The International Finance Corporation (IFC) has issued a guarantee to trade finance products issued by Banco de Fomento Angola, which aims to support the steady supply of essential imports into the country.
The guarantee will cover the Luanda-based bank’s issuance of letters of credit, trade-related promissory notes and bills of exchange and standby instruments, said the IFC, which acts as the World Bank’s development finance arm.
Angola imports more than half of its food, as well as a significant share of agricultural and manufacturing inputs, but limited access to foreign currency and a scaling back of correspondent banking relationships have made it more difficult for businesses to source goods and fulfil orders, the IFC said.
The facility has been designed to help Banco do Fomento Angola (BFA) “grow its trade portfolio, broaden its network of counterparties, and expand access to trade finance for Angolan firms across sectors, including agribusiness, manufacturing and essential goods”, it said.
The deal forms part of the World Bank Group’s efforts to increase access to finance in Angola’s private sector and encourage growth, while also addressing the continent’s trade finance gap, estimated by the African Development Bank to stand at at least US$100bn per year.
Of the US$12bn in guarantees extended by the IFC in the last fiscal year, a third was allocated to Africa. The BFA facility is provided under its Global Trade Finance Program.
Luís Roberto Gonçalves, chief executive of BFA, said the bank will now “have more instruments at its disposal to finance small and medium-sized enterprises in productive sectors of the economy, boosting food production and distribution, enhancing food security and creating jobs”.
“Trade finance keeps businesses going,” said IFC managing director Makhtar Diop. “Working with BFA, we’re helping Angolan firms access vital imports, trade more smoothly across borders, and create jobs, strengthening supply chains and the wider economy.”
