This was contained in a statement titled
‘African Development Bank approves a $50m Multinational Trade Finance Risk
Participation Agreement facility for Standard Chartered Bank’ published on the
bank’s website on Wednesday.
The statement said, “The board of directors of
the African Development Bank Group has approved a $50m Trade Finance Unfunded
Risk Participation Agreement facility between the African Development Bank and
Standard Chartered Bank.”
The essence of this agreement is to promote
intra-Africa trade, ensure regional integration and lessen the trade finance
gap in Africa.
“The agreement is expected to boost
intra-Africa trade, promote regional integration, and contribute to the
reduction of the trade finance gap in Africa, in line with implementation
aspirations of the African Continental Free Trade Area,”
The bank’s Director for Financial Sector
Development, Stefan Nalletamby, stated that “We are excited about finalising
this facility with Standard Chartered Bank as it offers us the flexibility to
use our strong AAA-rated risk-bearing capacity to increase access to trade finance
and boost intra/extra-African trade on the continent, in support of the AfCFTA.
“This partnership is expected to catalyse more
than $600m in value of trade finance transactions across multi-sectors such as
agriculture, manufacturing and energy over the next three years.”
Director-General of the bank’s Southern Africa
region, Leila Mokadem, was quoted to have said, “The advent of COVID-19,
coupled with stringent regulatory/capital requirements and Know Your Customer
compliance enforcement, has seen many global banks reduce their correspondent
banking relationships in Africa, while some are exiting the market altogether.
“There is therefore an urgent need for
financing to reenergise Africa’s trade, which requires more participation of
institutions like the African Development Bank.”
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