as CDC to help realise Africa’s potentials and sustainably drive its economic development.
Also commenting, the acting Managing Director of EBI SA, Jean Erwin NIZET, said that the partnership with CDC will allow EBI SA to provide further support for African trade, noting that in the challenging COVID-19 environment, the collaboration represents an important step in increasing Ecobank’s trade capacity and better serve its clients in Africa. This, he explained, will ensure that Ecobank continues to contribute to the creation of value and sustainable growth across the continent.
Established in 1948, as the Colonial Development Corporation, CDC is the UK’s development finance institution and it has been at the forefront of supporting companies that help poor countries grow for the last 70 years.
CDC also helps to solve the big global development challenges by investing patient, flexible capital to support private sector growth and innovation in Africa and South Asia.
The group has investments in over 1,200 businesses in emerging economies with total net assets of £6.5 billion and a portfolio of £4.7 billion.
As a public limited company, its only shareholder is the British Foreign, Commonwealth & Development Office (FCDO) and it is therefore entirely owned by the UK Government, but its unique structure combines the best of private sector skills with a public-spirited mission.
IMAGE CREDIT: cdcgroup.com